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Offshore Company Formation in Marshall Island

Why set up a company in Marshall Islands

When starting a business?

Marshall Islands stands as an autonomous and democratic country, with no recent legal revisions within the past year. The foundation of its legal framework are partly derived from Delaware State statutes, a factor that contributes to its business-friendly and adaptable legal system. This quality renders it an attractive option for international corporations, Limited Liability Companies, Partnerships, and Limited Liability Partnerships, catering to a range of business needs.

The Republic of the Marshall Islands sustains a steady and politically secure environment through a democratically elected parliamentary structure. Comprising dual legislative bodies, these chambers collectively select a President from their ranks to serve a four-year tenure. Notably, the jurisdiction's extensive maritime registry makes it an optimal choice for enterprises considering yacht and ship ownership and management.

Key Benefits

Known as a highly versatile jurisdiction for conducting international business, incorporating a corporation, LLC and partnership in Marshall Islands offers the following benefits:

The Marshall Islands is a popular jurisdiction for establishing offshore companies due to its attractive business environment and various key benefits. Here are some of the key benefits to incorporate a company in Marshall Islands:

Tax Advantages:

One of the primary reasons companies choose to incorporate in the Marshall Islands is its favorable tax regime. There are no corporate income taxes, capital gains taxes, or withholding taxes on dividends, making it an appealing option for international businesses seeking to minimize their tax liabilities.

Privacy and Confidentiality:

The Marshall Islands offers a high level of privacy and confidentiality for company owners and shareholders. Information about company directors, officers, and shareholders is not publicly disclosed, offering a degree of anonymity.

Ease of Incorporation:

The process of incorporating a company in the Marshall Islands is relatively straightforward and efficient. It does not require the physical presence of directors or shareholders, and many administrative tasks can be managed remotely.

Minimal Reporting Requirements:

Companies incorporated in the Marshall Islands have minimal reporting and accounting requirements. This reduces the administrative burden and associated costs for maintaining the company's records.

Flexibility in Company Structure:

The jurisdiction allows for flexible company structures, including single-member companies, and there are no restrictions on the nationality of shareholders or directors.

Stable Legal System:

The Marshall Islands has a well-established legal framework based on English common law principles. This provides a sense of stability and predictability for businesses operating under its jurisdiction.

No Foreign Exchange Controls:

The Marshall Islands does not impose foreign exchange controls, allowing businesses to freely manage their funds and transactions internationally.

No Minimum Capital Requirement:

There is no minimum capital requirement for incorporating a company in the Marshall Islands. This gives businesses the flexibility to determine their initial capital structure.

Asset Protection:

The jurisdiction offers effective asset protection, making it a suitable option for individuals and businesses looking to safeguard their assets from potential legal claims or creditors.

Global Recognition:

The Marshall Islands is well-recognized internationally, and companies registered there can often access global financial services, open bank accounts, and engage in international trade without facing major hurdles.

Cost-Effectiveness:

Incorporating in the Marshall Islands can be cost-effective compared to other jurisdictions with similar benefits. This is particularly appealing for smaller businesses and startups with limited budgets.

Marshall Islands main uses

Companies incorporated in the Marshall Islands are often used for a variety of legitimate business purposes. Some of the main uses of Marshall Islands companies include:

International Business and Trading:

Many companies choose to establish a presence in the Marshall Islands to engage in international trade and business activities. The favorable tax regime and minimal reporting requirements make it an attractive option for companies conducting cross-border transactions.

Asset Protection and Wealth Management:

The jurisdiction's strong asset protection laws can be leveraged by individuals and businesses to safeguard their assets from potential legal claims, creditors, and other risks. This is especially beneficial for high-net-worth individuals and families.

Holding Companies:

The Marshall Islands is often used as a location for establishing holding companies to hold investments, intellectual property, real estate, and other assets. The absence of capital gains taxes and withholding taxes on dividends can provide tax-efficient strategies for managing investments.

Ship and Yacht Registration:

The Marshall Islands is one of the world's largest ship registries. It offers a streamlined and efficient process for registering ships and yachts, making it a popular choice for ship owners and operators seeking a reputable and internationally recognized flag.

Intellectual Property Holding:

Companies can establish their intellectual property (IP) holding entities in the Marshall Islands to manage and protect their IP rights. This can include patents, trademarks, copyrights, and other intangible assets.

Estate Planning:

The favorable legal and tax environment in the Marshall Islands can be used in estate planning strategies, allowing individuals to structure their assets and inheritances in a way that minimizes tax liabilities and ensures smooth succession.

Consulting and Professional Services:

Many professionals, such as consultants, freelancers, and online service providers, may choose to set up a Marshall Islands company to offer their services internationally while enjoying the tax benefits and privacy features.

Private Investment Companies:

Investors may use Marshall Islands companies as vehicles to manage and invest funds in various assets, including stocks, bonds, real estate, and other financial instruments.

Joint Ventures and Special Purpose Vehicles (SPVs):

The jurisdiction's flexibility in structuring company ownership and operations can be advantageous for forming joint ventures or creating SPVs for specific projects, investments, or collaborations.

Family Office Structures:

High-net-worth families can utilize Marshall Islands companies within their family office structures to manage investments, oversee family wealth, and facilitate intergenerational wealth transfer.

Trading and Holding Company Structures:

Businesses engaged in trading or holding activities often find the Marshall Islands a suitable location to centralize their operations due to the tax benefits and ease of doing business.

Company Incorporation in Marshall Islands

Procedures to incorporate

Company Type:

Non-resident Domestic Corporation.

Directors/Officers:

Marshall Islands non-resident companies require a minimum of 1 Director, who can be either a natural person or a corporate body from any legal jurisdiction. Each Marshall Islands company must keep information on its Directors with the Registered Agent.

Shareholders:

Marshall Islands non-resident companies do require a minimum of 1 shareholder, who can be either a natural person or a corporate body from any legal jurisdiction. Each Marshall Islands company must keep information on its shareholders with the Registered Agent.

Secretary:

Marshall Islands non-resident companies do also require a Secretary, who can be a natural person or a corporate body from any legal jurisdiction. Each Marshall Islands company must keep information on its Secretary with the Registered Agent.

Authorised share capital:

Standard authorised capital is USD 50,000 and there is no requirement for capital to be fully or partly paid-up on incorporation.

Company Names:

The name of a Non-Resident Marshall Islands company must end with the words “Incorporated”, “Corporation”, “Limited”, or suffixes such as “Inc.”, “Corp.”, “Ltd.”, “S.A.”, “GmbH”, etc. Company names containing restricted words such as “Bank”, “Insurance”, “Trust”, “Assurance”, “Imperial”, “Royal” etc. will not be allowed unless a related official license has been required and issued.

Beneficial Ownership information:

Information with regard to ultimate beneficial ownership must be disclosed to the Registered Agent of the company, who keeps this record under full confidentiality .

Filing of Annual Return:

There is no requirement to file Annual Return.

Filing of Financial Statements:

There is no requirement to file Financial Statements for Non-Resident companies.

Tax Agreements:

Australia, Denmark, Ireland, Faroe Islands, Finland, Greenland, Iceland, Korea, Netherlands, New Zealand, Norway, Sweden, USA.

Restrictions on Marshalls Islands Companies:

Non-Resident companies are not allowed to carry on any sort of business with individuals or corporate entities residing in Marshall Islands, and the same way to undertake any activity associated with banking or insurance industries.

Setting up a Company in Marshall Islands

Marshall Islands companies and their Tax Liability

Companies incorporated in the Marshall Islands can benefit from a favorable tax regime that includes various tax advantages. Here's a general overview of the tax liability for Marshall Islands companies:

No Corporate Income Tax:

One of the most significant benefits is that Marshall Islands companies are not subject to corporate income tax. This means that the profits earned by the company are not taxed at the corporate level.

No Capital Gains Tax:

Marshall Islands companies are not subject to capital gains tax. This is advantageous for companies that engage in the buying and selling of assets, as they do not need to pay taxes on the gains they make from such transactions.

No Withholding Taxes:

There are no withholding taxes on dividends, interest, or royalties paid by Marshall Islands companies to non-residents. This facilitates international transactions and can be appealing for businesses with global operations.

No Value Added Tax (VAT):

The Marshall Islands does not impose a value-added tax (VAT) or goods and services tax (GST) on the sale of goods and services.

Content supplied by Atrium and Associates

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