Eligibility for US Citizens
United States citizens are fully eligible to apply for Palau Digital Residency. The Republic of Palau and the United States have a longstanding relationship through the Compact of Free Association, making the application process straightforward for Americans.
To apply, you need a valid US passport, must be at least 18 years old, and must pass the standard background verification. The application is completed entirely online, and your physical Palau ID card will be shipped directly to your US address via DHL.
There are no restrictions on US citizens applying for Palau Digital Residency. Whether you live in New York, California, Texas, or any other state, you can complete the entire process from home. The typical approval time is 2-4 weeks from application to receiving your physical ID card.
Tax Implications for Americans
Palau Digital Residency does not change your US tax obligations. As a US citizen or resident, you remain subject to US taxation on your worldwide income regardless of any foreign residency status. The IRS taxes based on citizenship, not residency.
The 0% tax on Palau-sourced income that comes with digital residency only applies to income actually sourced from Palau. For most digital residents, this is not relevant since they do not conduct business in Palau itself. Your income from US or international sources remains fully taxable by the IRS.
FBAR and FATCA Considerations
Palau Digital Residency does not typically trigger FBAR (FinCEN Form 114) or FATCA reporting requirements since these apply to foreign financial accounts, not residency status. However, if you open any financial accounts associated with your Palau residency, you may need to report them if balances exceed thresholds.
As always, consult with a qualified US tax professional familiar with international tax matters to understand your specific situation. Tax laws are complex and individual circumstances vary significantly.
Security Clearance Considerations
If you hold or are applying for a US security clearance, you should carefully consider how Palau Digital Residency might affect your status. The SF-86 form (Questionnaire for National Security Positions) requires disclosure of foreign contacts, activities, and potentially foreign residency or identity documents.
While Palau Digital Residency is not citizenship and does not grant physical residency rights, it is a government-issued identity document from a foreign nation. Depending on your clearance level and adjudicator interpretation, you may need to disclose this on your SF-86.
Key considerations for clearance holders:
- Palau is a close ally of the United States with a Compact of Free Association
- Digital residency does not indicate dual allegiance or foreign preference
- Proactive disclosure is always better than omission
- Consult your security officer before applying if you have an active clearance
We recommend reading our detailed article on security clearance implications and consulting with your Facility Security Officer (FSO) or a security clearance attorney if you have concerns about how this might affect your clearance status.
Common Use Cases for Americans
US citizens apply for Palau Digital Residency for various reasons. Here are the most common use cases among American applicants:
Cryptocurrency KYC
Many Americans use Palau ID for Know Your Customer (KYC) verification on cryptocurrency exchanges and DeFi platforms. The government-issued ID provides a legitimate verification option while maintaining privacy through zero-knowledge technology. This is particularly valuable for accessing platforms that may have restrictions on US-based identification.
Privacy-Conscious Identity
For Americans concerned about data privacy, Palau ID offers a government-backed identity that uses zero-knowledge proofs. You can verify your identity without exposing your full personal information to every platform that requires verification.
International Business
Entrepreneurs and digital nomads use Palau ID when dealing with international partners or operating businesses across borders. It provides a recognized government ID that can simplify certain verification processes.
Web3 Participation
As decentralized applications increasingly require identity verification, Palau Digital Residency provides a blockchain-native identity solution. The ID is stored on-chain with privacy-preserving technology, making it ideal for Web3 participation.
Shipping and Delivery to the USA
Your physical Palau ID card is shipped via DHL to any address in the United States. Delivery typically takes 5-10 business days from Palau after your application is approved and your card is produced.
The shipping process includes:
- Tracking number provided once your card ships
- Signature required upon delivery
- No customs duties or import taxes for personal identification documents
- Delivery available to all 50 states, DC, and US territories
If you're traveling or prefer delivery to a business address, you can specify any valid US address during the application process. PO Boxes are not recommended as DHL typically requires a physical street address for signature confirmation.
Frequently Asked Questions
Common questions from US citizens about Palau Digital Residency
All information verified as of December 2025. Prices and features subject to change. Always verify current pricing with providers.
