Micronesia (Federated States of)

Research notes

Micronesia (Federated States of) — family-office tax dossier

Last reviewed: 2026-10-15 Tax year: 2026 Reviewer: research agent (Claude), unreviewed by a tax adviser

Summary

The Federated States of Micronesia taxes wages and salaries (6% on the first USD 11,000, 10% above) and the gross revenue of businesses (3% above USD 10,000). There is no tax on an individual's investment income or capital gains outside a business, and no inheritance, gift or wealth tax was found. Based on the 2014 FSM Code; later amendments and state-level taxes were not checked.

US citizens: US citizens remain subject to US federal income, estate and gift tax on worldwide income and assets wherever they live; the app adds the federal layer. Where local tax on portfolio income is nil there is nothing to credit against US tax.

Residence and eligibility

No tax on investment income, so no relevant residence test.

• Entry/residence permit (EU, US, OTHER): Not researched.

Capital gains

Standard regime

No capital gains tax: national taxes are the wage and salary tax (54 FSMC 121) and the gross revenue tax on businesses (54 FSMC 141).

• Tax year / confidence / verification: 2026 / medium / partially_verified (checked 2026-10-15)
• JSON numbers: headline 0% (0.0); listed domestic 0% (0.0); listed foreign 0% (0.0); private business sale 0% (0.0); local real estate 0% (0.0); foreign real estate 0% (0.0).
• How derived: 54 FSMC 112(5): 'gross revenue' is receipts of a trade or business (including returns on the capital of the business); a non-business investor's gains are outside both taxes.
• Trader recharacterisation: A business dealing in securities or property would pay 3% gross revenue tax on its receipts (above USD 10,000).

Dividends

Standard regime

No tax on dividends received by an individual outside a business.

• Tax year / confidence / verification: 2026 / medium / partially_verified (checked 2026-10-15)
• JSON numbers: headline 0% (0.0); domestic 0% (0.0); foreign gross 0% (0.0); foreign tax relief: not_applicable.
• How derived: 54 FSMC 121 (wages) and 141 (business gross revenue) are the national income taxes; dividends of a private investor are in neither base.
• Treaty network: No comprehensive treaties found (not verified). US dividends bear 30% US WHT.

Inheritance and gifts to children

Standard regime

No inheritance, estate or gift tax in Title 54 (Taxation and Customs).

• Tax year / confidence / verification: 2026 / low / partially_verified (checked 2026-10-15)
• JSON numbers: basis none; children fully_exempt; exemption 0; brackets []; other transfer costs 0.0.
• Gift tax: No gift tax found.

Wealth tax

Standard regime

No net wealth tax and no recurring levy on financial assets.

• Tax year / confidence / verification: 2026 / medium / partially_verified (checked 2026-10-15)
• JSON: type none.
• Property tax (not a wealth tax): Not researched (state-level).

Special regimes

None found for wealthy new residents.

Company taxation (kept separate from personal tax)

Headline rate in JSON: null (unknown). No corporate income tax at national level in Title 54: businesses pay gross revenue tax of USD 80 on the first USD 10,000 and 3% above (54 FSMC 141, as summarised in the Code text read).

Cost of living notes

Not sourced.

Open questions

• Tax reform proposals (e.g. a unified revenue authority and net profits tax) have been discussed for years; nothing in force found.
• [standard/capital_gains] Amendments after the 2014 Code and any state taxes were not checked.
• [standard/inheritance] State codes (Pohnpei, Chuuk, Yap, Kosrae) not checked. Non-citizens cannot own land (constitution; not verified).

Sources

• FSM Code (2014 Annotated) Title 54 Taxation and Customs: http://www.fsmlaw.org/fsm/code/PDF/FSMCA2014Tit54.pdf

Change log

• 2026-10-15: initial research.