Alii and welcome: Guam Trade Mission visits Palau

BY MAUREEN N. MARATITA AND OYAOL NGIRAIRIKL
Journal Staff

KOROR and MELEKEOK, Palau — A select group of businesses participated in the Guam Business Magazine Trade Mission to Palau the week of Sept. 28, which was also supported by the Journal.

Businesses included Ari Architecture, Black Construction Corp., Coca-Cola Beverage Co. and Foremost Foods Inc., Subway Restaurants Guam and Saipan, and Transpacific Insurance Brokers Corp.

The visit was coordinated with the Office of the President and the Ministry for Human Resources, Culture, Tourism and Development, as well as multiple government agencies and the Palau Chamber of Commerce.

The Mission was sponsored by the Palasia Hotel Palau and Sam’s Tours Palau. Support was also provided by Surangel & Sons, and Elilai Seaside Restaurant.

Trade Mission members called on President Surangel S. Whipps Jr. Also at the courtesy call meeting were Ngiraibelas Tmetuchl, minister for Human Resources, Culture, Tourism and Development, and Charles Obichang, minister of Public Infrastructure and Industries.

Part of the week-long agenda featured meetings with a number of important Palau agencies — both to understand what entering the Palau market requires, and to make connections for further meetings as investment and a presence in Palau is further discussed.

Palau is advancing a pipeline of hotel developments as the republic seeks to expand its room inventory, attract investment and diversify its tourism market.

Raymond August, executive director of the Foreign Investment Board, said the board is working with the Bureau of Development within the Ministry of Human Resources, Culture, Tourism and Development to make Palau’s investment environment more welcoming.

“If you’re an investor who is interested in investing in the republic, we can help guide you,” August said. He said the board can connect prospective investors with state governments and use state master plans to identify development priorities and potential partnerships.

Among projects under development is the Marriott Hotel Palau, a proposed luxury development in Koror’s Echol waterfront area. Led by Wanjin Palau Development Co., the first phase is expected to include about 160 rooms, a marina, beach access and a spa.

Other planned projects include the 154-room Sheraton Palau Resort, managed by Palau Majesty Development, and the proposed Four Seasons Resort Palau on Ngerekebesang Island. The Four Seasons project is envisioned as a sustainable luxury resort with about 60 rooms, including overwater bungalows, and would complement the operating Four Seasons Explorer catamaran resort.

IHG Hotels & Resorts has signed a management agreement with Palau Coral Club for Hotel Indigo Palau, a planned 60-room hotel.

Whipps said during the meeting with the Trade Mission, “You need those brands; they really pull in people.”

In Aimeliik, Palau Golf Inc. is negotiating with the state on a long-planned condominium development. Global Property received approval in April for a project that includes 38 villas, a restaurant and wedding chapel, and is considering a second development in Koror State: a proposed 38-room hotel, August said.

With additional hotel rooms, the republic can aim for higher tourist numbers. Tmetuchl said, “Our goal is to reach 200,000 visitors by 2035.”

Local hotels have not only renovated, but have added more offerings. The Palasia began a program that saw a brand-new pool among upgrades. The pool is also popular for parties on weekends, bringing in local revenue. The Palau Royal Resort offers a mini-golf green, and the Palau Pacific Resort has incorporated a Nature Center into the property as well as a fishpond.

The Aimeliik developments could benefit from the recently opened Ngerchebal Rock Island eco-tourism site off the state’s coast. The site is part of Palau’s broader effort to build visitor attractions beyond Koror and distribute tourism-related economic activity more widely.

Accommodation demand has increased alongside arrivals. From January through August, Palau received 58,605 visitors, according to the Palau Visitors Authority. Government officials expect total arrivals for 2026 to roughly match or modestly exceed the 89,379 visitors recorded in fiscal year 2019, the last full year before the COVID-19 pandemic disrupted travel. China remained Palau’s largest source market, with 20,792 arrivals year to date, while Japan posted the strongest percentage growth among major markets, increasing 83% from the same period in 2025.

Meanwhile, according to Journal files, Qantas will double its direct service between Brisbane and Koror to two return flights a week during the peak season, after signing a new agreement to continue operating the Palau Paradise Express. From December, the Palau Paradise Express will operate twice weekly for the first time, giving travelers the option of a four-day trip to Palau, according to a Sept. 2 release from the airline.

The service, which Qantas launched with one weekly flight in December 2024, has opened a new leisure market for Australians. Carrying more than 15,400 passengers since its commencement, the flights have quadrupled passenger traffic to Palau from Australia and Oceania from pre-COVID levels, the release said.

The second weekly service will operate from December to the end of March 2027, departing Brisbane on Wednesday and Saturday and returning from Koror on Thursday and Sunday. The service will be operated by a Boeing 737-800, with a flight time to Koror of around six hours, and connections available across the Qantas domestic network.

The Journal saw and spoke with Australian visitors who were guests at the Palasia Hotel Palau and were enjoying the offerings of watersports as well as restaurants and other hospitality offerings in Koror. The short flight time was a big attraction, they said.

Tmetuchl said that the government has additional plans for the ANZAC region. “Now we’re looking at New Zealand,” he said. Whipps and Tmetuchl were in Australia the week of Oct. 12 to open the Palau Embassy in Canberra — a first. In addition, the delegation they are leading will promote the existing Qantas flights and the potential for additional flights from Sydney.

Whipps told Trade Mission members, “I think another potential for the future is cruise ships, if the port gets improved. The CNMI, Guam, Yap, Palau —it’s the perfect run.”

Palau is popular with Chinese and Taiwanese visitors, and also as a destination for conferences. After the Pacific Island Forum, which drew about 2,000 attendees, during the Trade Mission’s Visit, a two-day Livelong Women’s Health Summit drew attendees from the Pacific Region and beyond on Sept. 25 and Sept. 26.

Palau is not only open to investors but is aiming to introduce an activity worldwide — golf.

In December, Whipps announced that the nation will be getting its first golf course with help from Taiwanese investors.

Just below the National Capitol at Ngerulmud, the newly opened Capital Golf Park offers a one-hole Green Theme Park where residents and visitors can bring their own equipment and try the sport. Whipps, Taiwan Minister of Foreign Affairs Lin Chia-lung, Taiwan Ambassador Andy Chen, local leaders and community members opened the park in August.

Developed with Taiwan’s Jiabang Smart Investment Corp., the park is intended to support recreation, golf development and sustainable land-based tourism, without the typical use of chemicals to maintain appearance. Melekeok State leaders continue to work through land matters associated with the larger golf-course project.

Through the years, Palauan businessmen have spoken about the attractions of golf for visitors — according to Guam Business Magazine — sister publication to the Journal.

Ngiraibelas Tmetuchl, minister for Human Resources, Culture, Tourism and Development, also told the magazine last year that introducing golf in the republic was one of his aims. “My aspirations this year are to build a nine-hole golf course. I’m looking for investors — I’ll take foreign and local.” He said, “I’ve had some discussions and if we can play golf at night — even better.”

While some projects move ahead, others will wait. The founder of Don Quijote, Takao Yasuda wanted to build an eco-resort in Palau, but the construction has had some setbacks.

The proposed Four Seasons resort at Ngerchelngael Island in the Rock Islands is not moving ahead while clarification takes place on what development is permitted in Palau’s World Heritage Site.

Meanwhile, the Four Seasons opened its new M-Dock waterfront restaurant, bar and lounge in Koror on Sept. 30.

Additionally, as part of its regional expansion, ASC Trust opened ASC Trust Palau Inc. on July 23. In a release to the Journal, it said, “With the launch of ASC Palau Inc., the company continues its strategy of bringing retirement plan expertise, compliance support, and client-focused service closer to employers, employees, and communities throughout Micronesia.

“Establishing a permanent presence in Palau allows ASC to provide local employers and organizations with greater access to responsive service and specialized retirement plan expertise,” the company said.

“The opening of ASC Palau, Inc. reflects our continued investment in the region and our commitment to helping employers provide meaningful retirement benefits for their employees,” said Candy C. Chamberlain, president and CEO of ASC.

Federally funded construction in Palau is continuing apace.

The Trade Mission visited Palau’s port in Malakal and saw the areas that will be improved and extended out into the waters in Malakal. Residents of a housing development will be relocated to make way for the extension of the port, with their concurrence as the area is prone to flooding. The port will be rewalled and rebuilt for efficiency and opportunities, and will be at least large enough to accommodate military vessels and certain cruise ships.

Together with that an area of Malakal has been identified as improvement for a destination for residents and visitors alike. Malakal already hosts the Palau Pacific Resort, the Cove Resort Palau and popular restaurants and bars such as Elilai Seaside Dining and the Drop Off Bar and Grill. The Malakal bridge is also being currently reconstructed – which is one of the largest infrastructure projects since the Capitol and the Compact Road were built, the paper was told. That project will also include expansion of the pedestrian walkway in what is a scenic area.

The port award announcement is due Nov. 2, with a rough estimate of construction being at least four years.

In addition, Palau is working closely with the Japan International Cooperation Agency and other partners to also modernize the Ngatpang fishing port, widely used by the fishing industry and local fishermen.

Other infrastructure projects include the new national hospital relocation project. In a process that began in February, when President Surangel S. Whipps signed a $2.37 million contract with Honolulu-based Architects Hawaii Ltd. to carry out a U.S. Trade and Development Agency-funded feasibility study on relocating and redesigning Belau National Hospital. The agreement was signed in Honolulu at the Pacific Agenda: Investment, Security, and Shared Prosperity Summit, with U.S. Deputy Secretary of State Christopher Landau presiding over the announcement. Architects and engineers have since assessed potential sites.

In addition, the Peliliu runway project is ongoing. “The advantage of Peliliu is that they’ve got a lot of room to park,” Whipps said. While the military is an ongoing presence on Peliliu, families have begun leasing homes to visitors.

The government is moving forward with various plans that interest potential investors. Palau introduced a goods and service tax, and while the tax is part of Palau’s tax reform, its revenue will also go towards repayment of the $25 million Asian Development Bank loans the country received in 2021 to assist with a variety of aims that included public sector policy and finance development and private sector development, according to Journal files. Whipps said the new system — which did away with gross receipts tax, is more equitable and easier to enforce.

While not necessarily popular with all residents, Whipps told the trade mission he plans no new tax initiatives.

However, he said that all must pay their fair share of taxes.

Elway Ikeda, director of the Bureau of Revenue & Taxation, told the group that, based on salary,” There are exemptions on income tax.” As for commerce, he said, “If you do business, you pay business taxes.” Corporate income tax is 12%, Ikeda said. That is 12% on gross income, minus allowable deductions.

Other initiatives include the Palau Supplier Registry, an online platform where Palau's businesses can showcase their goods, works, and services, as well as “gain visibility and access to government procurement opportunities.” It also provides a platform for Palau’s private sector to connect with other companies in the region and internationally.

The environmental impact of any construction or intended business is assessed by the Environmental Quality Protection Board. The EQPB has a seven-member board, according to Kliu Pasilius, acting CEO. It has planners and a CPA on-staff, for a total of 13 employees. “In a perfect world we’d be 28,” she said. EQPB staff oversee plans such as earthmoving, and air quality that might be affected. “The backlog would be the technical review of applications, with only one engineer onboard,” Pasilius said. While the agency’s goal is to get projects completed in compliance with Palau law, EQPB can halt any project, including military work if necessary, as with the Tactical Mobile Over the Horizon Radar in Babeldaob. “There is an EQPB bond to make sure that there is no abandonment,” she said.

All government regulations are listed on www.palaugov.pw​​​​​​​.

The private sector in the Micronesia region is the subject of an Asian Development Bank Pacific Private Sector Development Initiative, which includes reform of laws and introduction of regulations that govern business. For instance, Palau currently has no building regulations.

Companies which operate in the islands already may have an advantage as they enter the market.

Udui said, “We have to think as a region; a successful business will be a regional business.”

The fifth phase of the initiative is backed by $12.85 million in funding from the ADB and Australia, according to an Oct. 12 release from the ADB.

The hub for the initiative is in Koror. Kaleb Udui Jr., governor of the ADB in Palau and director of the Bureau of Finance, spoke of Palau’s commercial wish list at the Trade Mission meeting with ADB.

“We need more contractors in Palau; we need more hotels; we need more houses,” he said. Palau does not have enough small contractors either, he said. Udui said if condo-style developments are built, they might suit Palauans who have left the country and other investors who could lease out units to help the lack of housing.

Jonathon Kirby, senior private sector development officer, who attended remotely from ADB’s Sydney office, said, “We have a long history of working in Palau. We work with the private sector and prioritize commercial sound investments that generate strong development outcomes.”

Palau is also part of the Small Business Development Center network.

During the week, the Mission team traveled to the Capitol, and visited the House of Delegates, traveling along the full length of the Compact Road. The cleanliness and landscaping along the road was much commented on. Also, the group visited the famous Rock Islands, and a number of restaurants in Koror and elsewhere. These included Canoe House, Elilai Seaside Dining — which now supplies meals to United Airlines, the Penthouse Hotel’s restaurant, Okemi Deli Café, the Taj and Tori, Tori Japanese Restaurant. We note there are more to discover.

Despite a full schedule, members of the Mission were allocated free time for additional meetings and together and separately visited various retail outlets, to include the night markets in Koror, and a group tour of the Surangel Supercenter in Airai. Surangel’s has also expanded with smaller stores into Babeldaob, to further serve the population.

Richard Mangham, project manager with Black Construction, and a Mission delegate, said, “The president and both ministers stressed Palau’s anticipation of future investments and Palau’s willingness to have an investment-friendly government environment.”

He also said, ““The current leadership in Palau is noticeably younger and very well educated. This was from directors, ministers up though the OEK, the Senate and the executive [branch]. In the various ministries it seemed young, well-educated Palauans had moved into critical positions. This is a positive development.

“There seemed to be a general positive feeling throughout Palau, which was nice to see. Palauans seem to be ready for greater business opportunity and development.”

Carlo Cabuhat, general manager of Transpacific Insurance Brokers Corp., and also a delegate, said, “As it was my first time visiting, I was thoroughly impressed by how progressive the republic is and how the government works together toward prosperity and progress. … The connections we made during the trip are invaluable, and we look forward to collaborating with the government of Palau and Palauan companies in the future.” mbj

For further background on Palau see the following articles and photos:

Spreading Its Wings
Moving On Up
Inauguration of President Surangel S. Whipps Jr. and Vice President Raynold Oilouch - Jan. 16, 2025