Palau

Palau maintains a legal status for cryptocurrency with a Digital Residency Program and a crypto-linked national stablecoin initiative launched between 2022 and 2024. The regulatory environment supports crypto activities including mining.

Overview

Status	Legal
Risk Score	25/100 (Low Risk)
Region	asia pacific
Currency	USD

Tax Information

Capital Gains (Personal)	0% - no income tax
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 available.

Licensing & Registration

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

Enforcement Activity

Level: Moderate

No detailed enforcement information available

AML / KYC

KYC Required	Yes
Travel Rule	No
FATF Member	No
FATF Status	enhanced_follow_up
FATF Body	APG
Suspicious-Activity Reporting	No

DeFi, Stablecoins & NFTs

Status: unregulated

Stablecoins

Status: Legal

NFTs

Status: unregulated

Mining

Legal	Yes
Electricity Cost	$0.25/kWh
Renewable Energy	15%
Infrastructure	fair

Mining is legal with relatively high electricity costs and moderate renewable energy usage. Infrastructure is fair given island geography.

Geopolitical Risk

Stability	stable
Sanctions	No
Corruption Index	55/100
Banking Access	moderate

Risk Factors

geographic isolation
limited infrastructure
small market size

Palau is politically stable with no international sanctions. Moderate corruption and ease of doing business. Internet freedom is free, but banking access for crypto companies is moderate due to small market size and limited financial infrastructure.