FIB license foreign liveaboard business, board defines liveaboard vessels as hotels
Foreign Investment Board unanimously approved a permit for operation of a 14-room luxury live-aboard vessel called The Palauan Pearl in Palau by issuing its Foreign Investment Approval Certificate (FIAC) despite the law reserving tour business activities exclusively to Palauans.
The business, which is solely owned by Mr. Ming Yung Ha, a citizen of People’s Republic of China, applied for an FIAC to Foreign Investment Board on November 20, 2019. It applied to operate a liveaboard vessel in Palau, providing diving services for guests, hotel accommodations, tours and transportation to and from the airport.
Recently amended Foreign Investment law RPPL 9-64 Section 105 (b) 3 & 4 specifically reserves any form of water transportation, travel and tour agencies, any form of land and water tour services to Palauans only.
The law allows for leasing of water crafts registered in another country by businesses in Palau. It nevertheless restricts operation of any form of water transportation, water and land tour business services to locals only.
In response to Island Times inquiries, FIB responded that they met with the local agent of the company, Duncan Idip and Jake Ramon to discuss the application on November 30th, 2018. After the meeting the Board concluded that it could not approve the project because some of the proposed activities did not meet RPPL 9-64 Section 105 (b) on reserved business provisions.
The FIB than added a statement overturning its first decision and redefined liveaboards as hotels. “The Board then concluded that the liveaboard business could be approved because in this case it could be more like a hotel than a water transportation service and the reserved business activities could be provided by partnerships with Palauan owned entities.”
The Palau Pearl license application sought license as sole proprietor of the business and did not indicate on its applications plans to partner with local business entities for water and tour operation services.
Furthermore, water and tours services under Foreign Investment Act RPPL 9-64 does not provide an option for partnership with non-citizens but states, “(b) The following business activities are reserved exclusively for business enterprises in which only citizens are owners or part owners and shall not be permitted to be undertaken by any business enterprise in which a non-citizen is an owner or part-owner.”
The motion to approve the change was made by Vice Chairman Ephraim Ngirachitei, seconded by Teodore Rengulbai and approved unanimously by members of the Foreign Investment Board.
The investment is purportedly worth $4 million according to the submitted application. (L.N. Reklai)