Palau Offshore

- TAXATION
- BANKING LAWS
- BANKING LICENSE
- PAID UP CAPITAL
- MANAGEMENT
- OFFICE SERVICES
- LOCAL BANKING CONDITIONS
- INCORPORATION CONDITIONS, SERVICES AND SPECIAL SERVICES
- SPECIAL COMMENTS

TAXATION

There is no income tax on foreign earned income in Palau. It is not even required to report foreign profits.

BANKING LAWS

Legal status for banks incorporated in Palau is the same for both offshore and domestic institutions. It means that all banks have the same rights and obligations. There is no difference between offshore and domestic banks indeed, as profits gained from abroad are not subject to local taxation.

BANKING LICENSE

All incorporated in Palau companies have to obtain a license that has to be renewed annually. Actual type of allowed activity for each company has to be shown on the license (in our case it is – banking). The Bank’s Charter Agreement and applicable laws of Palau regulate banking activity of a particular bank. Banks incorporated in Palau may offer banking services and legal financial transactions provided for in its Charter Agreement. Local laws do not impose any special restrictions on this activity. As a former US colony, Palau has inherited American banking law. It is an attractive jurisdiction for obtaining a banking license.

PAID UP CAPITAL

Paid up capital for a Bank incorporated in Palau is USD100,000. 10% of this amount is payable to the bank's account in Palau in advance, before the actual license has been obtained. This account can be used for future banking activity.

MANAGEMENT

Each bank incorporated in Palau should have at least three shareholders and three directors that all are residents of Palau. It takes approximately 6 to 8 months to obtain a permission of the Foreign Investment Board. Nominee directors and shareholders speed up the incorporation. It is possible to operate a bank by means of nominee service. This structure of management is identical to other common schemes of offshore company management through nominee service.

OFFICE SERVICES

It is possible for a local bank to have a complete set of office services. The bank will have mailing address, phone and fax lines. A bank can rent a separate room with a secretary.

LOCAL BANKING CONDITIONS

A new banking institution will be asked to open an account with an existing bank in Palau. The account has to be opened in advance, before the banking license may be obtained. Later on, the account will remain active and can be used for correspondent banking transactions.

INCORPORATION CONDITIONS, SERVICES AND SPECIAL SERVICES

Services	Total costs
1st year fee (including nominee directors and shareholders, license fee, incorporation fee, government fee, transferring 10% of paid up capital (USD10,000), annual fee for common secretarial services).	USD55,200
2nd year fee and subsequent years fees (including secretarial services, license renewal, and all nominee services).	USD33,000
Annual license renewal.	USD400
Additional notarized copy of a license.	USD 295 + delivery (from USD120 to USD175)
Special offer for secretarial services – a secretary with separate phone and fax lines and separate room.	USD 16,000
Apostilization of corporate documents for correspondent accounts worldwide.	USD 400
Fast apostilization processing of corporate documents.	USD 600
Permission from PFIB for a foreigner	USD 6,000

SPECIAL COMMENTS

- Every Palau Bank has to submit apostilised set of corporate documents
to open a correspondent account.
- Nominees can issue General Power of Attorney only for one person,
empowering that person to have full control over the management. It
means that only one person may have full control over a bank.
- It is not required by law to submit annual report, unless an Annual
Audited Report is going to be published.
- There are no restrictions on public advertising in Palau.

An authorized person is required to submit the following list of documents in order to obtain a license:

- A notarized copy of a passport for an authorized person;
- Resume/Curriculum Vitae;
- Certificate of non-involvement in criminal activity;
- Two bank references.

The following list of corporate documents will be issued:

- License
- Articles & Bylaws
- Indemnification Agreement & Nominee Director Declaration
- Management Agreement
- Power of Attorney
- Minutes of a meeting of the Board of Directors
- Corporate Charter

It takes usually 3 months to incorporate an offshore bank in Palau.