New, PSDI-Supported Corporations Act to Modernize and Streamline Business Start-up and Operations in Palau
A new, PSDI-supported Corporations Act will make it easier and faster to do business in Palau.
Approved by the President of Palau on 30 September, the new act:
- streamlines business registration processes by eliminating unnecessary formalities.
- ensures that Palau complies with global anti-money laundering / countering the financing of terrorism (AML/CFT) obligations.
- strengthens and clarifies director duties.
- makes the provisions for foreign companies seeking to do business in Palau more robust.
- provides a new framework to assist in classifying nonprofits into (i) charitable organizations formed for the public good, (ii) religious organizations, and (iii) other entities that are formed for the benefit of their members, such as chambers of commerce. This supports international AML/CFT requirements.
“The passing of this act gives Palau a modern framework to support business activity,” said Palau’s Minister of Finance, Kaleb Udui Jr. “These reforms reflect the Government of Palau’s commitment to improve its business legal environment, support private sector growth, and enhance Palau’s economic prosperity––a pillar of our Pathway to 2030.”
More than 5 years in the making, the act was developed with support from the Pacific Private Sector Development Initiative (PSDI)—an ADB technical assistance program undertaken in partnership with the governments of Australia and New Zealand.
“Making it easier for businesses to start and operate is one of the most sustainable ways to support increased private sector activity and stimulate economic growth,” said ADB Pacific Liaison and Coordination Office Regional Director Lotte Schou-Zibell. “That’s why ADB is supporting Pacific governments to reform their business legal environments to be modern, inclusive, and well-suited to the region’s small island economies.”
"The new Corporations Act will greatly improve the ease of doing business in Palau," said Australia’s Ambassador to Palau Richelle Turner. "I congratulate the Government of Palau for enacting these reforms which will ensure the country has a contemporary, global business climate. Australia is proud to support PSDI’s work in Palau and across the Pacific."