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Marshall Islands
We have a team of experienced professionals to support all your business needs, ensuring smooth operations and regulatory compliance. This allows you to confidently establish and grow your business in the Marshall Islands with efficiency and ease.
WHY MARSHALL ISLANDS?
The Republic of the Marshall Islands (RMI), a sovereign nation in the western Pacific Ocean, is strategically located between the United States and Asia, offering a favorable jurisdiction for international business, shipping, and offshore structuring. As a Compact of Free Association partner with the U.S., it uses the U.S. dollar as legal tender and benefits from close defense and trade ties.
The country is globally recognized for its flexible corporate legislation, confidential offshore entity framework, and zero direct taxes, making it a preferred destination for ship registration, holding companies, and international investment entities.
ADVANTAGES
- No corporate or personal income tax on offshore entities.
- 100% foreign ownership permitted across most business types.
- English as the official language of government, law, and business.
- U.S. dollar as official currency, eliminating exchange risks.
- Well-regulated international ship registry, ranking among the top three globally.
- Efficient and private offshore company formation through the Marshall Islands Business Corporations Act.
- No requirement to file annual financial statements or tax returns for non-resident entities.
SIMPLE TAX REGIME
The Marshall Islands is a zero-tax jurisdiction for non-resident international business companies (IBCs). Companies that do not conduct business within the RMI are exempt from corporate tax, income tax, capital gains tax, and withholding tax.
For domestic businesses operating within the RMI, limited tax obligations apply under the Revenue and Taxation Act, including gross revenue taxes, import duties, and certain employer contributions.
TAX SLABS
Offshore Entities:
- Corporate income tax: 0%
- Withholding tax: 0%
- Capital gains tax: 0%
- VAT/GST: Not applicable
Domestic Businesses:
- Gross Revenue Tax: 3% on monthly revenues exceeding USD 10,000
- Import Duty: Variable, depending on product category
- Social Security Contributions:
- Employer: 8%
- Employee: 8%
There are no personal income taxes for residents or non-residents.
INCOME TAX RATES
There is no personal income tax in the Marshall Islands.
However, employees and employers must contribute to the Marshall Islands Social Security Fund, based on gross wages:
- Employee contribution: 8%
- Employer contribution: 8%
- Capped annually at a maximum wage threshold.
Self-employed individuals contribute a flat 16% of net earnings.
MARSHALL ISLANDS COMPANIES
Common Types of Legal Entities in the Marshall Islands:
- International Business Corporation (IBC)
- Most widely used offshore structure
- Formed under the Business Corporations Act
- No minimum capital, no tax, and no public reporting
- Nominee directors and shareholders permitted
- Limited Liability Company (LLC)
- Flexible management structure
- Member-managed or manager-managed
- No tax for non-residents
- General Partnership / Limited Partnership
- Governed by the Revised Partnership Act
- Can be used for private funds or investment structures
- Domestic Corporation
- Used for businesses operating within the RMI
- Subject to local taxes and licensing requirements
- Non-profit Corporation
- Designed for religious, educational, and charitable purposes
- Must operate in compliance with non-profit laws and bylaws
- Maritime Entities
- Vessel-owning companies structured under the Maritime Act
- Strong global reputation for ship registration, with no tonnage tax
FOREIGN INVESTMENT
The Marshall Islands permits 100% foreign ownership of offshore companies, with no restrictions on capital repatriation or foreign exchange.
While offshore businesses are tax-exempt, onshore activities (those conducted within the Marshall Islands) require licensing under the Foreign Investment Business License Act.
Priority sectors for foreign investment include:
- Maritime and shipping services
- Financial services and offshore structuring
- ICT and satellite telecommunications
- Sustainable fisheries and marine products
- Tourism and hospitality
- Green energy and climate resilience projects
INTELLECTUAL PROPERTY RIGHTS
While the Marshall Islands does not have a robust domestic IP registry, it is possible to seek protection through:
- U.S. or international filings under the Madrid Protocol
- Contractual protections or offshore trademark holdings
Legal recognition of trademarks, copyrights, and patents generally follows common law precedents. Companies often register IP in a more active jurisdiction (e.g., U.S., EU) and assign the rights to a Marshall Islands holding company for asset protection and tax efficiency.
CONCLUSION
The Marshall Islands offers one of the world’s most business-friendly offshore environments—with zero taxes, robust privacy laws, minimal regulatory burdens, and full foreign ownership rights. It is a globally preferred jurisdiction for shipping companies, asset protection vehicles, fund structures, and international investment entities.
While local business infrastructure and domestic market opportunities are limited, the jurisdiction’s reputation, neutrality, and flexible legal system continue to attract global entrepreneurs, private investors, and corporations seeking tax efficiency and regulatory simplicity.
RELATED BLOGS
With a holding company, businesses can maximize tax efficiencies, create IPOs, and merge with other companies in the Territory or with authorized foreign entities, and more. Therefore, the country’s corporate structures are a favored choice for wealth management and effective tax structuring.
Author: Chandrawat & Partners
Topic: Doing Business in Cayman Island
