Marshall Islands

The Republic of the Marshall Islands (RMI) is an island country in the northern Pacific Ocean which corporate law combines elements from the US and the UK. The RMI jurisdiction has emerged as an offshore centre due to its advantageous economically and politically stable business environment, low tax regime, corporate legislation together with a flexible and simple company formation policy.

Governed by the Associations Law 1990, a Marshall Islands non-resident company is a flexible and tax-free vehicle without any mandatory or annual filings. It can carry out any business activity, except gaming and financial services such as banking, insurance, and trust.

The Marshall Islands is on the FATF whitelist and is not on the EU and OECD’s non-cooperative tax jurisdictions.

Key Features
  • Exempt from any form of local tax: offshore companies are not subject to any taxation on any type of income, profits, dividends, interests, royalties, compensation, capital gain and other related sources of revenue for offshore companies
  • No tax exchange information agreement
  • No requirement to file annual accounting reports
  • Audit of accounts is not required
  • Meetings are not required
  • Confidentiality: There is no public register of company shareholders, directors, or other beneficiaries
  • One shareholder and one director (can be the same person) suffice to register an offshore company
  • Corporate director and Nominee services are permitted
  • Permission is granted to issue registered, preference, redeemable shares, with or without par value and with or without voting rights in any currency
  • Bank account can be outside Marshall Islands
  • Registration requirements and process are simple and straightforward
  • Can be used for: asset management and protection, real estate property holding, investment holding, international trade, intellectual property holding, holding vessels, etc.
  • Re-domiciliation of foreign companies to Marshall Islands is permitted
Requirement
  1. It is necessary to have a secretary
  2. Registered office address needs to be in the Marshall Islands
  3. To have a registered agent in the Marshall Islands
  4. One shareholder and one director (can be the same person) required to register an offshore company
  5. All records must be kept on the islands
  6. There is no specific minimum capital requirement but at least one share must be paid up. The usual authorised share capital is USD 50,000.
Restrictions

Offshore companies in the Marshall Islands are not allowed to:

  • Own real estate in the Marshall Islands
  • Engage in Financial and insurance activities without being licensed by the Marshall Islands authorities
  • Engage in commercial relationships with residents
  • To act as registered agent for resident companies
  • Engage resident organizations in the management of the company
Types of offshore companies

The following types of company are usually considered as the most popular ones by foreign companies and individuals.

International Business Company (IBC)

  • By far the most popular legal form in the Marshall Islands.
  • IBCs are exempt from all forms of local taxes
  • Audit and Filing of accounts are not required
  • Basic requirements for registration
  • Can engage in any legal business activity, except for gaming and financial services
  • Can have a sole shareholder, which can be an individual or a corporation

Limited Liability Companies

  • A certificate of formation must be publicly filed
  • The LLC agreement is not disclosed to the public
  • The LLC agreement may elect to opt out of otherwise applicable statutory LLC law in many instances, providing greater flexibility
  • An LLC may be owned by one person
  • Although being incorporated in the RMI, an LLC’s documents may need to be filed in other jurisdictions following its formation, specifically in relation to tax treatment. This is subject to the group structure and how the group requires the LLC to be taxed.