A Marshall Islands International Business Company (IBC) is governed by the Marshall Islands Business Corporations Act (BCA) which is similar to corporation laws in the United Kingdom and the United States. IBC’s are separate legal entities used for a variety of purposes such as holding companies, opening offshore bank accounts, engaging in international joint ventures, asset protection, estate planning, and international trade.
An IBC is also known as a “Non-Resident Domestic Corporation” which is the country’s most popular offshore company platform.
Every non-resident company is exempt from having to pay any type of taxes including corporate, income, capital gains, withholding, and stamp duty when The Marshall Islands Associations Law of 1990 was enacted.
Background
The Marshall Islands are an island country located in the Pacific Ocean near the equator. They are officially called the “Republic of the Marshall Islands”. They were colonized by the Spanish in 1528 and then sold to Germany in 1884 and then occupied by Japan in World War I. During World War II, the Americans conquered the islands and maintained control until its independence was gained in 1979. As a result of the U.S. influence, the U.S. Dollar is its official currency and English is its official second language.
Their political system is called a unitary parliamentary republic with a democratically elected legislature and a president. Its population is estimated at around 54,000.
Benefits
A Marshall Islands International Business Company (IBC) enjoys these benefits:
• 100% Foreign Ownership: Foreigners can own all of the shares in an IBC.
• Limited Liability: A shareholder’s liability is are limited to the capital investment in the company.
• Privacy: Shareholders, directors, and officers names are not part of any public records. Nominee shareholders and directors can be appointed.
• No Taxes: IBC’s do not pay any taxes if they do not carry on business in the Marshall Islands. Note that U.S. taxpayers and everyone obliged to pay income taxes on global income must declare all income to their tax agency.
• One Shareholder: The minimum number of shareholders is one to form an IBC.
• One Director: The IBC can be managed by only one director who can be the sole shareholder.
• Fast Registration: It only takes one business day to incorporate an IBC.
• No Accounting or Auditing Requirements: IBC’s are free to establish any accounting standards or auditing requirements.
• English: As a former territory of the United States, English is its official second language.
• U.S. Dollar: The U.S. Dollar is its official currency.
IBC Company Name
Marshall Islands IBC’s cannot take the same name of other legal entities or be too similar. The company name may be in any language using Roman characters.
Name reservations may be made with the government for up to six months at no cost. Two names may be reserved in case the first name is not approved.
While not required, it is recommended that an IBC name include one of the following words or its abbreviation: “Company”, “Corporation”, or “Incorporated”.
Trading Restrictions
An IBC cannot trade or conduct commercial activities inside the Marshall Islands. IBC’s are also prohibited from engaging in assurance, banking, collective investments schemes, funds management, insurance, reinsurance, trusteeship services, and trust management.
Registration
Registering a new IBC is a simple process which can be accomplished in one business day. Only a form indicating the corporation’s name, types of shares, and organizational structure are filed with the Registrar of Corporations. Documents may be prepared in English.
Articles of Incorporation
The IBC Articles of Incorporation will include the following:
• Corporation name;
• Purpose;
• Registered address;
• Aggregate number of shares authorized to issue (normally 500) as bearer and/or registered shares without par value;
• Corporation is authorized to have every power allowed by the Marshall Islands Business Corporations Act;
• Incorporator’s name and address;
• Shareholders and Board of Directors powers to adopt, amend, and repeal the corporation’s bylaws; and
• Signed and dated by the Incorporator along with one witness.
Limited Liability
IBC shareholders liabilities are limited to their capital investment in the company.
Shareholders
Only one shareholder is required to form an IBC. Shareholders can be from any country and can be natural persons or legal entities. Nominee shareholders are allowed.
The IBC may issue bearer or registered shares with par or no par value. Par value shares can be in any currency. Normally, 500 bearer shares or registered are issued without par value. Or, par value shares worth up to $50,000 USD.
Directors and Officers
The Board of Directors manage the IBC. Only one director is required who can be a citizen of and reside in any country and can be a legal entity (such as a corporation, LLC, trust, etc.) or a natural person. Nominee directors are permitted.
The only required officer is a company secretary is required who can be a resident of any country and either a legal entity or a natural person. The registered agent’s office can provide the company secretary.
Accounting and Auditing
The Marshall Islands do not require audited financial accounts. There are no filing of any annual returns. There are no required accounting standards or good practices.
Registered Office and Local Agent
A local registered agent must be appointed whose office address may be the registered office for the IBC.
Minimum Authorized Share Capital
No minimum authorized share capital is required. However, if the authorized share capital exceeds $50,000 USD, a one-time capitalization tax will be imposed.
The minimum paid up share capital is $1 USD.
Annual General Meetings
Annual general meetings are required. However, the meetings can be held anywhere.
Taxes
An IBC does not pay corporate tax, income tax, capital gains tax, stamp duty, or any other direct taxes.
Note, U.S. citizens and taxpayers from countries taxing worldwide income must declare all income to their tax agency.
Public Records
The names of the IBC shareholders, directors, or officers are not disclosed in any public records. Their names may also be withheld from the registered agent.
Registration Time
It is estimated that incorporating an IBC can take one business day.
Shelf Companies
Shelf companies are available for purchase in the Marshall Islands.
Conclusion
A Marshall Islands International Business Company (IBC) enjoys these benefits:100% foreign ownership, limited liability, no taxes, privacy, one shareholder can form the IBC and become its sole director, fast one day registration, no accounting or audits requirements, the U.S. Dollar is its official currency, and English is its official second language.
