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Marshall Islands

Companies and Structures

The Republic of the Marshall Islands (RIM) is located in the Pacific Ocean, specifically between Hawaii and Australia. It is a group of islands and atolls with paradisiacal beaches whose potential is still under development.

However, currently, we can already find important investments in areas such as manufacturing or fishing because the territory is located in an important exclusive economic zone and the government offers many facilities for foreign investment and the establishment of non-resident companies in the Marshall Islands.

In that sense, the registration or incorporation of non-resident companies in the RIM is done by the US Corporation International Registries, Inc (IRI) and its offices that are distributed throughout the world in cities such as London, Houston, Dubai, or Mumbai.

All the necessary information can be requested from these offices. IRI is in charge of this process because in 1990 the Trust Company of the Marshall Islands and the Marshall Island Maritime Corporate Administrators Inc, which are affiliates of the first one, reached an agreement with the Marshallese government that would allow them to be in charge of this area.

From the agreement born in 1990, the Republic of the Marshall Island Associations Law was developed, which is in charge of regulating all aspects related to corporate activity in the country. This law is modeled under the corporate laws of the American state of Delaware and is integrated by the Business Corporations Act (BCA), Revised Partnership Act, Limited Partnership Act (LP), and Limited Liability Company (LLC) Act.

International Business Corporations (IBCs)

An International Business Corporation (IBC) is a non-resident company that is normally used as a vehicle for international trade and business and generally counts with tax exemptions. Among other purposes that can have this type of entity, we can find the holding of securities and bank accounts, trust and estate planning, asset protection, and the holding of ships. International Business Corporations offer the possibility of maximizing profitability and minimizing personal liability.

Forming such a company in the RMI can take one day and is done in two ways, by direct contact to an IRI office or through an online form in which the following steps must be followed.

1. Choose a corporate name, any name can be used as long as Roman characters are used. Two alternatives should also be included in case the initial is not available. The suffix can be added.

2. Share Structure. Shares may have a par value or no par value. They may be denominated in any currency. The standard formation is stated to be 500 registered shares without par value or up to USD 50,000. Authorized share capital above these amounts will incur a one-time capitalization tax.

3. Select Organizational Activity to be taken by the incorporator, the incorporator may, at no additional cost, elect directors, appoint officers or adopt bylaws.

General Partnership

The General Partnership is a type of company where there is an arrangement between two or more individual owners of the company to divide all assets, profits together with legal and financial responsibilities. In this case, unlike the IBCs, the General Partnership offers greater flexibility in the management of liabilities, profits, and losses that can be freely divided among the partners. However, your assets may be at risk because a General Partnership does not protect against losses above the capital investment.

This type of setup must be registered under the RMI Revised partnership act, and a Certificate of Partnership Existence in the Registrar of Corporations must be filed. It must include the name of the partnership, the contact information of the registered agent, and a statement that the partnership will file a Certificate of Dissolution upon dissolution of the partnership.

The forms required to register a General Partnership in the RMI can be found at the website of the International Registries, Inc. The registration fee is USD 1,300, after which USD 900 must be paid each year. Mundo can help you with this process.

Limited Partnership (LP)

A limited Partner or silent partner is understood as a co-owner of a company whose liability for the debts of the company cannot exceed the amount invested. It is called a silent partner because it has limited voting power in the decisions of the company. In the same way, this can be understood as a positive aspect as this configuration protects passive investors by limiting their liabilities to the amount of capital contributed.

A Limited Partnership must be registered in accordance with the RMI Limited Partnership ACT by filing a certificate of Limited Partnership on behalf of each General Partnership with the Registrar of corporations. This form can also be found on the IRI website.

The certificate must include the name of the Limited Partnership, contact details of the registered agent; a statement that a certificate of dissolution will be filed upon dissolution of the partnership. Finally, the name and business residence of each general partner must be included. The amounts related to the Limited partnership certificate are also USD 1,300, thereafter USD 900 must be paid every year.

Limited Liability Company (LLC)

A Limited Liability Company is understood as a company structure in which the owners are not personally liable for the debts or liabilities of the company. The main difference with other structures such as partnerships is that they separate the assets of the company from the personal assets of the company owner, protecting him/her from liabilities and debts. It can be said that they combine the positive aspects of IBCs and Partnerships.

Another aspect to highlight is that the members will not need to be part of the company's management, since these functions can even be delegated. However, this is not a limitation.

The LLC is registered under the Limited Liability Company Act. The Certificate of Formation and the Operating Agreement which defines the economic organization, management responsibilities, and other arrangements for members or managers of the LLC must be completed. Finally, the names of the members are not disclosed on the Certificate of Formation, giving it a higher degree of confidentiality. The fee for completing the Certificate of Formation is USD 650, thereafter USD 450 must be paid each year; this information can be found on the IRI website.

Advantages of Starting a Company in the Marshall Islands

Starting a company in this territory brings numerous benefits and facilities, from Mundo and International Registries, Inc we list them as follows:

1. RMI Associations Law was developed based on the corporate law of the U.S. state of Delaware.

2. Zero tax jurisdiction and low cost and inexpensive to administer.

3. Same day formation and filling of the corporate document.

4. Simple maintenance with no annual filings, no notarization, and facsimile filings

5. To protect the confidentiality of shareholders, members, limited partners, directors, managers, and officers; disclosure of names is voluntary.

6. Capital can be expressed in any currency.

7. Standard articles incorporation is also available in Spanish and Chinese.

Finally, it can be understood that there are numerous benefits and facilities related to the establishment of a company in the Marshall Islands. All the information can be found in the International Registries, Inc. website; if you wish to receive support, we will be glad to assist you here at Mundo.