Marshall Islands Company Registration

Marshall Islands Company Registration

Marshall Islands company registration is straightforward if you are familiar with the entire process. With Tetra Consultants at the wheel, you will be able to dedicate your time and resources to other more important business channels. With our lean-and-mean mentality, you can rely on our team of experts to provide you with a seamless experience throughout the whole process of foreign company registration in Marshall Islands. Our ultimate goal is for your Marshall Islands company to be operationally ready within the stipulated time frame.

The Marshall Islands became a highly attractive jurisdiction for offshore company formation. Thanks to the country’s economically and politically stable business environment, favorable and low tax regime together with unlimited business opportunities, it gives numerous business advantages. A Marshall Islands company formation is a very flexible, tax-free structure, with few restrictions on the business that the company can engage in.

Our service package includes everything you require to set up business in the Marshall Islands:

• Marshall Islands company registration with the Marshall Islands Registrar of Companies

• Company secretary and local registered address

• Corporate bank account opening services

• Financial and business license application

• Annual accounting and tax services

How long does it take for a Marshall Islands company registration and open a corporate bank account?

• Tetra Consultants will complete the process of registering the company in the Marshall Islands within 1 week. After receiving the due diligence documents of directors and shareholders, our team will search for the availability of your preferred company name and register the same. Further to this, we will prepare the mandate corporate documents to be registered.

• Throughout the Marshall Islands company registration process, you will not be asked to travel to the Marshall Islands. We seek to provide our international clients with no travel to minimal travel solutions.

• After Tetra Consultants has set your company in the Marshall Islands, you can expect to receive all the official documents including Certificate of Incorporation, Articles of Association, Memorandum of Associations, and other evidentiary documents at your preferred location.

• Following this, Tetra Consultants will also apply with other authorities for relevant business licenses to be obtained to run the business smoothly.

• Within 4 weeks of registering your Marshall Islands Company, we will open a corporate bank account with a local or internationally reputable bank.

• As such, you can expect your Marshall Islands company to be fully operational within 5 weeks of engaging Tetra Consultants.

What are the benefits of registering a company in the Marshall Islands?

• Zero taxes: Offshore companies registered in this jurisdiction do not have to pay the profit tax. Dividends are also untaxable.

• Nominee services: Nominee shareholders and professional company directors are available in the Marshall Islands. Besides, a corporate entity can act as a company director.

• Bearer shares: Issuance of bearer shares is allowed in the Marshall Islands and they can be kept anywhere. You should bear in mind, however, that companies issuing bearer shares are going to have problems opening bank accounts in other countries. Experts of the InternationalWealth portal will gladly consult you on opening a foreign bank account for your offshore company that has issued bearer shares.

• Ease of company formation: One shareholder and one director will suffice to register an offshore company in the Marshall Islands.

• High speed of company registration: Registering an offshore company in the Marshall Islands takes only a week from the moment when the Registrar receives correctly completed application documents.

• Confidentiality: There is no public register of company shareholders, directors, or other beneficiaries in the Marshall Islands. Your competitors will not have a chance to learn that you own an offshore company. At the same time, the Marshall Islands automatically exchanges the residents’ fiscal information with some other countries.

Can a foreigner start a business in the Marshall Islands?

• A Marshall Islands non-resident domestic company is a very flexible and tax-free vehicle, with just a few restrictions on the business that the company can carry out. It can engage in any legal business activity, except gaming and financial services such as banking, insurance, and trust.

• Non-resident domestic companies are also restricted from doing business with Marshall Islands residents or companies but may maintain professional contact with solicitors, barristers, accountants, bookkeepers, trust companies, the management or secretarial companies, investment advisors, or other similar persons or entities carrying on business within the Marshall Islands.

• This type of offshore corporation is exempt from all forms of local taxes.

• Marshall Island non-resident domestic entities may be incorporated by a sole shareholder, who can be either an individual or a corporation and may be managed by a sole director who can be the same person as the shareholder. There are no minimum capital requirements and shares may be issued in any form.

• Members of a non-resident domestic entity may elect to not disclose their details in a public register.

• In addition, non-resident domestic entities face no reporting requirements. No audited accounts or annual returns are required to be provided to the government.

Types of companies in the Marshall Islands

The Marshall Islands offers, among others, three types of entities: corporations, limited liability companies, and limited partnerships. Each has its own features, making it important to select the structure that best suits the ultimate needs of any given entity.

Foreign companies and citizens usually consider the following types of company formation in the Marshall Islands:

International Business Company (IBC)

• The International Business Company (IBC) is by far the most popular legal form in the Marshall Islands. Basic requirements for registration of this type of company in the Marshall Islands are:
  • The minimum number of directors and shareholders is one.
  • A legal address and a registered agent on the islands are required.

• The IBC registered in the Marshall Islands is also prohibited from doing business with citizens or companies established by them. However, they can maintain professional contacts with lawyers, accountants, trust companies, managers or secretarial companies, investment advisors, or other similar persons or organizations engaged in their activities. IBCs, as a separate type of local corporation, are exempt from all forms of local taxes.

• IBCs are considered non-resident legal entities of the Marshall Islands, therefore they can be registered as the sole shareholder, which can be both an individual and a corporation. Marshall Islands offshore companies can be managed by a single director, who can be the sole shareholder of this company. It is very convenient for registering a sole company in order to conduct international business as a private company.

• Marshall’s IBC is a very flexible legal entity with only a few restrictions on businesses that such companies cannot carry out. Marshall Islands offshore companies can engage in any legitimate entrepreneurial activity, except for gaming and financial services, for example, banking, insurance, and trust.

Corporations

• These entities are easy and convenient the establishment in the Marshall Islands and also it is convenient to manage these types of entities. It consists of a standard memorandum act which takes very less time to be prepared. There is no minimum number of directors or shareholders required. This type of entity can be created online.

Re-domiciliation

• This type of Company is one that is allowed by the Marshall Islands Act to register itself elsewhere from another country and at the same time keep its original date of registration.

• Marshall Islands Business Corporations Act allows companies to transfer their domicile to the Marshall Islands. The legal basis for re-domiciliation was adapted from the law of Delaware, USA. On re-domiciliation, the original date of incorporation and company existence remains the same and is unaffected. Redomiciliation is currently free of charge and the company is not billed its first annual fee until one year after the re-domiciliation date.

The documents required for re-domiciliation are as follows:

• Signed articles of domestication (obtainable from the national registry through International Registries Inc. offices);

• New Marshall Islands articles of incorporation;

• A copy of the company’s articles of incorporation or articles of association from the previous jurisdiction, and any amendments to those articles of incorporation or articles of association; and

• A document providing evidence of corporate existence, such as a certificate of good standing.

Limited Liability Companies

• A certificate of formation must be publicly filed, but the limited liability company agreement, or LLC Agreement, which governs how the LLC will be operated, is not public. Unlike a corporation that cannot contract out of statutorily applicable corporate law, the LLC agreement can elect to opt out of otherwise applicable statutory LLC law in many instances, which gives LLCs much greater flexibility. Unlike a partnership, an LLC may be owned by one person.

• Even though an LLC has been formed in the Marshall Islands or Liberia, it is possible that documents will need to be filed in other jurisdictions shortly after formation, specifically documents relating to tax treatment. This will depend on the group structure in which the newly formed company sits and how the group requires the LLC to be taxed.

• LLCs must be managed in accordance with the terms of the LLC Agreement, so it is important to ensure the terms are workable on a day‑to‑day basis. For example, it is quite common for the LLC Agreement to provide that a member (i.e., equity holder) will manage the company directly, but then the member, in contravention of the LLC Agreement, allows others to manage the company. To the extent these terms are not properly followed, the manager is subject to personal liability, and the action taken by such person may not be valid.

Limited Partnerships

• Similar to LLCs, a certificate of limited partnership (which is typically a short, one‑page document) must be publicly filed, but the Limited Partnership Agreement, which governs how the limited partnership will be operated, is not public. Unlike a corporation that cannot contract out of statutorily applicable corporate law, the Limited Partnership Agreement can elect to opt-out of otherwise applicable statutory LP law in many instances.

• Although a limited partnership is a slightly more complicated structure than an LLC (due to the requirement to have one or more general partners, who are liable for the limited partnership’s debts and obligations, and one or more limited partners, who are not liable for the limited partnership’s debts and obligations), certain foreign jurisdictions are more comfortable transacting business with a partnership rather than an LLC. Because some foreign jurisdictions do not have the equivalent of an LLC, it is sometimes more difficult for LLCs to navigate a third party’s internal processes, procedures, and banking matters.

• Although the traditional limited partnership is governed by a general partner, similar to Delaware, the Marshall Islands statute permits the general partner to delegate its rights and powers to manage and control the business and affairs of the limited partnership to other persons. Often, the Limited Partnership Agreement of a Marshall Islands limited partnership will provide that the general partner has delegated its responsibility to a board, which in turn may act in a manner similar to a corporation (so long as such is appropriately included in the Limited Partnership Agreement).

Restrictions on offshore Marshall Islands Company

Offshore companies in the Marshall Islands can not:

• Have commercial relationships with residents;

• Own real estate in the Marshall Islands;

• Engage resident organizations in the management of the company;

• Provide services of registration agent to resident companies.

• In addition, financial and insurance activities are subject to licensing.

What are the regulatory requirements for registering a company in the Marshall Islands?

• The number of directors and shareholders shall be 1 or more persons. They can be nominal;

• It is necessary to have a secretary;

• Permission is granted to issue shares without par value. Issue of bearer shares is prohibited;

• In connection with the new changes that came into force on January 1, 2019, under pressure from FATF and the EU, most offshore companies were forced to introduce new legislation, which obliges companies to ensure a real presence in the territory of these jurisdictions. Under the innovations were also the Marshall Islands. In connection with the new rules, the company’s activities must be managed on the Marshall Islands (the company’s board meetings must be held regularly (there must be a quorum), and all documents must be kept on the islands;

• The charter capital of offshore companies in the Marshall Islands is not specified, but shall be declared. At the same time, the terms of its payment are not stipulated;

• The company name should be unique and not similar to those already existing ones. The name can be registered in any language when translated into French or English; The company in the Marshall Islands can select any bank for cooperation, as well as a number of accounts necessary for commercial purposes. All banking transactions are confidential, and information regarding them shall not be disclosed;

• Only information about the name of the company and the changes in the constituent documents is open to third parties. There is no information concerning the beneficial owner in the register;

• An offshore company should be registered in the Marshall Islands, and in addition, a registered agent is needed

• The main activity of the company must be carried out from the Marshall Islands, however, companies that can prove tax residency in another jurisdiction do not fall under the new requirements, which came into force on 01/01/2019;

• Financial and insurance activities are subject to licensing.

What are the documents required for Marshall Islands company registration?

The initial list of documents required for Marshall Islands company registration are:

• Certified by a notary copy of the passports of the directors and shareholders of the company.

• A document proving the place of residence (for example, a certified and translated into English copy of the passport with a place of residence or a utility bill).

• In the case when the directors of the company are represented by legal entities, it is necessary to submit registration documents to them.

How to register company in the Marshall Islands?

• Tetra Consultants advises you to read through this guide to fully understand the Marshall Islands company registration process and open a corporate bank account.

• By systematically following the steps below, you can expect to start conducting business with your Marshall Islands company within 5 weeks.

Accounting and tax obligations in the Marshall Islands

• The non-resident domestic companies are exempt from taxation in the Marshall Islands which means all the foreign-owned companies are exempt in the Marshall Islands provided they do not conduct any activity in the Marshall Islands.

• Local Companies have a corporate tax rate of 11.5% and the sales tax rate varies from 2% to 4% apart from this, there exists no property tax in the Marshall Islands

• There is no taxation on any profits, income, dividends, royalties, compensation, or other related sources of revenue.

• There are no requirements in the Marshall Islands for preparing accounts or audits.

• The Marshall Islands government has not been part of a double taxation treaty with any country apart from Residents in the US who have been resident in the Marshall Islands for a minimum of 183 days of the tax year.

Why do companies register in the Marshall Islands?

Before you advance to register company in Marshall Islands it is important to understand the political and economical development in the country to ensure that you can operate the business safely in the long term.

Political

• The Republic of the Marshall Islands (RMI) is a stable democracy with regular, competitive elections, an independent judiciary, and a free press. The Marshallese government formally encourages foreign investment, especially in the following sectors: fisheries, aquaculture, deep-sea mining, manufacturing, tourism, renewable energy, and agriculture.

• Corruption has been a chronic problem, though auditing bodies and independent courts are somewhat effective in detecting abuses and holding officials accountable. According to the data collected by the World Bank in 2020 for control of corruption, the country has a rank percentile of 55.1%.

Legal

• The regulated foreign investment in the Marshall Islands is complicated by laws that prevent non-Marshallese from purchasing land, as there is no public land in the country, foreign businesses must lease land from private landowners to operate their businesses.

• Furthermore, the costs of doing business are relatively high due to the high costs of communications and utilities, poor infrastructure, the dependence on imported materials and services, and relatively high import duties as accorded in the World Bank doing business report of 2019.

• The Marshall Islands have been removed from the EU and OECD’s list of non-cooperative tax jurisdictions.

• The Marshall Islands has ranked 153rd in the latest Doing Business report of 2019 issued by the World Bank, losing three positions compared to the previous edition.

Economy

• For centuries, the Marshall Islands has been a key hub for international shipping. Now, this small chain of atolls is at the forefront of promoting sustainability in the maritime industry.

• Home of the second largest ship registry in the world, the Marshall Islands has established itself as a key industry player despite centuries of foreign occupation and limited trading opportunities.

• The Marshall Islands have very few natural resources and for decades the inhabitants have depended on fishing. The export of fish and fish products has brought in a steady income for the islands for many years. The government also sells fishing licenses to other nations. Farmers also grow on small farms, tomatoes, breadfruits, coconuts, and melons for export.

Technology

• The World Bank in 2021 approved a US$30 million project in the Marshall Islands, where access to high-speed internet remains extremely limited and costly, that will secure faster, more reliable, and more affordable internet access across the country.

• In addition to expanding online access, the Digital RMI project aims to promote private sector investment in climate-resilient digital infrastructure and establish the foundations for digital government services and the digital economy.

Social

• People in the Marshall Islands speak the English, and Marshallese languages. According to data on inbound tourists in the Marshall Islands, 10,000 tourists arrive in the country each year.

Environmental

• The Marshall Islands is in peril of being the first country obliterated by climate change, but the country has seized this threat as an opportunity and positioned itself as a lab for new, clean technologies. It is in negotiations with some of the world’s largest companies about commercializing new ocean thermal energy conversion (OTEC) energy.

• The Marshall Islands became the registry with the third largest number of Green Award-accredited vessels in 2018. In its list of participating vessels, RMI-flagged ships represented about 16% of vessels with a Green Award accreditation worldwide.

Looking to register company in Marshall Islands?

Contact us to find out more about Marshall Islands company registration. Our team of experts will revert within the next 24 hours.

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