Offshore Company in the Marshall Islands
In the text below, we provide general corporate information about the Marshall Islands and discuss the process of company formation in the jurisdiction.
Legal system
The legal system in the Marshall Islands combines elements of American and English common law, customary law, as well as local statutes. The main law governing the activities of offshore companies is the Business Corporations Act.
Organizational and legal forms of offshore companies in the Marshall Islands
The legislation of the Marshall Islands allows for the creation of the following organizational and legal forms:
- International Business Corporation (IBC)
- General Partnership
- Limited Partnership
- Limited Liability Company
- Foreign Maritime Entity
For offshore purposes, the most popular and widely used form is the International Business Corporation (IBC).
Registration of IBC
You have to meet several requirements when forming a company in the Marshall Islands.
Name of the offshore company
You can choose the name for your offshore structure in any language, but it must use the Latin alphabet. Any internationally recognized abbreviation for the legal form is acceptable. To check if your desired name is available, get in touch with one of the Registry Office offices via phone, fax, or email. You can reserve the name for free for up to six months before the actual company registration. If your chosen name isn’t available, you’ll need to provide two alternative options. The name must not duplicate an existing company. Avoid using prohibited words like bank, foundation, chartered, partnership, establishment, as well as terms indicating affiliation with a government agency, church, charity, insurance, trust, airline, aviation, loan, fund, or brokerage.
Procedure for registering an offshore company in the Marshall Islands
- Name availability check (conducted by the Registry Office).
- Notarization of founding documents (done at the Office of the Attorney General).
- Registration of the offshore company at the Registry Office includes submitting the following documents:
- Articles of Incorporation, which include information about the company name, duration, purpose, registered office address, names of directors, number of shares, and more;
- A copy of the bylaws;
- A copy of the payment receipt for the registration fee.
Obtaining an Employer Identification Number from the Marshall Islands Social Security Administration also serves as the company’s tax number.
Confidentiality of information
The name of the offshore company, its duration, amendments, and other documents submitted to the public registry are kept in open access. However, according to the laws of the Marshall Islands, confidentiality means that the names of officers, directors, and shareholders do not have to be disclosed and remain unavailable for public viewing.
Registered office and registered agent
Each offshore company in the Marshall Islands must have a local registered office. Only one company, The Trust Company of the Marshall Islands, Inc., can act as the agent for non-resident companies. A foreign company without a local provider may be dissolved. Its right to conduct business can also be revoked, or its registration canceled.
Seal
There are no mandatory requirements for offshore companies in the Marshall Islands to have a seal.
Re-domiciliation
Re-domiciliation of companies to and from the Marshall Islands is allowed. Re-domiciliation to the Marshall Islands is free of charge. If a company is re-domiciled, its date of incorporation remains unchanged.
Structure of an offshore company in the Marshall Islands
Director
An offshore company in the Marshall Islands must have at least one director, who can be either an individual or a legal entity, and can be a resident or non-resident. Board meetings can take place anywhere, whether within or outside the Marshall Islands, unless the bylaws or regulations state otherwise. It’s important to note that the local registered agent does not provide nominee director services.
Secretary
Every IBC in the Marshall Islands is required to appoint a secretary. The company secretary can be an individual or a legal entity. The secretary can be of any nationality and residency.
Shareholders
An offshore company in the Marshall Islands must have at least one shareholder. A shareholder can be either an individual or a legal entity, and can be a resident or non-resident of the Marshall Islands. The annual meeting of shareholders can be held anywhere, including both within and outside the Marshall Islands. It’s crucial to emphasize that shareholder information is confidential: it’s not disclosed to the local agent and does not appear in the public registry.
Beneficiary
A recent requirement in the Marshall Islands mandates offshore companies to maintain a register of their beneficiaries. It’s worth noting that this information remains internal and is not accessible to the public. Each offshore company keeps its register in its office, and only government authorities of the Marshall Islands can access this data upon submitting the appropriate requests, along with the registering agent.
Authorized capital and shares
IBC companies in the Marshall Islands have no minimum capital requirements. Typically, a standard authorized capital of 500 shares with no par value or capital of $50,000 is established. Capital exceeding this amount is subject to taxation. It’s important to mention that this capital can be expressed in any currency. The minimum number of issued shares is one share, either without par value or with par value. Also, bearer shares are permitted in such companies.
Advantages of registering an offshore company in the Marshall Islands
Opening a company in the Marshall Islands can provide several advantages typical for many offshore jurisdictions. However, it’s important to note that these benefits may vary based on specific business needs and investor goals. Here are some common advantages:
- Tax benefits: The Marshall Islands offer favorable tax legislation. Offshore companies can be exempt from corporate tax, income tax, and enjoy tax deductions.
- Confidentiality: Owners of offshore companies in the Marshall Islands can often maintain anonymity. Information about owners, directors, and shareholders can remain confidential.
- Simplicity of registration and management: The registration and management procedure for offshore companies in the Marshall Islands is generally quite simple and efficient.
- No currency restrictions: The Marshall Islands are known for having no currency restrictions, which can be important for those conducting international financial operations.
- Absence of tax treaties: The lack of tax treaties with other countries can provide a higher level of confidentiality and flexibility in tax planning.
- Flexibility in activities: An offshore company can engage in various activities without strict limitations.
- No financial reporting requirements: Some offshore jurisdictions, including the Marshall Islands, may not impose strict requirements for financial reporting and auditing.
- Geographical location: The geographical location of the islands can be strategically advantageous for businesses conducting international operations.
It’s crucial to conduct thorough research before deciding to open an offshore company, considering the specific features of the jurisdiction, registration requirements, laws, and regulations. Consulting with professional advisors on offshore jurisdictions and taxes is also advisable.