Marshall Islands Registrar of Companies

The Marshall Islands are certainly idyllic but how do they stack of as an offshore jurisdiction? Read on to find out why a Marshall Islands company might be best avoided.

The Marshall Islands is an intriguing place with its beautiful waters seemingly fitting nicely alongside a vibrant offshore services sector. However, there are some key facts you should know before setting up a company, or doing business with one, in the tropical locale. Firstly, if you are looking for the Marshall Islands Registrar of Companies you can find it here:

Registrar Search

Read on for further details on Marshall Islands Structures

Marshall Islands Registrar of Companies
The Marshall Islands is a Well Known Offshore Jurisdiction

How Easy is it to Setup a Marshall Islands Company?

The reality is that it is exceedingly easy to form and establish a Marshall Island’s offshore company. Any resident agent or corporate service provider can take your details and file the required forms and have you up and running within approximately 7-days.

What About Shareholders and Directors?

The laws of the Marshall Islands are very straight forward and have been designed with the offshore world in mind. Subsequently, you will only need to appoint one shareholder and one director, and these roles can, potentially, be filled by nominees to enhance your privacy protection.

What is the Minimum Capital Required for a Marshall Islands Company?

Marshall Islands No Capital Requirements
Marshall Island Companies Have No Minimum Capital Requirements

Unlike many jurisdictions the Marshall Islands impose no capital requirements for newly formed entities. This means that you are free to form your company with whatever share capital you choose and, additionally, it is up to you if that specified capital is “paid-in” or not.

Will I Need to Have an Audit or Provide Financial Statements?

There are no requirements for the storing or filing of financial statements or documents within the Marshall Islands. However, I would always advise that basic financial statements should be prepared for your own records, but this is not a legal requirement. Additionally, there are no audit requirements or a need to have any financial statements reviewed.

Taxation – Marshall Islands Registrar of Companies

This is probably the question that most of you came here to have answered. Firstly, tax is not levied on your newly formed Marshall Islands company, at least in the Marshall Islands. However, you should take note that international taxation is becoming increasingly strict and complicated.

Subsequently, depending on the jurisdiction of your personal tax residency you might get caught in the net of your local tax authority. Many countries now have Controlled Foreign Company (CFC) rules that mean that your new offshore company could be treated as if it was domestic.

Regardless of your view, this could potentially mean that you are required to disclose its existence to your local tax authority and pay tax as if it was a domestic entity.

Banking for Marshall Island Structures

Banking is hard to obtain
Banking is Difficult to Obtain

This is likely to be the hardest part of any new entity which you form on the island. There are many agents that will advise you that a Marshall Island’s company is perfect as a holding structure but then fail to mention it can be difficult to obtain banking facilities.

Unfortunately, it is likely that you will need to bank locally on the Marshall Islands as there is limited acceptance of these sorts of entities in most of the offshore banks around the world. Banking is a huge problem especially given that there are only two licensed banks on the island both of which are less than palatable for an offshore company to use.

There may be other offshore banking institutions that are happy to deal with you but, regardless of where you go, you are going to be facing significant compliance and background checks to even get them to consider opening an account.

This is the unfortunate reality of offshore banking in 2022 and makes the Marshall Islands, generally, a non-starter for most offshore businesses.

Dealing with a Company – Marshall Islands Registrar of Companies

hard to sue a Marshall Islands Company
Be Wary of Dealing with Marshall Island Entities

If you are, potentially, about to do business with an offshore Marshall Islands company there are a few key points you need to consider. In most cases, it is exceedingly hard to commence legal action against an offshore company. Not only is there no public registrar of ownership information but any such action would need to be commenced in the islands. You can’t simply land a judgment and expect to collect.

Additionally, there really isn’t a good way that you can attach an order to local assets or garnishee bank accounts or even run substantive credit checks. The reality is that any work you do with a Marshall Islands entity is going to be based on trust and faith. Subsequently, it would pay to only advice credit or service on a limited basis as to reduce your downside risk.

Finally, just accepting transfers from a Marshall Islands bank could, potentially, flag you for further review by your local monetary authority. Unfortunately, from a money laundering and business perspective, the jurisdiction does not have the best of reputations. Be wary of your own, local banks, closing or restricting your account based upon transactions with offshore entities based in the Marshall Islands.

ConclusionMarshall Islands Registrar of Companies

On the face of it, the Marshall Islands provides an excellent place to incorporate a new offshore company. It is a zero-tax regime, provides for both natural and corporate directors/shareholders and provides almost no public information on ownership to the public.

However, you will quickly discover that despite these benefits it can be nearly impossible to secure banking facilities, especially if you are operating in the financial services space. Subsequently, a holding company with no bank account is an, almost, useless entity.

My advice to you is to seriously consider WHY you require an offshore company and work backwards from your ‘Use Case’ to find a jurisdiction that fits not only your personal requirements but also provides for anonymity. Additionally, you then need to establish whether you will be able to secure banking facilities and it, therefore, pays to reach out to banks to discuss their compliance positions before paying to establish the entity.

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