Essential Key Benefits of Incorporating in the Marshall Islands

9 December 2018
Located in the equatorial region of the Pacific Ocean, the Marshall Islands is an island nation, part of the Micronesia cluster. It is fully independent (which it achieved in 1979) but has an “associated state” status with the USA. It’s a popular destination for many business investors due to a large number of benefits for setting up a business within the tiny nation state either as an entrepreneur or for holding purposes. It’s one of the busiest corporate registry in the world; the following explains why you should consider incorporating in this small island nation.

Economic Openness

The Marshall Islands enjoys political stability and a solid foundation for its economic future. Its sound financial and economic infrastructure makes it an attractive destination for a range of business and investment ventures. For this reason alone, it’s already an attractive centre for offshore businesses, particularly in areas such as maritime transportation. In fact, virtually anything is permitted except for some financial industries such as insurance, trusts, investment banking, and online gaming. One major economic benefit for businesses and entrepreneurs looking to trade with the American continent is that The Marshall Islands official currency is the US Dollar. This creates a stable economy and minimises problems inherent in foreign exchange rates elsewhere.

Short and Simple Incorporation

The process of setting up a company in the Marshall Islands is perhaps the shortest and simplest yet. It takes just 2 days and can easily be done through specialist providers of offshore services such as SFM. Typically, any business set up within the island nation will be incorporated as something called an International Business Company, or IBC. Such an establishment requires just one director. This can be anyone, including an already-established company, located anywhere in the world. The IBC is legally required to have a minimum of one shareholder and a company secretary. This secretary may be local or international. As for AGMs, they are legally required but do not have to take place in the Marshall Islands. Also, the minimum share capital required to incorporate a business is just $1 (US).

Tax Benefits

Companies incorporated in the Marshall Islands has a zero-tax policy for corporations established by non-residents and individuals who own them (no income tax payable). With no residency requirement, it’s no surprise that the island nation is an attractive potential centre for those businesses and individuals wanting to conduct business and trade within and across the Pacific Ocean, particularly within the zone of influence of the USA. Over the last few years, the OECD has become much more stringent and demanding with regard to tax compliance. Marshal Islands is fully committed to implementing and adhering to international requirements on tax transparency standards. What’s more, tax standards are simple to understand. LLCs must adhere to the Limited Liability Company Act which complies with Delaware state corporate law. There is no public registry; this means information on the shareholder(s) and director(s) is kept private.

No Hidden Fees

Running a business often comes with hidden or other costs you might not consider alongside the taxes required. These include the costs of regulation and compliance, for example, or associated professional fees linked to industry membership. These do not apply to corporations established in the Marshall Islands as there are no legal requirements to pay such fees. The low cost of doing business is certainly one of the most attractive options where registration in other countries require regulatory compliance for which the corporation or its beneficial owner might otherwise be expected to pay for the cost of compliance.

Business Confidentiality

Not only are LLCs based in the Marshall Islands exempt from taxation (along with any foreign owner registered as the keeper), there is no requirement that the corporate file financial statements. Also, no annual returns are necessary for the business incorporated in the Marshall Islands. This is coupled with a high level of confidentiality regarding financial matters. The Marshall Islands does comply with OECD requirements as explained above, but disclosure to governments of foreign powers is not required due to the standards of privacy and security. Legitimate trade with full accountability and confidentiality makes this an attractive destination for many people looking to incorporate.

Cultural Benefits

90% of the population is native Marshall Island (known as Marshallese) but the influence of the US over its society remains strong. It’s an independent state and the US does not control the country, but the strong economic and cultural links has experienced a strong assimilation. Marshallese people speak the Marshallese language but from an early age, English is taught in schools. The English language is a strong second language with most locals speaking it fluently. Couple this with the US Dollar as the official currency of the Marshall Islands, doing business there in the unlikely event that the owner of a business entity needs to visit, is straightforward culturally.
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