Company Incorporation in the Marshall Islands

The RMI Associations Law gathers four statutes into one volume: the Business Corporations Act, the Limited Liability Company Act, the Limited Partnership Act, and the Revised Partnership Act. The most common vehicle is the non-resident domestic corporation formed under the Business Corporations Act — marketed as an International Business Corporation. The Limited Liability Company is the other main option, including the Series LLC, which is one LLC containing separate series that each hold their own assets and are insulated from the liabilities of the other units. Limited and general partnerships are also available. Whichever you choose, formed as a non-resident it is statutorily exempt from RMI tax.

No, it is not mandatory to appoint local directors or shareholders when establishing your offshore company in the Marshall Islands. While a company must have at least one director, you can serve as the director regardless of your nationality, place of origin, or residence. Note that the RMI registered agent does not itself provide nominee directors; if you want one, it comes through Vepapu’s nominee director and nominee shareholder services, which keep your identity out of the company formation documents.

Yes, but with a condition that materially changes what they do. Shares may be issued in registered and/or bearer form, however the holders and the beneficial owners of bearer shares must be recorded with the registered agent in the RMI, using a Declaration of Holders and Beneficial Owners of Bearer Shares and, for any later transfer, a Declaration of Transfer. The validity of the shares and every right and privilege attaching to them is conditional on that recordation. Bearer shares that are not properly recorded become invalid and the corporation must cancel the certificates. So a bearer share here is not an anonymous instrument — it is a registered interest that happens to be documented in bearer form.

Yes. Every non-resident domestic entity must maintain a registered agent in the Republic, and that role is held by The Trust Company of the Marshall Islands, Inc. The address is used for statutory service and documentation rather than as a working mailing address, though a separate mail forwarding service is available from the Registry if you need one.

At least one director and one shareholder, and they can be the same person. The appointed director can be of any nationality and does not need to be a resident of the Marshall Islands, and a corporate director is permitted. Every RMI corporation must also appoint a Secretary.

There is no mandatory minimum. A standard formation is 500 registered and/or bearer shares of no par value, or up to US$50,000 worth of par value stock, and par value may be denominated in any currency. Authorising share capital above those amounts incurs a one-time capitalisation tax, assessed at formation or when the Articles of Incorporation are amended.

A non-resident entity may be organised for any lawful business purpose, but it must not do business inside the Republic — that is what its non-resident status, and therefore its tax exemption, rests on. Specifically, it must not engage in retailing, wholesaling, trading, or importing goods or services for or with residents of the Republic; any extractive industry in the Republic; any regulated professional service activity in the Republic; the export of any commodity or goods manufactured, processed, mined, or made in the Republic; or the ownership of real property located in the Republic. Plenty of contact with the Republic is expressly fine and does not make you resident: maintaining an office there, having resident officers or directors, holding bank accounts, using local attorneys and accountants, keeping books and share registries there, and holding directors’ or shareholders’ meetings there. Banking and insurance corporations are additionally subject to RMI banking and insurance law.

No. Under RMI law there is no requirement that the names of corporate officers, directors, or shareholders be filed in any public registry, and disclosure of LLC members and managers is voluntary. A corporate search reveals the company name, date of existence, amendments, and any document that was publicly filed — nothing more. That said, the records exist. Directors, executive officers, shareholders, and beneficial owners must be recorded internally and produced to the registered agent within 60 days of a demand made in connection with its audit function or a valid government request, including requests under the Marshall Islands tax information exchange legislation. If you want further protection, you can opt for a nominee director and nominee shareholder from Vepapu, where your details will not be shown to the registrar, but you will still be the ultimate beneficiary of your company.

Section 12 of the Associations Law exempts non-resident domestic and foreign corporations, partnerships, trusts, unincorporated associations, and limited liability companies from any corporate tax, net income tax on unincorporated businesses, corporate profit tax, income tax, withholding tax on the entity’s revenues, asset tax, tax reporting requirement on the entity’s revenues, stamp duty, exchange controls, and other RMI fees and taxes. Interest, dividends, royalties, rents, and other distributions paid by one non-resident entity to another non-resident entity or to a person who is not a citizen or resident of the Republic are likewise exempt from RMI tax and withholding. This is an exemption from Marshall Islands tax only — it says nothing about your own tax residence, and you may still have reporting and tax obligations where you live.

No audit, and no accounts are filed — but bookkeeping is not optional. The Associations Law requires every domestic corporation to keep reliable and complete accounting records with correct and complete books of account, sufficient to explain all transactions, determine the financial position at any time, and allow financial statements to be prepared. Underlying documentation — invoices, contracts, records of money received and expended, sales and purchases, assets and liabilities — must be kept alongside. Records must be retained for a minimum of 5 years and produced to the registered agent on demand. Failing to keep them knowingly or recklessly carries a fine of up to US$50,000, revocation of the articles of incorporation, or both. Vepapu’s accounting and bookkeeping plan keeps this in order for you.

Yes — one that is often missed. A non-resident corporation files no annual return, tax return, or financial statements, but it must file an economic substance report every year under the RMI Economic Substance Regulations 2018. The report goes through the Registrar’s online portal within 12 months of the entity’s anniversary date, using the entity number and PIN issued with the annual invoice, and covers the financial period that closed most recently. On submission you get a confirmation number and, within 72 hours, a Certificate of Economic Substance Reporting Compliance. Miss the deadline and all corporate services are suspended — nothing can be filed, issued, or recorded for the entity. Twelve months past the deadline, the Registrar will annul it, and reinstatement means an administrative procedure, a penalty fee, and filing every missed report. You also make annual attestations to the Registrar that your records of directors, officers, shareholders, and beneficial owners are being maintained.

The RMI Economic Substance Regulations 2018 came into force on 1 January 2019 and set substance requirements for entities carrying on defined relevant activities. Separately from whether the substance requirements themselves bite, the annual report is universal: all non-resident domestic entities and foreign maritime entities must file it, whether they are demonstrating compliance or claiming an exemption. Which category you fall into depends on what your company actually does, so we work through it with you before your first reporting deadline rather than after it.

Maintain a minimum of one director and one shareholder plus a Secretary; retain the registered agent within the Marshall Islands; pay the annual registration renewal fee; file the annual economic substance report by its deadline; make the annual attestations on your director, officer, shareholder, and beneficial ownership records; and keep comprehensive accounting records with supporting documents for at least 5 years.

The Business Corporations Act provides for an annual meeting of shareholders to elect directors, on a date set by the bylaws, and it can be held anywhere — inside or outside the Republic. In practice it is not enforced the way an AGM is elsewhere: the Act expressly says that failing to hold the meeting on time, or to elect enough directors, does not affect otherwise valid corporate acts and does not dissolve the company. Shareholders can also act by written consent instead of meeting. Nothing about the meeting is filed with the Registrar. If no annual meeting has been held for 13 months, holders of 10% of the voting shares can demand one be called.

Recurring costs are the annual registration renewal fee payable to the Registrar of Corporations, the registered agent and address fee, and the fee for the Certificate of Economic Substance Reporting Compliance, which is charged up front with the annual invoice so you can file at any point in your reporting window. Vepapu shows you the current figures in your quote before you commit.