Offshore company formation in Marshall Islands
At different stages in their history, the Marshall Islands were a colony of Spain until 1885, a colony of Germany from 1917, and a colony of Japan until 1944. After 1945 the islands had the status of a territory ruled by the United States of America.
In 1986, independence as a sovereign nation was attained under a Compact of Free Association with the United States. As a result of this the local currency is the US dollar, with English and Marshallese being the islands two most widely spoken languages.
The Republic of the Marshall Islands maintains a politically stable, democratically elected parliamentary system of government, consisting of two legislative chambers which elect the President from among their members for a four-year term. The jurisdiction has one of the biggest ships registers so would be the perfect location for companies that are planning to own and manage yachts and ships.
- Total area – 181 sq. km
- Population – 70,000
- Political status – Republic
- Capital – Majuro
- Official language – English, Marshall
- Official currency – USA Dollar (USD)
- Time zone – GMT +12
Directores / Officers
Marshall Islands non-resident companies require a minimum of 1 Director, who may be a natural person or a corporate body from any legal jurisdiction. Each Marshall Islands company must keep information on its Directors with the Registered Agent.
Marshall Islands non-resident companies require a minimum of 1 shareholder, who may be a natural person or a corporate body from any legal jurisdiction. Each Marshall Islands company must keep information on its shareholders with the Registered Agent.
Authorised and issued share capital
The name of a Marshall Islands non-resident company must end with the words “Incorporated”, “Corporation”, “Limited”, or suffixes such as “Inc.”, “Corp.”, “Ltd.”, “S.A.”, “GmbH”, etc. Company names containing restricted words such as “Bank”, “Insurance”, “Trust”, “Assurance”, “Imperial”, “Royal” etc. will not be permitted unless an appropriate national operating license has been obtained by the company.
Beneficial ownership information
Filing of annual return
Filing of financial statements
Restrictions on Marshalls Islands companies
Why incorporate a Marshall Islands offshore company?
A Marshall Islands company formation is a very flexible, tax-free structure, with few restrictions on the business that the company can engage in.
A Marshall Islands company cannot trade within the Marshall Islands. They cannot undertake the business of banking, trust services, insurance, assurance or reinsurance.
Among other advantages, a Marshall Islands company does not have the tainted ‘tax haven’ reputation that is associated with many other offshore jurisdictions.
Known as a highly versatile jurisdiction for conducting international business, incorporating a corporation, LLCs and partnerships in Marshall Islands offers the following benefits:
Main uses of a Marshall Islands offshore company
Tax planning – Offshore tax
A Marshall Islands company formation may be used to legitimately minimize tax by properly structuring financial and business affairs.
A person working overseas may be able to limit his tax burden by receiving, into the country in which he is working, a fixed level of remuneration and accumulate the balance in an offshore company. Similarly, designers, authors, consultants and entertainers may assign or contract with an offshore company the right to receive fees due under a contract for services.
People who travel the world and expatriates often find that their connections with foreign countries create uncertainties and undesirable consequences for their wealth on their death. The transfer of wealth to an offshore company (again, there are no MI trusts) can avoid these difficulties, the wealth is protected in a stable environment well away from the unwanted attentions of the tax and inheritance laws of foreign jurisdictions.
Where a person is domiciled outside a territory and owns assets located in that territory (e.g., property), then such assets may be protected against inheritance tax and higher rates of taxation by holding the assets through an offshore investment company.
Confidentiality offshore companies can offer you complete privacy. If the company shares are held by a Trust, the ownership is legally vested in the trustee, thus gaining the potential for even greater tax planning advantages.
You can set up family and protective Trusts (possibly as an alternative to a Will) with an offshore company for accumulation of investment income and long-term benefits for beneficiaries without high income, inheritance or capital gains taxes.
Conduct business with low or no corporate taxes
High net worth individuals gain privacy and save on professional fees by using offshore companies as Personal Holding Companies. These entities may be suitable for inheritance planning and reducing the costs and time delays in probate.
You can protect your assets by setting up an offshore company in combination with a Trust. Choosing the right country to incorporate an offshore company can help you avoid unnecessary and high taxes that would otherwise be payable if the assets were held directly. It can also help protect assets from creditors, adverse claimants and other parties; or help you secure against future claims such as bankruptcy, judgment creditors and other litigants.
Shipping companies ships or yachts may be owned by an offshore company and registered in an offshore jurisdiction which can prove cheaper and more tax efficient method of ownership.
Simplification of transfer of properties held in several countries: if you own properties in several different countries, you will understand that the sale or probate of properties can get complex and expensive. If an offshore company collectively holds these properties title, the ownership can be transferred by company shares rather than transferring the actual properties.
Many of the difficulties and expenses associated with investment in overseas property, such as holiday villas, may be avoided through the use of an offshore company to hold the title of the property. Sales of the property at a future date can be dealt with quickly and easily by the sale of the company shares to the purchaser. This also saves legal fees and overseas transfer and value added taxes levied by certain foreign countries. It can also be used to successfully avoid capital gains and inheritance taxes.
Single purpose trustee
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