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Palau’s Financial Institutions Get Compliance Boost as FIC Takes on New Role

In a move aimed at modernizing its corporate landscape, Palau has designated its Financial Institution Commission (FIC) as the Registrar of Corporations. This development comes after Executive Order No. 477 was signed by President Surangel Whipps Jr.

New Responsibilities for FIC

According to the order, FIC has been empowered with the technical capacity and institutional knowledge to:

  • Administer the Corporate Registry
  • Promulgate regulations
  • Adopt policies that will bring about the purposes and procedures outlined in the Act

This move is seen as a significant step towards updating Palau’s corporations laws, which were signed into law in 2021.

Background: Public Law 10-11

Public Law 10-11, also known as the Corporations Registry law, aimed to regulate both domestic and international for-profit and not-for-profit corporations operating in the country. President Whipps said the new law will ensure good governance and lawful business practices, replacing an outdated law with a modernized version.

Commendation from the Asian Development Bank

The Asian Development Bank (ADB) had earlier commended the new law for simplifying business start-up and operation requirements by eliminating unnecessary formalities. This move is expected to make it faster and cost-effective for businesses to register and manage operations in Palau.

FIC’s New Role: Overseeing Compliance Procedures

As part of this initiative, the responsibility of the registrar has been handed over to FIC, which will now oversee the licensing, supervision, and regulation of financial institutions in the country. With its new role, FIC is poised to play a critical part in ensuring compliance procedures for financial institutions in Palau are implemented effectively.

This development is expected to bring about significant improvements in the way financial institutions operate in Palau, making it easier for businesses to comply with regulations and ensuring good governance practices.