Incentivizing Investors To Palau’s Far Flung States

By Jackson Henry —-

Harvard scientist B.F. Skinner proved that the central mechanism in shaping and controlling behavior lies in the type of stimulus provided. Through experiments, he showed the world how creature behaviors are modified through positive reinforcements. 

Skinner’s theories also work for investors just the same. Every businessman avoids risks and seeks investments with the highest returns. For that reason, many businessmen travel to all corners of the world seeking investment havens where incentives are too attractive to resist. Investors call attractive deals, “Wall Street Darlings”.

Dunn & Bradstreet recently rankedSingaporeis one of the most attractive environments for investments due to its fantastic tax incentive programs and stable risk profile.Singaporehas a progressive tax structure that starts at 0% and do not exceed 20%. To incentivize investors, profits on capital gains are not taxed at all. Furthermore, it offers every business a choose to register a Singapore company formation an automatic 400% tax deduction or an option for a 60% cash payout each year for investments made through the Productivity and Innovation Scheme.

To bolster Intellectual Property rights,Singaporeoffers protection to those who have made new discoveries. The government also offers businesses a vast network of free trade agreements with 27 countries.

All these business-enabling incentives gives Singapore that “defining edge” in attracting investors and building confidence in businessmen regarding the safety of their investment as well as the probability of them striking jack pot.

No wonder why Facebook’s billionaire co-founder Eduardo Sarevin moved toSingaporeafter the company did the $16 billion IPO on Wall Street just last month.

One of the reasons whyPalau’s private sector growth has been dismal and foreign investors have been “gun shy” is due partly to the lack of attractive incentives, especially with the far flung states of Kayangel, Peleliu and Angaur.

To bolster the economy of these states, it is time that proper legislation are enacted to give tax breaks and fast track permitting to investors willing to risk their capital in Kayangel, Peleliu and Angaur. It is important the first 7 years of business operation enjoys friendly tax schemes to assure their survival. In the long run, citizens of these states will have stable jobs and their governments will reach a point where they do not depend on Block Grants from the national government.

As B.F. Skinner proved it years ago, to shape and modify investor behaviors, positive reinforcements and incentives are the key.

An investor once said, “There is no medicine like hope, no tonic as powerful as attractive incentives to succeed”. In our quest to build strong economies of our far flung states, we need to roll the red carpet to quality investments by way of attractive business incentives.

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