The Olbiil Era Kelulau (OEK) on Tuesday approved President Tommy Remengesau’s version of the high- end accommodations bill which will limit new foreign-owned investments in Palau to five- star accommodations.
The bill cleared both Houses of the OEK only a day after Remengesau referred back the piece of legislation with recommendations that it stays close to the original bill, which he proposed last year.
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Remengesau said in his referral letter and the PD1 version, the Foreign Investment Board (FIB), under the bill, will be empowered to prioritize and incentivize high-end hotel resort developments in the country.
Among the board’s responsibility is to adopt and publicly endorse reputable classification and rating systems for different forms of accommodations.
The OEK version proposed that Palau Visitors Authority (PVA) be part into the hotel vetting process of the FIB.
Remenegsau also said that the OEK’s recommendation that PVA create an accommodation master plan can be discussed in a separate bill.
The president also recommended that the bill focuses on foreign investors and not include Palauan owned businesses into the new law.
He said Palauan –owned accommodation businesses should not be “dragged into” foreign investment processes.
The president however agreed with the OEK that foreign investors investing in high -end accommodations be given tax credit of up to 40 percent.
“I believe the final language on this issue- the language we worked out together- sends a clear message to high-end investors and developers that Palau welcomes their investment and is open for business,” Remengesau said in his March 12, referral letter.
The proposed law is part of Palau president Tommy Remengesau’s new “quality over quantity” approach to tourism.
Remengesau in earlier interviews reiterated that Palau is less concerned with raising the numbers and more focused on inviting “quality” visitors.
While Palau is estimated to continue its tourism growth, they remain vulnerable to environmental impacts.
Remenegsau said Palau would be more selective in accepting new accommodation projects.
Remengesau proposed bill also stated that the proposed investment on hotels should be $5 million. The OEK version requires a minimum investment of $500,000 to $5 million.
The president said Palauan entrepreneurs planning to open accommodations businesses will not be subject to the same requirements imposed on foreign investors. (Bernadette H. Carreon) [/restrict]