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Marshall Islands

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Non-Resident Domestic Corporation (Company limited by shares)

The Republic of the Marshall Islands (RMI) offers a distinct legal framework for incorporating non-resident domestic business corporations, commonly used as international business vehicles. These entities are governed primarily by the Marshall Islands Business Corporations Act (BCA) and are designed for use outside the territory of the Marshall Islands. As such, they provide a high degree of operational flexibility, subject to certain regulatory boundaries.

Non-resident domestic corporations (NDCs) are legal entities incorporated under the BCA, distinct from Limited Liability Companies (LLCs), which are formed under the Limited Liability Company Act. While both structures offer limited liability, corporations operate through a shareholder and director framework, whereas LLCs follow a member-based structure.

NDCs may conduct any lawful business activity, with two principal exceptions:

  • Gaming or gambling operations, including online gaming
  • Regulated financial services, such as banking, insurance, virtual asset, or fiduciary/trust services

Additionally, NDCs are restricted from conducting business within the territory of the Marshall Islands or with its residents, whether individuals or entities. However, they are permitted to engage with professionals located in the jurisdiction—such as lawyers, accountants, or company service providers—when such engagement is for legal, administrative, or compliance-related purposes.

The process of incorporating an NDC in the Marshall Islands is relatively straightforward. The corporation is formed by submitting Articles of Incorporation to the Registrar of Corporations. These articles set out essential details such as the company name, authorized share capital, and the nature of the business.

Once incorporated, the company’s internal governance is determined by its bylaws, which outline the rules governing the conduct of meetings, decision-making procedures, share issuance, and other operational matters.

Key structural features include:

  • Minimum of one director and one shareholder, who may be the same person
  • Shareholders and directors can be natural persons or legal entities, and there are no residency requirements
  • No minimum share capital is mandated by law; companies must simply issue at least one share, which can be of any class, par value, or price
  • Shares may be denominated in any currency and structured with differing voting and economic rights, subject to the company’s governing documents

The Board of Directors is responsible for managing the corporation’s affairs, including entering into contracts, maintaining corporate records, and executing the company’s business strategy. Directors are elected by the shareholders and may be granted broad authority under the bylaws.

Shareholders, as owners of the company’s equity, typically hold voting rights based on the number and type of shares they possess. They retain the power to appoint or remove directors, approve major corporate actions, and adopt or amend bylaws.

There is no requirement for companies to hold meetings in the Marshall Islands, nor is there a mandate for meetings to be held at all if the governing documents allow for written resolutions or electronic participation.

Non-resident domestic corporations that do not conduct business within the Marshall Islands are exempt from all forms of local taxation, including:

  • Corporate income tax
  • Capital gains tax
  • Withholding tax
  • Sales tax or VAT

This exemption applies provided that the entity does not derive income from local sources and adheres to the non-residency status requirements defined under Marshall Islands law.

In line with this exemption, NDCs are not required to file annual tax returns or submit financial statements to the Marshall Islands authorities. Nor is there an obligation to prepare or file an annual report with the Registrar. This regulatory environment reduces administrative burden and enhances operational efficiency for international users.

However, in response to international tax compliance standards—particularly those set by the OECD’s Base Erosion and Profit Shifting (BEPS) initiative and EU substance rules—the Marshall Islands has implemented economic substance regulations.

All NDCs are required to:

Submit an annual economic substance notification, regardless of their business activities

If engaged in a relevant activity (e.g., shipping, fund management, distribution and service. center, headquarters services, or pure equity holding company operations), submit an economic substance return, including details of employees, expenditures, and the nature of the business

While there is no requirement to file financial statements with any government body in the Marshall Islands, all corporations must maintain adequate accounting records. 

Accounting records may include ledgers, contracts, invoices, receipts, bank statements, and any other relevant documentation. These records must be retained for at least five years from the date of the relevant transaction.

Companies are permitted to store records outside the Marshall Islands.

Every NDC must appoint a registered agent and maintain a registered office address in the Marshall Islands. The registered agent is responsible for receiving legal notices and ensuring compliance with local regulations, including government filings and fees.

Annual government fees are payable to maintain the corporation’s good standing. These fees cover the ongoing registration of the entity and are typically processed through the registered agent.

Due to their structural flexibility and favorable tax status, Marshall Islands non-resident corporations are frequently used in a variety of international business contexts, including:

  • Holding companies for movable assets
  • Maritime and shipping operations, particularly for owning and managing vessels
  • International trading and consulting services
  • Private investment vehicles
  • Asset protection and succession planning

The jurisdiction’s long-standing affiliation with maritime commerce also makes it a popular choice for registering ship-owning entities under the Marshall Islands International Ship Registry, one of the largest open registries globally.

Marshall Islands Non-Resident Corporations provide a streamlined and internationally compliant structure for conducting business activities outside of the jurisdiction. With minimal regulatory overhead, no local taxation, and a clear legal framework, they are well-suited for a broad range of non-domestic commercial applications. While the regulatory environment remains business-friendly, it is equally aligned with global standards on transparency, substance, and financial accountability, ensuring long-term viability for international business operators.

Taxes

Corporate income tax – Non-resident companies incorporated in Marshall Islands are not subject to corporate income tax. All trading income, investment income, capital gains, compensations, rents and royalties, as well as sales of goods or supplies of services are exempted from taxation.

Other taxes – There is no Marshall Islands wages and salaries tax or social security contributions liability for non-resident domestic companies and their employees.

There are no property, wealth and inheritance taxes in Marshall Islands.

  • Offshore Income Tax Exemption
  • Offshore capital gains tax exemption
  • Offshore dividends tax exemption
  • CFC Rules
  • Thin Capitalisation Rules
  • Patent Box
  • Tax Incentives & Credits
  • Property Tax
  • Wealth tax
  • Estate inheritance tax
  • Transfer tax
  • Capital duties
  • 0% Offshore Income Tax Rate
  • - Corporate Tax Rate
  • 0% Capital Gains Tax Rate
  • 0% Dividends Received
  • 0% Dividends Withholding Tax Rate
  • 0% Interests Withholding Tax Rate
  • 0% Royalties Withholding Tax Rate
  • 0 Losses carryback (years)
  • 0 Losses carryforward (years)
  • 12% Personal Income Tax Rate
  • 14 Tax Treaties

Country details

Marshall Islands
USD
Majuro
Oceania
mh, en-MH
65,859

The Republic of the Marshall Islands is an island state located in the Pacific Ocean, in the Micronesia region. The country spreads over 29 atolls of coral, comprising 1,156 islands and islets.

The islands share maritime borders with the Federated States of Micronesia to the west, Wake Island to the north, Kiribati to the southeast and Nauru to the south. The population of the country is about 50,000 people. The capital and the most populated city is Majuro, with about 28,000 inhabitants.

After being under the mandate of the Spanish, the German, the English, the Japanese and being part of the UN’s Trust Territory of the Pacific Islands and under the administration of the United States, the nation gained its independence in 1990 and is one of the youngest states in Oceania.

Its official languages are English and Marshallese. Its official currency is the United States Dollar (USD).

The Marshall Islands government operates under a mixed parliamentary-presidential. Elections are convened every four years under universal suffrage (for all citizens over the age of 18).

Natural resources on the mainland include phosphate deposits as well as copra harvesting. Agricultural production is concentrated in small farms and the most important commercial crops are coconuts, tomatoes, melons, and the bread tree. There is small but intensive agriculture of copra, coconut, sweet potato and banana.

Livestock is restricted (due to the small extent) to the breeding of pigs, poultry, to a lesser extent cattle and goats. Obviously, fishing is very important although the seas are warm and not very prolific.

The industry is mainly that of copra, coconut oil, frozen fish for export, handicrafts. The aid of the United States government is the main pillar of the economy. The small-scale industry is limited to handicrafts, the processing of fish and copra.

Tourism has been emerging in recent years as a major source of income for the islands. The islands have few natural resources and imports far outnumber exports. Despite the relative scarcity of natural resources in their lands, the Marshall Islands have jurisdictional waters that are not well exploited due to the scarcity of capital.

The issue of postage stamps, mainly for philatelic collecting, is also an important source of income for its economy.

In recent years the country has developed a prolific wholesale and retail trade sector in the major urban areas, as well as a growing financial sector including banking and insurance services.

Tax treaties

Country Type Date Signed
Faroe Islands TIEA 2010-09-28
Iceland TIEA 2010-09-28
Greenland TIEA 2010-09-28
Netherlands TIEA 2010-05-14
Norway TIEA 2010-09-28
New Zealand TIEA 2010-08-04
Korea, Republic of TIEA 2011-05-31
Australia TIEA 2010-05-12
United States TIEA 1991-03-14
Finland TIEA 2010-09-28
United Kingdom TIEA 2012-03-20
Sweden TIEA 2010-09-28
Ireland TIEA 2010-09-02
Denmark TIEA 2010-09-28

Tax treaties Map

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Services

We can help you incorporate a Non-Resident Domestic Business Corporation in Marshall Islands for $2,150.


Click here to incorporate your Marshall Islands NRDC.

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