The Marshall Islands’ financial system is comprised of three main banks, two large money transfer operators, two insurance companies, and a pension fund. The stability of the country’s banking system faces risks on two fronts. One is the high level of household debt, which reached 60% of total employee’s compensation in 2018. The other is the possibility of the Marshall Islands losing its connections with US banks due to rising costs associated with complying to US anti-terrorism financial rules. In response to these risks, the government is undertaking measures to strengthen financial regulations and prudential guidelines and is drafting new anti-money laundering legislation.
The key features of a Marshall Islands Company Formation are:
The Marshall Islands statutorily exempts all non-resident (i.e. offshore) companies from taxes. Thus, all foreign-owned companies and partnerships are exempt from all taxes if they do not do business in the Marshall Islands.
Marshall Islands Companies and their Tax Liability
The Marshall Islands has a stable business environment; the currency is the US dollar. There is no Marshall Islands personal income tax for employees, directors and/or shareholders of non-resident domestic companies. Personal income taxes are applicable to all persons employed in the Republic of the Marshall Islands , the tax rates being 8% for the first US$10,400 and 12% thereafter. The Government has not signed double taxation treaties with any countries. However, under the Compact of Free Association with the United States, United States citizens may be relieved of their liability to pay tax in the United States on income earned in the Republic of the Marshall Islands. To be eligible they must have resided in the Marshall Islands for at least 183 days of the taxation year.
Marshall Islands Offshore Company Formation / Registration
Company formation normally takes between 1 to 2 days to register a new company.
Marshall Islands Offshore Company Anonymity and Disclosure
Marshall Islands companies are traditionally well known for their confidentiality. Shareholder and Director registers are not available for public inspection. There is no requirement to file annual accounts, and therefore these are not publicly accessible.