Marshall Islands Company Formation

Tax-Free Zone. International companies are subject to the following tax charges: 0% corporate tax, 0% VAT, no dividend tax, royalties, interest, and customs duties.
Minimum organizational structure requirements. In the case of Company Formation in the Marshall Islands, its organizational structure must include one director, one shareholder (no residency requirements), and a secretary (can be a legal entity or a private individual).
Foreign exchange transactions. There is no currency control, it is possible to open a bank account in any currency and any country in the world.
Initial capital. The legislation does not set a specific amount and currency of the authorized capital, but on average contributes about $500,000.
Proximity to the United States. Location and status of an associated state with the USA, for business opens the American market.
Data protection. There is no information about the ultimate beneficiary in public registers. Data on the company is held by the registration agent and is issued upon the official request of government agencies.
Reporting. The Republic does not impose any requirements for keeping financial statements and undergoing an annual audit.
Possibility of redomiciliation. Companies are freely authorized to transfer their legal structures from any country to the Marshall Islands.
Remote management. Also, there is no requirement for the number and location of shareholder meetings.

This jurisdiction has imposed certain requirements on international companies such as:

• Prohibition on doing business with residents. Companies are prohibited from doing business with residents, acting as registration agents for residents, having residents in their management, and owning real estate in the area.
• Legal address. Based on FATF and EC requirements, from 2019 companies must have a legal address in the jurisdiction where they are registered and keep in this place all company documentation.
• Requirements to the organizational structure. One managing director, at least one shareholder, and a secretary must be appointed.
• Registration Agent. When setting up a company, a local licensed registration agent is required, who will subsequently renew the company’s registrations.
• Unique name. The state has defined criteria for the name of the company, such as: not repeating the same name as previously registered companies, at the end of Ltd, Inc, Sociedad Anónima, etc. according to the type of company, prohibiting the use of “bank”, “trust”, “Royal”, “Charity”.
• Costs. The company costs include a 7% tax on the Pension Fund and 3.5% to the Social Insurance. Marshall Islands company formation fees also include a recommended initial capital of ,000, a license fee, annual registration renewal agent fee.

The legislation of the island requires that when creating a new legal entity to form a package of documents (in English with notarization), such as:

• Copies of passports and proof of residence for managers, shareholders, and secretaries.
• Articles of Association, Memorandum, Agreement on Establishment.
• Minutes of the shareholders’ meeting on the appointment of a director.
• Document confirming the appointment of the secretary.
• Register of directors, shareholders, and secretaries.
• Data on the legal address.
• Payment of state fees for registration.

Types of companies that are mostly chosen to open in the Marshall Islands:

• IBC (International Business Company)

This type of structure is more likely to be chosen by investors for international trade, IT business, marketing, and consulting services. IBC does not pay local taxes, only state duties, and does not file financial reports. The company is managed by one director and includes one shareholder. Issuance of stock is authorized.

• LLC (limited liability company)

Requires one director (can be a natural person or a legal entity), and at least one shareholder (no maximum number). Shareholders are liable according to their share in the statutory capital. May not engage in insurance or banking activities.

• LP (limited partnership)

Liability is divided according to the size of the partner’s contribution, the general partner is primarily liable for all obligations.

• FME (foreign maritime company)

The company may have maritime vessels in the territory of the Republic. The confidentiality of data is preserved. Also, no taxes are paid, or received outside the jurisdiction.

The main governing statute that specifies the regulations for setting up an offshore company is the Associations Law of 1990 which includes:

• Business Corporations 1990.
• Limited Liability Companies Act 1996.
• Revised Uniform Partnership Act.
• Limited Partnership Act.

The Marshall Islands has not concluded any double taxation treaty.

Offshore companies are required to comply with the following tax regime:

• no corporate tax, VAT, capital gains tax, dividends, interest, royalties if the source of income is outside the Republic;
• no stamp duty;
• 7% pension fund;
• 3.5% social security.