Holding crypto is not prohibited in Palau, but there is no licensing regime. Since March 2019 the Financial Institutions Commission has imposed a moratorium on new applicants seeking to provide virtual asset or cryptocurrency services, and existing financial institutions need written FIC approval for such activity. A Palau Digital Payment Service Bill providing for a Ministry of Finance tokenised US dollar has been submitted to Congress.
| Status | Legal |
| Risk Score | 25/100 (Low Risk) |
| Region | asia pacific |
| Currency | USD |
| Capital Gains (Personal) | No crypto-specific rules; individuals pay wages and salary tax at 6% to 12%; no separate tax on individuals' investment gains is set out, while gains in a business are taxed through Business Profits Tax (12%) or Gross Revenue Tax (4%) |
| Capital Gains (Corporate) | 12% Business Profit Tax (BPT) on net income for PGST-registered businesses (effective Jan 1, 2023); 4% Gross Revenue Tax (GRT) remains for non-PGST registered businesses with annual gross income over $50,000 |
| VAT on Crypto | No |
| Staking Tax | 0% |
| Airdrop Tax | 0% |
No crypto-specific tax guidance. Since 1 January 2023, PGST-registered businesses pay 12% Business Profits Tax on net income and other businesses pay 4% Gross Revenue Tax; a 10% Palau Goods and Services Tax applies to most supplies. Individuals pay tax on wages and salaries at 6% to 12%.
| Required | No |
| Regulator | Financial Institutions Commission (FIC) |
| Framework | No formal crypto licensing framework; FIC moratorium (since 2019) pending Digital Payment System Bill (proposed 2024-2025, not passed as of mid-2025); Digital Residency Program active (2022-present) |
| Ease | moderate |
No detailed enforcement information available
| KYC Required | Yes |
| Travel Rule | No |
| FATF Member | No |
| FATF Status | enhanced_follow_up |
| FATF Body | APG |
| Suspicious-Activity Reporting | No |
Status: unregulated
Status: Legal
Status: unregulated
| Legal | Yes |
| Electricity Cost | $0.25/kWh |
| Renewable Energy | 15% |
| Infrastructure | fair |
Electricity costs are high compared to global averages, with limited renewable energy penetration. Infrastructure is modest, reflecting island nation constraints.
| Stability | stable |
| Sanctions | No |
| Corruption Index | 55/100 |
| Banking Access | moderate |
| Sanctions Program Active | No |
Risk Factors
Palau is politically stable with no international sanctions. Moderate corruption and business environment. Geographic isolation and infrastructure limit rapid crypto sector growth.
Holding crypto is not prohibited in Palau, but there is no licensing regime. Since March 2019 the Financial Institutions Commission has imposed a moratorium on new applicants seeking to provide virtual asset or cryptocurrency services, and existing financial institutions need written FIC approval for such activity. A Palau Digital Payment Service Bill providing for a Ministry of Finance tokenised US dollar has been submitted to Congress.
Palau is classified by FATF as: enhanced_follow_up.
KYC is mandatory for crypto businesses.
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Explore IT Services →Last reviewed: 2026-09-21 · Data source: Soken Crypto Legal Map
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