Non-Resident Domestic Corporation (Company limited by shares)
A Marshall Islands Non-resident domestic company is a very flexible and tax-free vehicle, with just a few restrictions on the business that the company can carry out. It can engage any legal business activity, except gaming and financial services such as banking, insurance, and trust.
Non-resident domestic companies are also restricted from doing business with Marshall Islands residents or companies but may maintain professional contact with solicitors, barristers, accountants, bookkeepers, trust companies, management or secretarial companies, investment advisors, or other similar persons or entities carrying on business within the Marshall Islands.
This type of offshores corporations are exempt from all form of local taxes.
Marshall Island non-resident domestic entities may be incorporated by a sole shareholder, who can be either an individual or a corporation and may be managed by a sole director who can be the same person as the shareholder. There are no minimum capital requirements and shares may be issued in any form.
Members of a Non-resident domestic entity may elect to not disclose their details in a public register.
In addition, Non-resident domestic entities face no reporting requirements. No audited accounts or annual returns are required to be provided to the Government.
The Republic of the Marshall Islands passed in late 2018 the Associations Law (Amendment) Act, 2018 which amends and introduces certain provisions to the Business Corporation Act, the Revised Partnership Act, the Limited Partnership Act, and the Limited Liability Company Act.
The Associations Law (Amendment) has introduced a requirement to non-resident domestic entities (offshore companies) that provide financial services which would be regulated under the Banking Act (financial services providers) if the activities were carried out within the Marshall Islands – to be regulated by the relevant authority and fulfill licensing requirements of the jurisdiction in which the Marshall Islands company is carrying out activities.
In addition, it grants the power to the Registrar of Corporations to implement economic substance requirements and certain reporting requirements for offshore companies. We can expect further economic substance regulations to be enacted shortly, in line with those of other offshore jurisdictions.
The Marshall Islands has implemented the OECD’s automatic exchange of information for tax purposes (AEoI).
A Marshall Islands’ non-resident domestic company may raise capital offering its shares to the public, carry out third-party trading and act as an investment advisor.
Furthermore, the Marshall Islands’ offshore companies are usually used as a holding structure for owning movable and immovable assets and for conducting Forex brokerage activities.
Country code – MH
Legal Basis – Common law
Legal framework – Business Corporations Act (Marshall Islands Associations Law of 1990)
Company form – Non-Resident Domestic Corporation (Company limited by shares)
Liability - The liability of the shareholders for the company is limited to the amount of their respective shareholdings.
Business restrictions – A non-resident company is restricted from doing business with Marshall Islands residents or companies but may maintain professional contact with solicitors, barristers, accountants, bookkeepers, trust companies, management or secretarial companies, investment advisors, or other similar persons or entities carrying on business within the Marshall Islands.
Share capital – There is no minimum share capital established, and this can be denominated in any currency or in more than one currency. The minimum paid in and issued capital may be one share
Non-resident companies may have registered shares, bearer shares, preference shares, and redeemable shares, shares with or without par value and shares with or without voting rights. Shares may be paid up in cash or through the transfer of other assets. The standard formation is 500 shares without par value or up to US$50,000 worth of par value stock.
Shareholders – Non-resident companies may be incorporated by one or more shareholders, who can be either natural or legal persons, residents or non-residents, without limitations. Shareholders may elect to not publicly disclose their details.
Directors – A private limited company must appoint at least 1 director, who may be a natural or legal person, resident or non-resident, without restrictions. A company may elect to not publicly disclose personal details of directors.
Secretary – A company secretary is required but may be non-resident, and he or she may be the Director.
Registered Address – A company shall have a registered address in Marshall Islands, provided by a licensed service provider.
General Meeting – Annual general meetings of shareholders are mandatory but can be held anywhere. Meetings can be held by telephone or other electronic means; alternatively, shareholders may vote by proxy.
Electronic Signature – Permitted.
Re-domiciliation – Inward and outward re-domiciliation is allowed.
Compliance – Non-resident companies should maintain accounting records, as well as the supporting documentation, and may be held anywhere in the world.
It is not required to file an annual return, financial statements or tax return with the Marshall Islands authorities.
- Shareholders not disclosed
- Directors not disclosed
- Corporate shareholders permitted
- Corporate directors permitted
- Local director required
- Secretary required
- Local secretary required
- Annual general meetings required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Common law Legal basis
- 1 Minimum shareholders
- 1 Minimum directors
- USD 1 Minimum issued capital
- - Minimum paid up capital
- USDAny Capital currency
- Anywhere Location of annual general meeting
- 2018 AEOI
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
- 0% 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
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 Map
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