Company Registration Global Registration

How to Proceed for Company Incorporation in the Marshall Islands

The Republic of the Marshall Islands is a part of the whole island group of Micronesia located in the northern Pacific Ocean. A company in the Marshall Islands known as Marshall Islands International Business Company (IBC) is known as a nonresident Domestic Corporation which is the Company’s premier and most popular offshore company formation vehicle. It is highly attractive due to a number of unique advantages. An offshore Marshall Islands Company has an unprecedented array of business possibilities.

A Marshall Islands Company can be taken public and can raise capital and also carry out third party trading. A public entity can be considered as an investment advisor and conduct business in any activity except banking, trust, insurance. A nonresident Domestic Company of Marshall Islands is governed under the Business Corporations Act, which came under the Marshall Islands Associations Law of 1990 in which nonresident Companies were exempt from the local taxes. It is one of the best offshore financial centers because of the combination of both the US and UK elements. The nonresident Companies are not required to file the audited Accounts, annual returns or financial records or any kind of shareholders details keeping the confidentiality element intact. Thus, Marshall Islands becomes the best offshore financial destinations in the Pacific.

What type of Companies can be Incorporated?

Limited Liability Company (LLC):

A Limited Liability Company is a type of Hybrid entity which combines both the advantages of corporations and partnerships. In LLC the liability is on the shareholders of the Company just like in corporations. And is managed on a signed contract. It is formed by creating two documents:

Certificate of formation

Operating Agreement

The members of LLC’s are not required to take part in managing the activities of the company since their liability is limited. An effective LLC provides for excellent opportunities for passive investments in research, technology, capital projects, estate etc.

Corporations:

These entities are easy and convenient in 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 a 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 which 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.

What are the Advantages of the Marshall Islands Company?

The company incorporated in Marshall serves a lot of advantages such as:

• Privacy: there is a high level of Privacy that is provided to the Corporations there is no requirement of disclosure of officer or Director Names on the formation documents. Thus it provides an extra level of privacy.
• Investor friendly: Marshall Islands corporations are above all other states as considered to other business structures. In the case of venture funding or going public, Delaware serves as a smart option.
• Tax Benefits: the Marshall Islands is a no tax Country which has business-friendly tax laws. Businesses formed in the Marshall Islands conduct business there do not pay taxes in corporate income tax.
• No requirement of filing of annual return or audit or financial statements.
• Apart from this, only one director or shareholder is required for the incorporation of a company in the Marshall
• Minimum issued share capital is either one share or no par value or one share par value.

What are the Provisions Regarding taxation in the Marshall Islands?

The nonresident domestic companies are exempt from taxation in the Marshall Islands that 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% and apart from this, there exists no property tax in the Marshall Islands. The companies of the Marshall Islands are not required to file annual returns as well.

What is the Process of Company Incorporation?

The company incorporation in Marshall requires the following steps as:

• Company Name: Two names are required to be submitted which are the suggested names for the proposed Companies. The Company name is approved only when it does not exist or appears in the Companies Registry. The registration of the name is free. The name should be in accordance with the type of the company. It should be kept in mind that the proposed company’s name does not interfere with the intellectual property rights of the third party.
• Type of Director: the person who shall be appointed as the first director should sign the agreement for performing of the function of the Director on the application There is an option to choose between a nominee director and the registered director.
• After the registration applications forms are filed online, an email shall be received from the registrar. The documents such as id proof and registered office details need to be given physically in the Registrar’s office.
• Company documents such as the memorandum and articles of association need to be submitted at the Registrar’s office, the office shall process the documents so sent and proceed further with the registration of the company. It usually takes about 10 working days. The license needs to be renewed every year which shall be reminded via email.

What are the Documents Required for Company Incorporation?

The documents required for the registration of Company are:

• Two suggested names for the company
• Authorised passport or ID copy
• Address Proof (Utility Bill not later than 2 months).

Requirements:

S.no	Marshall Islands Company	Corporate Details
1	Law	IBC or Nonresident Domestic Corporation
2	Type of law	Common Law, including the Association Law 1990 which further includes, the Business Corporations Act, Limited Partnership Act, Limited Liability Company Act, Partnership Act
3	Registered Office in the Marshall Islands	Yes, required
4	Shelf company availability	Yes
5	New company formation time period	3-4 Business DAYS
6	Government fees (Minimum)	450 USD Dollar
7	Corporate Taxation	Not applicable
8	Access to Double Taxation Treaty	No
9	Permitted currency	Any
10	Minimum paid up capital	USD $ 1
11	Bearer shares allowed	Yes
12	Minimum number of Directors	One
13	Local directors availability	Not required
14	Records publically accessible	no
15	Location of meetings	Anywhere
16	Minimum number of shareholders required	One
17	Company Secretary	required mandatorily
18	Audit Requirements	No
19	The requirement to maintain a file of accounts	No
20	Public Assess ability to accounts	No
21	The requirement of Annual Return	No

Conclusion

The Marshall Islands is a democratic and independent state which has had no legal reform from past. The foundation of the legal system in the Marshall Islands is partially derived from the Delaware state, which ensures that there are flexibility and an effective legal infrastructure towards the business community making it suitable for the investors to invest offshore. There is a freedom of operation that is given to the foreign investments which create a unique and friendly business environment to work in the Marshall Islands. Moreover, the Government’s friendly attitude towards foreign investments, Bank’s secrecy, well-developed technology helps in the overseas business ventures from Marshall.