Palau
               
Capital city:                Ngerulmud
Currency:                    United States dollar (USD)     
Population:                21,503   
Language:                  English and Palauan  
GDP:                            USD$297 million 
GDP per capita:        USD$13,812

Palau (historically Belau or Pelew), is an island country of 340 islands (located in the western Pacific Ocean and forming the western chain of the Caroline Islands in Micronesia). Palau is a presidential republic in free association with the United States, which provides defence, funding, and access to social services.

The country was originally settled approximately 3,000 years ago by migrants from the Philippines. In 1574 they were made part of the Spanish East Indies, and in 1898 sold to Imperial Germany (under the terms of the German–Spanish Treaty). During World War 1 the Imperial Japanese Navy conquered Palau and ruled them until World War II. During the ‘Battle of Palely’, the American troops defeated the Japanese, and Palau became a United States-governed Trust Territory (in 1947).

Palau taxes individuals at the progressive tax rates of 9.3%, 15% and 19.6%. The corporate tax rate is only 4%, and there are no sales taxes or property taxes.