The Foreign Investment Board (FIB) revealed that the plan by a Chinese insurance company to build a call center facility in Melekeok State is outside the scope of the Foreign Investment Approval Certificate (FIAC) issued to it in January 2017.
FIAC No. 609-2017, which was issued to Chinese company GT Insurance Inc., was granted to the firm to operate within the scope of carrying out an insurance business and does not provide any mention of operating a call center.
FIB Chairperson Fermin Meriang said in an interview that if they find out that the license is being used to conduct a business that is not within the FIAC scope, then it could be grounds for disciplinary actions and revocation of license.
Meriang said that the company has been approved only to provide insurance to residents of Palau including travel insurance for tourists but he clarified that their door is always open to welcome the company should they wish to apply for a separate license to operate other businesses. The FIB, so far, did not receive applications for the proposed call center project.
Meriang said that foreign investors are “strongly advised” by their board during the application process to stay within the bounds of their licenses.
The issued FIAC to the GT Insurance Inc. also provides that the company shall employ locals “to the maximum extent feasible.” This is clearly contradictory to the GT Insurance’s call center project description that revealed its employees will be fully comprised of 1,600 Chinese nationals.
FIB Legal Counsel and Interim Executive Director Cameron Van Tassel, however, said that this does not mean that the proposed project could not push through since there are exemptions from the FIAC requirements that are set by the current FIB law. Among these include exempting a foreign company if, within the first 12 months of operation, it is able to surpass the investment threshold of $500,000. An exemption could also be granted if there are some signed partnership agreement with the national or state government.
When asked if there is a possibility that the proposed project could still push through if they meet the exemptions set by the FIB law, the FIB officials said that they do not yet have enough direct information about the proposed project to be able to determine its legality.
The Times previously reported that a plan to build a $4-million call center facility in Ngerubesang, Melekeok State for a Chinese blockchain insurance company is being proposed to the state government.
The project dubbed as GT Industrial Park, according to the project description, will provide office space and accommodation facilities to around 500 Chinese employees who will work for the GT Insurance Company during the first few months of operation. The number of Chinese employees, however, is expected to eventually rise to 1,600, according to the project detail. (Rhealyn C. Pojas)