By: L.N. Reklai

(Koror, Palau) A bill aimed at improving the existing foreign investment policy in Palau is now pending before President Remengesau Jr.  Copies of the draft bill had been circulated by the Office of President to various organizations and agencies for comments.

House bill 9-6-1 had earlier passed both houses and sent to President Remengesau Jr.  It was referred back to the House with recommendations for further improvements. Most of the recommendations concern the format of the bill, particularly arrangements of certain sections for better readability and clearer understanding.


There were very few policy recommendations.  One such recommendation was to give the Office of the Attorney General subpoena powers to investigate businesses. Another includes requiring a minimum investment of $500,000 and for hotels or short term lodging facility, a minimum of $5,000,000.

House agreed to almost all the recommendations made by the President except granting Attorney General’s Office the subpoena power to investigate allegations against businesses. Senate concurred with House version.

The current bill, if it becomes law, would define certain terms that are vague under current law such as a business ownership, a front and front business.

The draft bill incorporates five new sections not present in the current law. These five specifically address land and water transportation businesses and operators of water and land transportation.

The bill identifies water transportation and land transportation businesses as reserved exclusively for Palauans.  Furthermore, it calls for drug testing of operators and specifies penalties for violations.

The bill also allows for businesses to hire non-local operators if a local operator cannot be found but charges annual fees from companies that seek exemption status.  For example it will charge $2,000 for the first year and $3,000 for second year and escalate with years.  The fees will be paid to PCC Tourism and Hospitality School of Excellence and Ministry of Public Infrastructures, Industries and Commerce. [/restrict]