Company Formation in the Marshall Islands
Service Name
Start
Pro
Elite
Company Name Check and Reservation
Company Formation including Government Fees
Company Secretarial Services for the First Year
Incorporation Documents Package
Registered Office Address for 1 Year
Nominee Services for 1 Year
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Corporate Bank Account Opening
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–
Total Cost
€1350
€2250
€2850
A Comprehensive Guide to Company Formation in the Marshall Islands
The Republic of the Marshall Islands (RMI) has become a top choice for international businesses, entrepreneurs, and investors looking for a secure, confidential, and tax-efficient environment. Its modern, U.S.-style corporate laws, coupled with a fast and straightforward registration process, make it an appealing alternative to more well-known offshore financial centers.
This detailed guide will walk you through the key advantages, popular company types, the step-by-step formation process, and the ongoing requirements for a Marshall Islands company.
Why the Marshall Islands is an Excellent Choice
The RMI’s popularity stems from a powerful combination of legal integrity, political stability, and a business-friendly legal framework. Here are the primary reasons clients choose this jurisdiction:
Zero Tax on International Income: The most significant benefit is the complete absence of local taxes on income, capital gains, withholding, and stamp duty for Non-Resident Domestic Corporations (NRDCs). This makes the RMI an ideal location for international holding companies, asset protection, and global trading.
Supreme Confidentiality: The RMI’s privacy laws are a major draw. The names of directors, shareholders, and beneficial owners are not publicly filed or accessible on any government registry. This information is held by the company’s Registered Agent and is only disclosed under strict legal and regulatory circumstances, such as a court order.
Political and Economic Stability: The RMI has a long history of political stability and a government that respects private enterprise. Its legal system is based on U.S. common law, which provides a familiar and predictable framework for business operations and legal disputes.
Legal Flexibility: The Marshall Islands Business Corporations Act (BCA) is a highly flexible piece of legislation. It allows for a single person to act as the sole director, shareholder, and officer, and there are no requirements for a minimum share capital. This flexibility makes it easy to structure a company to meet specific business needs.
Swift and Easy Formation: The entire incorporation process is designed for efficiency. With the help of a professional Registered Agent, a company can often be officially incorporated within a single business day. This speed is a crucial advantage for time-sensitive ventures.
The Most Popular Entity: The Non-Resident Domestic Corporation (NRDC)
For most international business activities, the Non-Resident Domestic Corporation (NRDC) is the preferred and most common choice. This entity is similar to an International Business Company (IBC) in other jurisdictions. As a separate legal entity, it offers limited liability protection to its owners.
Key features of the NRDC include:
Exemption from Local Taxes: It’s explicitly designed for operations conducted outside of the RMI and is fully exempt from local taxes.
Simple Structure: A single individual can serve as the sole director, shareholder, and officer.
No Local Presence: There’s no requirement for the company to have a physical office, local director, or employees in the Marshall Islands. The only mandatory local presence is a Registered Agent to handle administrative duties.
No Minimum Capital: You don’t need to put up any minimum amount of capital to form the company.
Streamlined Reporting: Unlike many jurisdictions, there are no legal requirements to file annual financial statements, tax returns, or hold annual general meetings.
While the NRDC is the most popular, the RMI also offers the Limited Liability Company (LLC), which provides a flexible structure often used for joint ventures and investment funds, combining the limited liability of a corporation with the operational freedom of a partnership.
The Formation Process: Your Step-by-Step Guide
Forming a company in the RMI is a highly streamlined process that must be completed through a licensed Registered Agent. Here’s what the journey looks like:
Select Your Registered Agent: This is the most critical first step. The Registered Agent is your mandatory legal representative in the Marshall Islands. They will manage the entire formation process and serve as the official point of contact with the government.
Choose a Company Name: Select a unique company name. It can end with a variety of suffixes, such as “Limited,” “Corporation,” “Incorporated,” “LLC,” or their common abbreviations (Ltd., Corp., Inc.).
Provide Required Documentation: To comply with international anti-money laundering (AML) and know-your-customer (KYC) regulations, the Registered Agent will require due diligence documents for all beneficial owners, directors, and officers. This typically includes a notarized copy of a passport and a recent proof of address (e.g., a utility bill).
Prepare and File the Articles of Incorporation: Your Registered Agent will draft the Articles of Incorporation—the foundational document that legally brings the company into existence. They will then file it with the Registrar of Corporations.
Receive Your Corporate Documents: Once the company is officially incorporated, the Registered Agent will provide you with a corporate kit. This includes the Certificate of Incorporation, the Memorandum and Articles of Association (M&A), share certificates, and other important company records. You can now proceed to open a corporate bank account.
Ongoing Compliance and Maintenance
The RMI is often compared to other popular jurisdictions like the British Virgin Islands (BVI) and the Cayman Islands. While all three offer similar benefits like tax neutrality and confidentiality, the RMI has carved out a unique space. Its U.S.-based legal system can be particularly appealing to clients with a business focus in North America. Furthermore, its fee structure is often more competitive, making it a cost-effective and highly efficient option for a wide range of global business activities, from holding assets and managing investments to international trading and e-commerce.
In conclusion, the Marshall Islands offers a robust and reliable platform for international business. Its non-resident corporate structure, combined with a fast and confidential incorporation process, provides a powerful and practical tool for global entrepreneurs.
The Legal Framework: A Closer Look at the BCA
The Marshall Islands Business Corporations Act (BCA) is the cornerstone of the jurisdiction’s success. As mentioned, it’s based on Delaware corporate law, which is widely recognized and respected globally. This familiarity provides a level of comfort and predictability for international lawyers and business people.
Key provisions of the BCA that offer significant advantages include:
Broad Corporate Powers: The BCA grants companies wide-ranging powers, allowing them to engage in virtually any lawful activity without a detailed description in the Articles of Incorporation. This flexibility is ideal for dynamic businesses that may pivot or expand their activities.
Share Structure Flexibility: The law allows for a variety of share classes, including registered, bearer, and no-par value shares. This enables complex corporate structuring for venture capital, private equity, and joint ventures. While bearer shares are legally permitted, most professional agents will only issue them in registered form to comply with international anti-money laundering regulations.
No Requirement for Annual Meetings: Unlike many jurisdictions, the BCA does not mandate an annual general meeting of shareholders or directors. This simplifies corporate governance and reduces administrative burdens, especially for single-owner or small companies. Meetings can be held anywhere in the world, and resolutions can be passed by written consent.
Ease of Re-domiciliation: A company can easily be “re-domiciled” to the Marshall Islands from another jurisdiction, and vice-versa. This is particularly useful for businesses looking to change their corporate home without dissolving and re-forming their entity
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Understanding the Due Diligence and KYC Process
While the Marshall Islands is known for its privacy, it’s important to understand that this does not mean anonymity. The jurisdiction is committed to international standards for combating money laundering and the financing of terrorism. Therefore, the Know-Your-Customer (KYC) and due diligence process is a mandatory and critical step.
Your Registered Agent is the entity responsible for this process. They act as the gatekeeper and are legally required to verify the identity of the beneficial owners, directors, and officers of the company.
The typical due diligence package includes:
Passport Copy: A certified copy of a valid passport for all individuals involved. Certification can be done by a notary public, a lawyer, or a sworn translator.
Proof of Address: A recent utility bill (not older than three months) or a bank statement showing the individual’s full name and residential address.
Bank Reference Letter: A letter from a recognized bank confirming the individual has been a client in good standing for a certain period.
Professional Reference: A letter from an accountant or a lawyer who can attest to the individual’s good character.
This information is kept confidential by the Registered Agent and is not filed with the government. It is only accessible to law enforcement or regulatory authorities under a valid court order or official request, ensuring a balance between privacy and regulatory compliance.
Opening a Corporate Bank Account
Forming a company is only the first step; the next is getting it operational, and a corporate bank account is essential for that. While a Marshall Islands company can open a bank account anywhere in the world, most international banks will require a certified set of corporate documents from the Registered Agent.
The banking process can be more time-consuming than the company formation itself due to stringent bank-specific due diligence requirements. Banks will often require:
Certified Corporate Documents: The Certificate of Incorporation, Memorandum & Articles of Association, and minutes appointing the directors.
KYC Documents: Full due diligence package for all directors, shareholders, and beneficial owners.
Detailed Business Plan: A clear description of the company’s business activities, source of funds, and the expected transaction flow.
Proof of Corporate Identity: Some banks may ask for an apostille or legalization of the corporate documents to confirm their authenticity.
Navigating this process can be challenging, but an experienced Registered Agent can help you prepare the necessary documents and often has relationships with international banks that are familiar with Marshall Islands companies.
The Marshall Islands Limited Liability Company (LLC)
While the NRDC is the workhorse for most international business, the Marshall Islands LLC offers a valuable alternative for certain structures. An LLC combines the limited liability of a corporation with the flexibility and pass-through taxation of a partnership.
Key features of the RMI LLC include:
Contractual Freedom: The internal governance of the LLC is governed by a flexible Operating Agreement, not by a rigid statute like the BCA. This allows members (owners) to define their own rules regarding management, profit distribution, and member duties.
No Directors or Shareholders: An LLC is managed by its members or by appointed managers. This structure can be simpler for multi-member ventures.
Pass-Through Taxation: For U.S. tax purposes, an RMI LLC can be treated as a partnership, meaning profits “pass through” to the members and are taxed at the personal level, avoiding double taxation.
The choice between an NRDC and an LLC depends entirely on the intended business purpose, the tax residency of the owners, and the desired level of structural flexibility. Your professional corporate service provider can help you determine the best fit for your specific needs.
FAQ
The primary benefit is tax neutrality. Marshall Islands companies that conduct business outside of the RMI are exempt from all local taxes, including income tax, corporate tax, capital gains tax, and stamp duty. This makes it a highly efficient jurisdiction for international business and asset holding.
The most popular entity is the Non-Resident Domestic Corporation (NRDC). It is similar to an International Business Company (IBC) in other jurisdictions and is specifically designed for international business activities. The RMI also offers the Limited Liability Company (LLC), which is popular for joint ventures and investment funds due to its flexible management structure.
No, there is no minimum share capital requirement to form a Marshall Islands company. This provides significant flexibility for entrepreneurs and small businesses, as they do not need to lock up capital during the formation process.
No, you do not need to be a resident. The company’s director, shareholder, and beneficial owner can be a person or a company from any country. The only local requirement is to appoint a Registered Agent and maintain a registered office in the Marshall Islands.
A Registered Agent is a licensed, local service provider appointed to act as the official point of contact for the company within the Marshall Islands. They are legally required to manage all government and legal correspondence and ensure the company remains in good standing.
The formation process is very fast. With a professional Registered Agent, a company can typically be incorporated within 24 to 48 hours after all the necessary due diligence documents have been received and verified.
No. The Marshall Islands offers a high degree of privacy. The names of directors, shareholders, and beneficial owners are not publicly filed or accessible on any government registry. This information is held confidentially by the Registered Agent.
To maintain a company in good standing, you must:
Pay the annual government corporate fee.
Maintain a Registered Agent and registered office in the Marshall Islands.
Keep the company’s statutory records (e.g., Register of Directors) up-to-date with your Registered Agent.
No. Marshall Islands companies are not required to file annual financial statements, tax returns, or undergo an audit. This significantly reduces the administrative and compliance burden for the business owner.
Yes. A Marshall Islands company can open a corporate bank account with local or international banks anywhere in the world. The bank will conduct its own due diligence, and you will need to provide them with certified corporate documents and KYC information for all key individuals. Your Registered Agent can assist with this process.
Yes. The Marshall Islands has a strong reputation and is a well-regulated jurisdiction that complies with international standards for anti-money laundering (AML) and counter-terrorism financing (CTF). It is a member of the OECD's Global Forum on Transparency and Exchange of Information for Tax Purposes and is not on any major international blacklists.
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