Micronesia

Last update: 2026-05-25
FM USD$ English
Pros
Absence of federal personal income tax and competitive corporate tax rates for business entities.
High levels of personal safety and low crime rates within a stable Pacific environment.
Minimal state interference in private affairs and strong protection of basic civil liberties.
Cons
Property rights limitations due to constitutional prohibitions on land ownership for non-citizens.
Severe infrastructure deficiencies regarding electrical stability and limited high-speed internet connectivity.
High economic reliance on foreign subsidies and restricted local market size for business scaling.
Personal income
NONE
Corporate
NONE
Capital gains
NONE
VAT (standard)
NONE
i 10 PRIVACY GRADE
i 3.8 VERY LOW TAX
i 2.4 HOLDING
i 2 CRYPTO HAVEN
i 1.7 DIVIDEND PIPELINE
i 0.9 EASY CITIZENSHIP
VERYLOW TAX 3.8/10 HOLDING 2.4/10 DIVIDENDPIPELINE 1.7/10 CRYPTOHAVEN 2/10 PRIVACYGRADE 10/10 EASYCITIZENSHIP 0.9/10
01/08

Will Micronesia tax what you earn?

income tax tax residency territorial system

NO. Micronesia doesn't tax personal income, and doesn't reach for you when you settle. No withholding, no return, no centre-of-vital-interests test waiting to trip. Salary is a non-event here, both in the rate and in the paperwork.

Personal income taxi
NONE
no personal income tax framework
Income simulatori
N/A
no income tax framework — nothing to simulate
Tax residence testi
N/A
no formal tax residency test · matters mainly for citizenship / immigration tracks
02/08

Will Micronesia tax what you own?

capital gains wealth tax inheritance dividends interest

NO. Micronesia doesn't tax what you hold. No capital gains, no annual wealth assessment, no inheritance regime. The value sitting in your portfolio compounds untouched, and leaves it the same way it arrived.

Capital gainsi
NONE
no capital gains regime
Dividend taxi
NONE
no dividend tax
Interest incomei
NONE
no interest income tax
Wealth taxi
NONE
no annual wealth tax · no real-estate wealth tax · no net-worth assessment
Crypto · tax regimei
Regime
ZERO TAX
Rate
0%
The Federated States of Micronesia does not impose capital gains tax on individuals. Personal income tax is strictly limited to wages and salaries. Professional trading is classified as a business activity and is subject to Gross Revenue Tax (GRT) at a rate of 3% on gross receipts exceeding $10,000, rather than on net capital gains.
Crypto-to-cryptoi
NEUTRAL
a swap is not a taxable realisation event
FATF travel rulei
NOT SIGNED
no information-sharing obligation on VASP transfers
Inheritance systemi
NONE
no estate tax · no heir-based duties · no succession tax framework. Wealth transfers across heir-classes are not taxed in this jurisdiction. Only standard probate / registration fees may apply.
03/08

Is it easy to run a company in Micronesia?

corporate tax criminal liability public registry VAT IP box

YES. Micronesia delivers the maximum operational chill: no corporate income tax on standard profits, no criminal liability for misuse of corporate assets, and non-public corporate registries. The state doesn't take a cut, doesn't put your intra-company flows on a prosecutor's desk, and doesn't drop your name into a public search box. VAT sits at n/a.

Corporate taxi
NONE
no corporate income tax framework
IP Box · Patent Boxi
NONE
no IP regime · IP income taxed under standard corporate rules
Misuse of corporate assetsi
NO CRIMINAL LIABILITY
Civil Matter / Breach of Fiduciary Duty
The Federated States of Micronesia (FSM) follows a common law legal tradition (heavily influenced by U.S. law). Under this system, while a corporation is a separate legal entity, a sole shareholder-director who uses corporate funds for personal expenses while the company is solvent is generally not subject to criminal prosecution for theft or embezzlement. This is because the individual, as the sole person authorized to act for the corporation, is deemed to have consented to the transaction. Such actions are typically addressed as civil breaches of fiduciary duty under Title 36 of the FSM Code (Corporations) or as tax issues (e.g., constructive dividends), rather than criminal 'Misuse of Corporate Assets' (a concept primarily found in Civil Law jurisdictions like France).
Shareholders privacyi
PRIVATE
Registrar of Corporations
Directors privacyi
PRIVATE
Registrar of Corporations
Incorporation costi
Business Corporation
Corporation
FSM Registrar of Corporations Filing Fee (Articles of Incorporation) EUR 86
Corporate Name Reservation Fee EUR 17
Notarization of Incorporation Documents EUR 9
Foreign Investment Permit (FIP) Application Fee EUR 216
Initial State Business License Fee (Estimated) EUR 216
Professional Incorporation and Legal Service Fees EUR 647
Total EUR 1,191
VAT standard ratei
NONE
no general VAT · no consumption tax framework
04/08

Is Micronesia good for your holding company?

treaty network participation exemption withholding

NO. Micronesia doesn't carry a treaty network, which makes it unsuitable as a holding jurisdiction. Any dividend flowing in or out faces full statutory withholding, and no domestic participation exemption can compensate for missing relief on the source side.

Territorial systemi
Individuals
TERRITORIAL
Corporates
WORLDWIDE
Individuals: territorial — foreign-source income generally untaxed. Corporates: worldwide.
Participation exemptioni
NONE
no dividend participation exemption regime
CFC rulesi
NONE
no controlled foreign corporation regime · foreign-source corporate income out of scope
WHT · dividendsi
no withholding on outbound dividends
WHT · interest
no withholding on outbound interest
WHT · royalties
no withholding on outbound royalties
Tax-haven WHT
no punitive rate on record
Treaties signedi
0
active
Treaties pending
in negotiation
Tax treaty networki
origin · FM 0% > 0% no treaty
Inspect a country
Hover any country on the map to read its withholding-tax treaty with FM.
Country Status Dividends Interest Royalties
// no treaties match
05/08

What does it cost to come and go from Micronesia?

exit tax territorial system dual citizenship

LITTLE. Coming and going from Micronesia is cheap. The country runs a territorial system (foreign income stays foreign), and there's no exit tax on departure. You leave with what you came in with, plus whatever you earned abroad while you were here.

Exit taxi
NONE
no triggers active · residence change tax-free · no deemed-disposal mechanism
Dual citizenship
FORBIDDEN
naturalisation requires renouncing existing citizenship
Citizenship paths
Residence
Marriage
Birth
Descent
Investment
06/08

Will Micronesia protect your privacy?

info exchange corporate registries

YES. Micronesia has joined almost none of the major automatic-exchange frameworks (CRS, FATCA, CARF, MLI, MAAC), and its corporate registries are non-public. Account flows stay out of foreign hands; ownership stays out of public ones. Discretion is built into the system.

Multilateral reporting frameworks 1/10 active
CRS
CARF
FATCA
MLI
BEPS
MAAC
GLOBAL FORUM
EOIR
CRYPTO-CARF
CRYPTO TRAVEL RULE
07/08

Is Micronesia itself a liability?

blacklists FATF standing

NO. Micronesia carries no entries on any major blacklist, though it sits outside FATF membership. Counterparties may apply light extra due diligence, but no formal stigma attaches to dealing with it.

Blacklist exposure Clear everywhere
FATF
grey / black list
EU
non-cooperative list
FRANCE
ETNC list
SPAIN
tax-haven list
PORTUGAL
favourable regimes
BRAZIL
low-tax list
08/08

Will you feel free in Micronesia?

press freedom crypto CBDC EU

Not enough data to assess civil liberties and financial freedom in Micronesia.

Press freedom · RSF indexi
Central bank digital currencyi
NONE
no announced CBDC program · no pilot · no retail or wholesale prototype on record
SEE ALSO

Other jurisdictions worth comparing

Picked by similarity of strategic profile to Micronesia. No editorial ranking — neighbours in the same scoring space.

PROFILE-ADJACENT Same shape, comparable overall friction.
NOTABLY MORE FAVORABLE Same family of strategies, higher total score.
NOTABLY LESS FAVORABLE Same family of strategies, lower total score.