The conference committee version approved by both Houses of the Olbiil Era Kelulau did not get enough votes from the Senate.
The voting was 6-6, a majority vote of the present senators is needed to pass the conference committee version.Senators voting against the version said that the measure does not adequately protect the local businessmen.The House and the Senate are expected to go into another conference committee.Sen. Tommy Remengesau who voted against the measure said opening certain businesses to 49 percent ownership to foreign investors “is not an acceptable way to protect Palauans.”“The interest and the benefits of the Palauans should be the priority consideration in economic development,” he stated.He said he rather see 5 or 10 Palauan businesses succeed than open skies for 100 to 1,000 foreign investors who will dominate the business sector.The former president said that Palau is a small country and the leadership are supposedly keeping or developing the country for Palauans.The purpose of House Bill No. 8-3-1, HD3, SD5,CD1 is to attract and encourage foreign investment in Palau in order to create a more broad based and sustainable economy.President Johnson Toribiong originally introduced the measure that seeks to make the business climate in Palau more foreign investor friendly after removing several restrictions for foreign investments stated in the existing law.Toribiong’s bill also wants to abolish the existing Foreign Investment Board to avoid it being political.The president said that the Palau Registrar of Corporations will be in charge with accepting Palau Foreign Investment charters.The conference committee version however did not want to abolish the board but instead put the responsibility to an agency called Foreign Investment Authority.The conference version though gives power to the Authority but it will only have review rights over PFI charters that are issued to PFI corporations that are less than 51 percent owned by Palauan citizens.It also calls for a straightforward and speedy licensing process.Both the Senate and the House disagreed with the president that the While the Registrar of Corporations will still be responsible for issuing corporate charters for foreign-owned corporations, the authority will have the finally approval power for these foreign businesses.The authority’s regulatory powers however shall be restricted.The conference committee version also expanded the type of businesses reserved for citizens and PFI corporations in which the citizens are the owners of at least 51 percent of the PFI corporation’s common stocks.The membership of the authority will be composed of five members. The OEK version wants to retain the present members of the FIB.The new measure sets the application of the charter to $5,000.
