Skip to main content

Palau Country Report

Country Risk Level


Executive Summary

Palau is a stable democratic republic in free association with the United States, and will remain reliant on the latter for its defence and financial aid for the foreseeable future. Four-time president Tommy E. Remengesau was elected for his current term in the November 2016 election with 51.3% of votes.As with many Pacific Island states, Palau faces ongoing risks of environmental disasters such as tropical storms. The public sector is Palau's largest employer. Tourism is also an important industry, although an increase in tourism is causing infrastructural decline and environmental problems, prompting the government to limit the flow of tourists into the country.

Operational Outlook

Reports of demands for bribes continue to affect public procurement. However, in January 2017 Palau hosted the UN anti-corruption consultation aimed at strengthening the UN convention against corruption, signalling a new seriousness about an issue that jeopardises foreign investment. Palau also continues to participate in the UN Pacific Regional Anti Corruption Project, which supports Pacific Island nations in creating more transparent governments, as the second phase of the project (2016–2020) is nearing completion. Palau's very small population of roughly 20,000 poses a negligible risk of violent protests and disruption of business activity.


Homicide rates in Palau are near zero and felonies are dominated by 'misconduct', mostly abuse of public office. Misdemeanours are mostly minor violations of traffic regulations and court injunctions.

Risk Level
Critical High Medium Low Minimal