Palau
Taxes, residence and daily life for people moving to Palau: for a wealthy family, an expat employee and a remote worker. Researched .
Open Palau in the interactive guide
At a glance
For an EU-citizen family of five living off a €30M portfolio, the guide's default reader. The interactive guide recomputes everything for other passports and situations.
- Score for a wealthy family
- 68 / 100
- Tax on a €30M portfolio
- €48,600 a year
- Wealth tax
- none
- Children inherit
- tax-free
- EU member
- no
- Currency
- USD
- Capital
- Ngerulmud
Tax on investments, inheritance and wealth
Palau has no general personal income tax: after the January 2023 tax reform (10% Palau Goods and Services Tax, Business Profits Tax, reformed Wages Tax) the Ministry of Finance states that the regime 'does not include a general personal income tax'. Investment income and capital gains of individuals are therefore untaxed as far as found. No inheritance, gift or wealth tax was found.
- Ordinary residence: No general personal income tax; wages tax on employment income; business taxes on businesses.
Inheritance law and trusts
Palau's succession law was not sourced in this research. The Hague Trusts Convention is not in force. No forced heirship rule was confirmed.
Daily life, scored out of 100
From public indicators (World Bank, UNDP, Transparency International and others); higher is better.
| Measure | Score |
|---|---|
| Safety and personal security | 42 |
| Political and institutional stability | 64 |
| Legal system and property rights | 72 |
| Healthcare quality and access | 48 |
| Education quality | 54 |
| Human development and quality of life | 57 |
| Infrastructure and connectivity | 84 |
| Business opportunities and economy | 59 |
Research notes
Palau — family-office tax dossier
Last reviewed: 2026-10-15 Tax year: 2026 Reviewer: research agent (Claude), unreviewed by a tax adviser
Summary
Palau has no general personal income tax: after the January 2023 tax reform (10% Palau Goods and Services Tax, Business Profits Tax, reformed Wages Tax) the Ministry of Finance states that the regime 'does not include a general personal income tax'. Investment income and capital gains of individuals are therefore untaxed as far as found. No inheritance, gift or wealth tax was found.
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 personal income tax on investment income, so no relevant tax residence test. Palau's 'digital residency' card is an ID product, not tax or immigration residence.
- Residence/entry permit (EU, US, OTHER): Not researched.
Capital gains
Standard regime
No tax on individuals' capital gains (no general personal income tax).
- Important exceptions, statute references and announced changes: A second phase of tax reform could introduce a personal income tax (announced as possible, nothing enacted found).
- 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: Ministry of Finance FY2024 Economic and Fiscal Update: 'the current reformed regime does not include a general personal income tax, which would form a second phase of the reforms'.
- Trader recharacterisation: A trading business would fall under Business Profits Tax / gross receipts tax (rates not verified).
Dividends
Standard regime
No tax on individuals' dividends (no general personal income tax).
- 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: No general personal income tax (FY2024 Economic and Fiscal Update). Foreign withholding (e.g. US 30%) is a final cost.
- Treaty network: No comprehensive treaties found (not verified). Palau uses the US dollar under its Compact of Free Association.
Inheritance and gifts to children
Standard regime
No inheritance, estate or gift tax found among Palau's taxes (PGST, excises, business profits tax, gross receipts tax, wages tax, room tax).
- Tax year / confidence / verification: 2026 / low / unverified (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.
Special regimes
None found for wealthy new residents.
Company taxation (kept separate from personal tax)
Headline rate in JSON: null (unknown). Business Profits Tax for larger businesses introduced in January 2023, medium businesses stay on the Business Gross Receipts Tax and small ones pay an annual fee (FY2024 Update); rates not verified.
Cost of living notes
Not sourced.
Open questions
- Palau legislation not read; confidence rests on the Ministry of Finance's description.
- [standard/capital_gains] Primary legislation (RPPL 11-11 and the Palau National Code Title 40) not read.
- [standard/inheritance] Foreigners cannot own land in Palau (general knowledge, not verified).
Sources
- Economic and Fiscal Update FY2024 (tax reform section): https://www.palaugov.pw/wp-content/uploads/Economic-Fiscal-Update-FY2024.pdf
- Ministry of Finance (Bureau of Revenue and Taxation): https://www.palaugov.pw/executive-branch/ministries/finance/
Change log
- 2026-10-15: initial research.
Residence and succession sources
Tax sources are cited in the research notes above.