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The Marshall Islands Business Corporations Act in 2023: The Ultimate Guide

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This article discusses the Marshall Islands Business Corporations Act and how it can benefit you. It will also help you decide whether Marshall Islands company formation suits your needs.

The offshore jurisdiction of the Marshall Islands is world-renowned for its low tax rates and ease of company formation. The country has detailed legislation in place to regulate corporate structures. The regulations, low tax rates, and additional incentives have made the Marshall Islands a popular choice among investors and entrepreneurs for decades.

Is Marshall Islands’ climate what you’re looking for in terms of corporate growth? At Nomad Capitalist, we’ve helped over two thousand investors and entrepreneurs go where they’re treated best through our holistic approach. Reach out to us so we can do the same for you.

Marshall Islands Country Overview

Over 1,200 islands make up the Marshalls in the central Pacific Ocean. The Republic of the Marshall Islands is Micronesia at its most easterly and counts the likes of Kiribati, Nauru, and Wake Island as neighbors. Its capital is Majuro, and the estimated population of the Marshalls in 2023 is 60,303.

Learn about Marshall Islands company registration

Marshall Islands – Climate

The climate in the Marshall Islands is tropical.

There is an average temperature of 82 °F (28 °C) across the Marshalls. Although there is a rainy season from October to November, some northern Marshall Islands remain uninhabited because of insufficient rainfall.

Could your next offshore company be a company in the Marshall Islands?

Marshall Islands – Economy

The Marshall Islands government sources most of its revenue from U.S. subsidies.

Farming and fishing are traditional industries on the Marshalls. The Marshall Islands’ economy is expected to boost as the US looks set to strengthen ties because of concerns about Chinese interest in the region. But the economy will also be affected by native tuna migrating to cooler waters due to climate change.

The Trust Company of the Marshall Islands serves as the registrar and registered agent for non-resident companies

Benefits of Setting up a Company in the Marshall Islands

The following are the benefits of setting up a company in the Marshall Islands:

  • There are no minimum capital requirements for Marshall Islands company formation.
  • After you incorporate into the Marshalls, annual financial statements and tax returns are not required to be submitted to the Marshall Islands government. However, the company must keep financial records to demonstrate its financial position.
  • A resident company’s income is taxed at progressive rates – $80 for the first $10,000 and 3% for income over $10,000.
  • Non-resident companies not conducting business in the Marshall Islands are exempt from all taxes. There is zero tax on income, profits, dividends, royalties, compensation, or other relevant sources of revenue.

These benefits may look great on paper, but the lack of reporting and the low tax rates has gotten the Marshall Islands into the EU list of non-cooperative jurisdictions for tax purposes – aka, they’re considered a tax haven.

Operating in a tax haven, you may find your banking options to be quite narrow, and even the banks that open a bank account for you won’t do it without a lengthy and complicated due diligence process.

Whether you want a company in the Marshall Islands or another tax-friendly jurisdiction without the label of a tax haven, we can help you with it. All you have to do is contact us, and we’ll take care of the rest.

Benefits of Setting up a Company in the Marshall Islands

The Marshall Islands Company Formation Requirements

The 1990 Business Corporations Act “applies to every resident and non-resident domestic corporation and to every foreign corporation authorized to do business or doing business in the Republic.”

While filing articles of incorporation, you must ensure they are “signed and acknowledged by each incorporator and filed with a Registrar or Deputy Registrar of Corporations.”

Regarding the board, “the number of directors constituting the board of directors shall be one (1) or more”.

You will need to prove tax residency in another jurisdiction for your business entity to be exempt from local taxes

Marshall Islands Company Formation Conclusion

Most foreigners who opt for Marshall Islands company registration set up an International Business Company (IBC). However, the offshore company’s activities must be managed on the Marshall Islands, and the board meetings must be held regularly there.

Go Where You’re Treated Best

The Marshall Islands boast a business-friendly environment with low tax rates and minimal reporting requirements. However, those very features tend to get jurisdictions into hot water with the OECD and the EU, which in turn can be problematic for investors and entrepreneurs operating in the jurisdiction.

With proper planning and a holistic approach, we can tell you whether a country would work in your favor or cause unnecessary complications further down the road.

If a hassle-free company formation in a low-tax jurisdiction is what you want, we’ll find the best option for you. Reach out to us and let us handle the process.

Marshall Islands Company Formation FAQ

Are Bearer Shares Allowed in the Marshall Islands?

Republic of the Marshall Islands laws allows bearer shares. Regarding registered shares, the Marshall Islands does not maintain a registry of shareholders.

Why is the Business Corporations Act of the Marshall Islands Important?

It exempts all non-resident companies from having to pay any local taxes.

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