Tax Map · Relocation rankings

Tax residency in Palau

How to become a tax resident — and how hard it is to leave.

How to become a tax resident

• resident: individual is present in Palau for at least 183 days in the tax year
• resident: individual has a permanent home or usual place of abode in Palau (implied by resident vs non-resident distinction)
• non-resident withholding: individual is non‑resident but derives Palau‑source interest, royalties, or insurance premiums

Palau does not offer investment, citizenship-by-investment, or digital-nomad residence routes, and foreigners are generally limited to short-stay visas or visa waivers without a clear long-term residence pathway.

Palau does not tax an individual’s foreign‑source personal income even if they meet the 183‑day residence test, and residents are distinguished from non‑residents primarily by presence and source of income, so ceasing residence is generally achieved by leaving and not having Palau‑source employment or business income.

“A new tax, called “non-resident tax” is imposed on a non-resident person who derives interest, a royalty, or insurance premium in Palau. The tax non-residents does not apply to the following: an amount that is exempt income within the meaning of section 1433; or an amount derived by a non-resident that is attributable to a business carried on in Palau through a permanent establishment in the Republic. In this case, the amount is subject to business profits tax. Tax is imposed on the gross amount of income derived by the non-resident person (as listed above) with no deduction allowed for expenditures or losses incurred in deriving the income. The tax is collected through withholding by the person paying the interest, royalty, or insurance premium at the time of making the payment.” — Palau Bureau of Revenue & Taxation, Ministry of Finance (palaugov.pw)

Estimate — confirm against the linked sources. See methodology.