After digital residency bill fails, Palau president urges reconsideration

ISTANBUL

Palau's president has urged the senators of the island nation to reconsider their decision to disallow digital residency in the country, according to local media.

The proposed Digital Residency Identification bill moved by the government of President Surangel Whipps Jr. failed in the Senate and is up for debate once again on Tuesday, the daily Island Times reported.

“I write to urge your consideration and passage of the digital residency bill. The digital residency offers Palau an innovative diversification of our economy and will be regulated to ensure that Digital residency is offered in a secure and reputable manner,” Whipps wrote to Senate President Hokkons Baules on Monday.

Whipps promised to consider amendments to the bill.

Palau last month moved to introduce digital residency for foreigners as “a way for businesses to use the country's physical location to transact business digitally.

Whipps had moved the bill to the parliament on Nov. 2 that appeals “to individuals and businesses that use cryptocurrency to transact.”

He had said the law would help “diversify” Palau’s economy.

The move replicates the e-residency system first introduced in 2014 by EU member Estonia, which offers access to “Estonia’s transparent business environment: a new digital nation for the world.”

It allows non-resident entrepreneurs from all over the world to start an EU-based company in Estonia and manage their business from anywhere, entirely online.

The 13-member Senate of Palau will hold another vote on the bill on Tuesday.

Earlier, the bill was defeated after six senators voted against it while five others voted in favor of the bill. One senator abstained who was counted as a “yes” vote under Senate rules.

Whipps also assured the parliament that the proposed legislation “would comply with best practices of the nation’s Anti-Money Laundering and Counter-Financing of Terrorism Law.”

If the bill is passed, Palau will offer a government-issued digital residency to non-resident citizens, but no physical residency to foreigners.