The Marshall Islands is a well-known offshore jurisdiction that is extremely good for some types of companies, and it has a high reputation in the international business landscape. It is a tax haven, and this fact was officially recognized by the European Union in February 2023 when the Marshall Islands was added to the list of non-cooperative jurisdictions. However, it does not prevent successful entrepreneurs from carrying out their business activities using a company incorporated in this offshore destination.
We would like to invite all those interested in an offshore company for a business to our portal where you will find an extensive knowledge base of articles devoted to offshore business, international banking, tax optimization, accounting procedures, investments (including citizenship by investment), and more. Our experts help entrepreneurs start their companies in foreign jurisdictions on a daily basis, and they share useful tips about the process on our portal.
You can also book a session with a professional to discuss any questions related to your business and find the best solutions available. The business environment changes (sometimes very quickly), and interesting offers come and go. However, we closely monitor the situation and have all the updated information you may need. We will help you choose a suitable jurisdiction at no fee – and if you want to get your business on a turnkey basis (or even buy a ready-made company), we can help you with that. Do not hesitate to get in touch with us without delay!
The Marshall Islands: Reasons to Choose
The Marshall Islands is a small republic located in the Pacific Ocean (north of the equator) that is selected by many business people as a convenient tax haven. It offers a wide range of offshore financial products that attract many investors and entrepreneurs here.
Under the Business Corporations Act adopted in the Marshall Islands, all non-resident companies are exempt from local taxes. What is more, you can easily open a bank account in this jurisdiction if you are a foreigner (which is a real advantage). The Marshall Islands worked a lot to adopt the business laws that would be beneficial for international entrepreneurs, which has made the destination popular.
Unlike other tax havens, you can register public companies in the Marshall Islands, raise capital, and carry out trading activities. The absence of agreements on mandatory tax information exchange and confidentiality regulations makes this destination even more attractive.
The Economy of the Marshall Islands
The service sector plays a predominant role in the country’s economy as it has no natural resources to rely on, and agriculture and industry take second place. 60% of the jurisdiction’s GDP is made up by the financial aid provided by the USA, and its national currency is, predictably enough, the US dollar.
The most important products exported by the Marshall Islands include coconut oil and copra cake. The agricultural sector is primarily focused on the cultivation of melons, coconuts, breadfruit, pandanus, taro, and bananas. Fishing is an important industry, too.
Offshore Company in the Marshall Islands: Advantages
Let’s look at the perks you may get by registering a company in the Marshall Islands:
- Benefit from tax exemption
- No more than one director is required
- Take advantage of well-thought-out corporate legislation
- Enjoy the flexibility of the corporate structure you will form
- There is no public register of company executives
- The official language is English, so you will have no language barrier
- Private businesses are provided ample opportunities in the Marshall Islands
- The identity of directors and beneficial owners will not be disclosed
- You will not have to submit any financial reports to the official organizations
- Tax information is not exchanged with other countries
- You are not required to conduct audits and provide relevant reports
- There is no currency control in the country
- The Marshall Islands are economically and politically stable
- The country is a well-reputed offshore market
Corporate Legislation of the Marshall Islands
The laws of the Marshall Islands are a peculiar mixture of the US and British legal systems, as well as local rules and regulations. The corporate legislation adopted in the country is based on the legal norms adopted in Delaware and New York.
The laws governing the business activities in the Marshall Islands are known as the Associations Law enacted in 1990, and it includes the following acts regulating the formation of non-resident companies:
- Partnership Act
- Limited Partnership Act
- Limited Liability Company Act
- Business Corporations Act
Marshall Islands Companies: Tax Rates
The country offers various tax exemptions for local and non-resident companies that carry out activities outside the country with regard to:
- Gift tax
- Capital gains tax
- Stamp duty
- Corporate income tax
- Inheritance tax
- Personal income tax
- Dividend tax
If you conduct trading activities in the Marshall Islands, you will be liable for taxes. For example, if a company receives an income exceeding 10,000 US dollars in the country, it will have to pay a 3% tax. If the income is lower, a fixed sum of USD 80 will be charged.
Non-residents who provide services in the Marshall Islands will have to pay a withholding tax of 10%.
Renting out the land plot you possess makes you liable for a 3% tax on gross income.
Marshall Islands Companies: Restrictions
If you intend to start an offshore company in the Marshall Islands, please mind the following restrictions:
- You are not allowed to have resident companies among commercial partners
- You cannot engage local individuals to manage your company
- You cannot purchase real estate in the Marshall Islands
- You are not allowed to be a registration agent for resident companies
All limited liability companies incorporated in the Marshall Islands are required to have economic substance:
- Employ a sufficient number of qualified workers
- Have a physical address (that is, rent an office)
- Incur some costs in the Marshall Islands
The directors and shareholders of the company that fails to comply with these requirements may be subject to a fine of up to 10,000 US dollars. If the violation persists, the legal entity may even be dissolved by the decision of the local authorities. Reports on substance are submitted on a regular basis via the company’s registration agent.
Please click on the above link to read more about offshore company formation and book a session with our experts to discuss your situation. We will make offshore company registration a smooth experience for you.
