Palau Correspondent


KOROR, Palau — A new law that will allow a new form of relationship for potential investors in Palau was signed into law by President Surangel S. Whipps Jr. on Dec. 22.

The digital residency law allows a non-citizen, without having to be a physical resident of Palau to acquire a digital residency ID without having to be a resident.

A digital resident of Palau can open digital accounts, apply for a certificate of legal name change, establish a physical mailing address and establish a digital phone number.

The digital residency ID however is not equivalent to allowing digital residents to establish a business, reside or work physically in Palau.

“Digital residence shall have no relevance in the evaluation of an individual’s application as a foreign worker, or application for a bank account with a financial institution in the Republic of Palau, or application for foreign investment,” the law says.

The North European country of Estonia has had an e-citizen program for five years.
Photo courtesy of Unsplash

Whipps said the legislation “offers a potential diversification of our economy, which is urgently needed in light of the pandemic’s effects on tourism industry.”

The new law is modeled on the e-residency system of Estonia, where since 2014 an e-citizen of the small North European country can sign documents, form companies, access online banking, and conduct online trading, among other pursuits. In 2019, e-residents paid 10.8 million euros in direct taxes, and the cumulative profit for Estonia in five years has doubled year by year, now exceeding 31 million euros, according to

According to the law, the government will act as a service provider to administer the Digital Residency Program.

Whipps told reporters in a Dec. 22 press conference that the initiative could bring in  millions in revenue for the country.

“Being a first-mover provides us the advantage that people will know that it’s available, and we can tap into those markets that are out there that may need this service.”

A fee of $50 will be collected for an ID application, and once approved, the applicant will pay $100 for the ID. The legislation requires that its regulations will be promulgated within 180 days from it becoming law. mbj