Marshall Islands Offshore Company Formation

Legal form: The Marshall Islands Associations Law, adopted in 1990, is modeled on the corporate laws of the states of Delaware and New York and was modified to include all the necessary characteristics of an offshore jurisdiction, such as bearer shares, facsimile filings, and execution of documents without notary affidavits. With a unique flexibility, each corporation may be organized in the U.S. style with a President, Secretary and Treasurer, or in the U.K. style with a Managing Director and Corporate Secretary. The Marshall Islands Association Law was recently republished in a new publication which includes the Business Corporations Act, Partnership and Limited Partnership Act, Unincorporated Associations, and the Limited Liability Company Act.

The most popular company form used by international investors is Marshall Islands is non resident corporation. A Company incorporated in the Marshall Islands has the same powers as a natural person. Cannot trade within the Marshall Islands. Cannot undertake the business of banking, trust services, insurance, assurance or reinsurance.

Name of the company: Marshal Islands corporations' names must end with one of the following words, or their relevant abbreviations – Limited, Corporation, Incorporated, Societe Anonyme, Sociedad Anonima, etc. Names may be in any language as long as Roman characters are used and any standard corporate suffix is acceptable. The following words cannot be used in the name of a Marshall Islands corporation: 'Trust', 'Bank', 'Insurance'. Furthermore, words such as 'Foundation', 'Charity' and others may be prohibited pursuant to the discretion of the Registry. Names denoting any connection to local, state or national Governments are generally prohibited. The Registrar may require an English translation if a foreign language is used to ensure that the proposed name is not a restricted name.

Memorandum and Articles of Association: The Republic of the Marshall Islands has an exclusive franchise with one company, which is licensed to incorporate all non-resident companies. After receipt of name approval, companies can be incorporated using standard Articles of Incorporation. With standard Articles, the request to incorporate should contain the following information: Corporate Name, Number of authorized shares, Whether shares have par or no par value (if par value, amount per share), Whether the shares are to be in bearer and/or registered form, If clients own Articles of Incorporation are to be used, these must be prepared in accordance with the Marshall Islands BCA.

Shareholders: A minimum of one shareholder is required which may be an individual or a corporate body. The details of company beneficial owners and shareholders are not part of the public records.

The share capital: There is no specific minimum capital requirement. The standard authorized share capital is 500 shares without par value or a capital with a stated par value up to US$ 50,000. The authorized share capital may be expressed in any currency. The minimum issued share capital is either one share of no par value or one share of par value. Marshall Islands' corporations may have registered shares, bearer shares, preference shares, and redeemable shares, shares with or without par value and shares with or without voting rights.

Directors of the company: Marshall Island Corporation requires a minimum of one director and corporate directors are permitted. The names of directors do not appear on the public file. There is no requirement to have resident directors.

Registered office and local agent/secretary: Every company, registered in Marshall Islands is required to have a registered office and address there, which should be notified to the Registrar. A Registered Agent is required to ensure that the corporation has an assigned representative at a known address to receive all service of process (legal notices) on its behalf. A Marshall Islands corporation must appoint a company secretary who may be a natural person or a body corporate. The company secretary can be of any nationality and need not be resident in the Marshall Islands.

Taxation: Marshall Islands non-resident companies, including all corporations, partnerships, limited partnerships and limited liability companies are statutorily exempt from all forms of taxation in the Marshall Islands. There is zero taxation of all income, profits, dividends, royalties, compensation or other related sources of revenue.

Audit and financial returns: Whilst there is no requirement to file audited accounts or annual returns with the authorities, a company is required to keep financial records, which should reflect the financial position of a company.