Marshall Islands – where is Marshall Islands?
Marshall islands is a tiny island country in the middle of the South Pacific Ocean, north from Nauru and Kiribati, with the Federated States of Micronesia to the west, Wake Island to the north. This tropical paradise consists of 29 coral atolls. By setting apart natural wonders, the territory had an unfortunate fate in the mid 20th century. From 1946 to 1958, it served as territory where US conducted nuclear tests. The country received tens of millions for compensation later on, after the islands signed a Compact of Free Association with the United States in 1986.
Today, Marshall Island shares a much more fortunate destiny and is heading towards happier future. Similar to Nevis this is one the safest and most developed jurisdictions to incorporate a company.
Who should incorporate a company in Marshall Islands?
Let’s start with business activity of the company. Marshall Islands are a perfect jurisdiction for a wide spectrum of business activities. For example, if you intend to register the company that will be the owner of yachts-this is one of the best jurisdictions to do so. Companies willing to start an IPO are welcome too. There are dozens of companies with IPO registered in Marshall Islands that have been able to expand quickly to gigantic markets in Singapore, New York and other. There are hundreds of other business activities that are supported, but with certain limitations. In Marshall Islands, you will not be able to get a banking licence, form a trust or register an insurance or gaming company.
If you wish to carry out third-party trading, act as an investment advisor or other – you are more than welcome!
Why is it worth to consider a remote jurisdiction like Marshal Islands in order to incorporate a company?
- It is important to understand that you will be able to register a company in Marshall Islands and open a bank account in another jurisdiction completely remotely. The bank account can also be opened with a personal visit to one of the banks in Europe, Asia or Latin America.
- Marshall Islands is exempt from all taxes which makes them a popular tax-free jurisdiction. This stands for all 4 most popular company structures: LLC, IBC and General and Limited partnerships.
- Very high level of privacy for beneficial owners: the registry is closed to the public but some information about UBO will remain open. With the smart use of nominee service, the privacy will remain fully protected.
- There are no requirements on reporting. It is however highly recommended to have some basic accounting. This is required by Law. You can face a significant fine in case your company will not be able to provide at least a basic accounting. If you need a help with accountancy for an offshore firm, we are here to help.
- A company registered in Marshall Islands can offer a variety of asset protection tools
- Marshall Islands is an independent country, but it is definitely under USA radar. This can be considered as an advantage as this way it does not have to bear the weight as an “offshore jurisdiction”.
- Procedure of company registration is fast and smooth – and it should not take more than 1-2 working days.
- Legislation makes a Marshall Island company an ideal vehicle for purchase and sale of real estate worldwide, start-ups and IPOs. Our consultants will be able to explain more on why and how.
What business structures exist in Marshall Islands?
In Marshall Islands you can form an LP (Limited Partnership), General Partnership, IBC and LLC
Here is a short resume on all of them:
General Partnership registered in Marshall Islands
- Perfect as a business vehicle that requires flexibility with a strong control over risks, income and losses. These can be distributed between partners with a scheme that appeals to you most.
- Partners are responsible for all the losses of the company. Losses can even be covered from partner’s personal assets
- The minimum partners required to form this structure is two
Limited Partnership registered in Marshall Islands
- Same as General Partnership, Limited partnership gives the similar flexibility in terms of control over risks, incomes and losses.
- Limited partners are protected by limited liability.
- This structure can have either one general partner or a group of limited partners
International Business Company (IBC) incorporated in Marshall Islands
- This structure offers more flexibility with future sale of the company. This is a structure that appears to be a good solution for previously mentioned IPOs
- Director of the company and Secretary are required
- The minimum number of shareholders is one
- An IBC cannot trade or conduct commercial activities inside the Marshall Islands.
- 500 bearer shares are normally issued without par value or per value up to USD 50,000
- The minimum paid up share capital is 1 USD
Limited liability company (LLC) incorporated in Marshall Islands
- Liability of members is limited to their capital investment.
- The minimum number of members is one
- One manager is required and he can be the member at the same time
- Based on a Delaware model of SLLC, Marshall Islands can offer this atypical option too. S before LLC stands for series which offers a formation of different LCs under one main LLC company. This allows one company to have a series of separate companies with different members and managers and all under one roof. Each of these series will operate independently.
Recent changes in the corporate legislation of Marshall Islands
Recent changes took place in 2018 and they concern the information about foreign UBOs of companies registered in Marshall Islands. This is applicable to any business structure.
Although there have not been any special requirements in terms of taxes or public registry opening (which is still very good) the information that has to be provided now is more specific and therefore requires more work.
Companies now need to maintain up-to-date information on the names and addresses of the beneficiaries. For the LLC it is additionally required to obtain and store information about the names and addresses of all managers of the company.
All companies have to store this information and it has to be available upon request of a registered agent or upon a government request.
Starting from November 9, 2018, an annual check will be conducted in order to verify the existing list of directors, beneficiaries, managers, addresses and other relevant information
Fines for not complying with new requirements may result in a fine of up to USD 50,000 or liquidation of the company.
How to register a company in Marshall Islands?
Please contact us at firstname.lastname@example.org
We will provide you with an initial free consultation where we will discuss your business or personal asset protection strategy requirements, ideal structure for your business, number of members and directors and other.
You will then need to present the following documents for all UBOs and directors of the company and these are as follows:
Notarized copies of passports.
Proof of address – utility bill copy with your name. It should not be older than 2 months.
If the director or shareholder is a legal entity, corporate documents will have to be provided (Memorandum and Articles of Association of the company, Certificate of incorporation).