Palau Compliance Report

Regulatory Overview

Regulatory Status

Dedicated crypto/VA legislation, licensing regime, active enforcement

Key Regulator(s)

Palau Ministry of Finance and Ripple, Palau Financial Supervisory Commission, Palau Financial Institutions Commission

Primary Legislation

Public Law 99-658, Nov. 14, 1986, No separate Palauan financial services law, banking act, or monetary authority s, No domestic AML law applies to VASPs. No Anti-Money Laundering (AML) or Know You, Palau has not transposed the FATF Recommendations into domestic law with respect, Palauan citizens in the United States are subject to U.S. law, and grounds of re, Title 40 – Revenue and Taxation Act

Travel Rule

Not adopted — Threshold: 25

Tax Reporting

No virtual asset legislation exists. Palau has not enacted any law defining, regulating, or licensing virtual assets, virtual asset service providers (VASPs), or digital currencies. Palau - United States Department of State. Primary legislation governing foreign investment: Foreign Investment Act, Palau National Code Title 28, Chapter 1 (as amended). The Foreign Investment Board (FIB) approves and regulates all foreign direct investment. Palau - United States Department of State. Tax legislation: Palau Goods and Services Tax Act (Public Law 11-15, effective 1 January 2023), replacing the Gross Revenue Tax; Business Profits Tax Act (Public Law 11-16), imposing a 12% tax on net income. Palau - United States Department of State. Currency & banking: The U.S. dollar is legal tender; three U.S.-headquartered banks operate in Palau (Bank of Guam, Bank of Hawaii, Bank of the Federated States of Micronesia). No licensed on-ramp/off-ramp for virtual assets exists. Palau - United States Department of State. International tax transparency: The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes conducted a Second Round, Phase 1 review of Palau; the report was published in 2026 (covering the 2022–2023 review period). PALAU 2026 (Second Round, Phase 1)

Key Facts

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