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Palau Financial Institution Compliance Requirements Get Boost from FIC Designation as Registrar of Corporations

In a significant move aimed at modernizing and updating Palau’s corporations’ laws, President Surangel Whipps Jr. has signed an Executive Order designating the Financial Institution Commission (FIC) as the Registrar of Corporations.

Background

According to Executive Order No. 477, FIC is now equipped with the technical capacity and institutional knowledge to:

  • Administer the Corporate Registry
  • Promulgate regulations
  • Adopt policies that ensure good governance and lawful business practices

This move comes on the heels of Palau Public Law 10-11, signed in 2021, which aimed to regulate corporations in Palau, both domestic and international, as well as for-profit and not-for-profit entities. The law was hailed as a major upgrade to the country’s corporations’ law, replacing outdated formalities with modernized versions that simplify business start-up and operation requirements.

FIC’s New Responsibilities

The FIC, responsible for licensing, supervising, and regulating financial institutions in Palau, will now take on the responsibility of registering corporations. This move is expected to:

  • Streamline business operations
  • Reduce costs

According to an earlier press statement from the Asian Development Bank (ADB), the new law is designed to make it faster and cost-effective to register and manage businesses in the future.

Impact and Significance

The Executive Order, signed on January 12, 2023, marks a significant shift towards strengthening financial institution compliance requirements in Palau. With this designation, FIC is now poised to play a crucial role in ensuring good governance and lawful business practices in the country.

By designating FIC as the Registrar of Corporations, Palau takes another step towards establishing itself as a modern and business-friendly jurisdiction.

Key Takeaways

  • FIC designated as Registrar of Corporations
  • Expected to streamline business operations and reduce costs
  • Enhances good governance and lawful business practices in Palau
  • Marks a significant shift towards strengthening financial institution compliance requirements in the country