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REGISTER YOUR COMPANY NOWNRDC incorporation checklist
If you are considering the incorporation of a NRDC in the Marshall Islands, you should take into consideration the following points:
1 Director, 1 Shareholder Required, No Locals
Incorporation in 4-6 days
Legal System Based on Common Law
No Filing of Financial Records, No Auditing
No local tax for income outside Marshall Islands
No Public Record for Directors and Shareholders
Under the Marshall Islands Business Corporations Act (Marshall Islands Associations Law 1990) as it was amended in 2018, the Non-resident Domestic Corporation (NRDC) is a type of company limited by shares with the capacity to engage in any lawful activity including raising capital from the public through a share offering and conducting in Forex business. A prime limitation imposed by the Marshall Islands law is that the NRDC does not conduct business within the territory of the Marshall Island nor undertakes banking, insurance, re-insurance or any other activity not allowed by the legislation without a license, with the exception of receiving professional services such as accountants and legal advisors.
1 Director, 1 Shareholder Required, No Locals
Exemption from Filing of Financial Records and Auditing
Exemption from Local Taxes for Non-residents
Incorporation in 4-6 days
Legal System Based on Common Law
No Public Record for Shareholders
Under the Marshall Islands Limited Liability Company Act, as it was amended in 2018, the Marshall Islands LLC Company, is an independent legal entity and has the same capacity to engage in any business provided that the activity is allowed by the Laws of the Marshall Islands and its operating agreement. The operating agreement is the document that determines the rules regarding the structure and the management of the company. While the shareholders liability, or members as they are called, is limited to the amount of capital paid to the company for their participation, the LLC Company is considered as a pass-through entity in terms of taxation. This means that the members are subject to personal income tax in the jurisdiction where they are tax residents, on the LLC Company profits equivalent to their share participation in the company, regardless if the profits were distributed to the members or not. Notably, there are specific countries which do not acknowledge the tax transparency of the LLC Company and if a company is considered to have its tax residency in one of those countries, it will be under the corporate income tax of this jurisdiction.
If you are considering the incorporation of a NRDC in the Marshall Islands, you should take into consideration the following points:
The company’s name must not be very similar to existing names on the registrar and it must not contain improper or offensive words. The following words are prohibited: “bank”, “chartered”, “establishment”, “foundation”, “insurance”, “partnership” or “trust”. The company’s name must end with a word or abbreviation signifying a corporate body or limited liability, for example such words are “Limited”, “LTD”, “Corporation”, “Corp”, “Incorporated”, “Inc.” etc. The name of the NRDC must be registered in Roman script, names registered in any other script are allowed but they must be accompanied with an accurate translation in Roman script. It should be noted that the Registrar is empowered by legislation to object the registration of any name that in the Registrars discretion is considered undesirable.
A Marshall Islands NRDC is required to have a registered office address in the Marshall Islands which must be provided by an authorised registered agent there.
One director is the minimum required, there is no requirement for them to be locals and there is no requirement regarding the place and frequency of the board meeting.
A corporate entity or a natural person can be appointed as directors. The director and shareholder can be the same person. In the Marshall Islands it is optional for directors to register their details on the public record.
The appointment of a secretary is required. There is no requirement for the secretary to be local and the director and secretary can be the same person. Corporate entities can be appointed as secretary.
One shareholder is the minimum required, there is no requirement for them to be locals and corporate entities or a natural person can be appointed as shareholders. It is required that the shareholders hold a meeting annually but there is no requirement regarding the place of the meeting, which can be conducted remotely through electronic communication or voting by proxy.
The director and shareholder can be the same person. In the Marshall Islands it is optional for shareholders to register their details on the public record.
The beneficial owners’ details are not registered on the public record and cannot be accessed by the public.
The owners of a NRDC are free to determine any amount as the authorised capital at incorporation and it can be de-nominated in any currency, though the US Dollar is mostly preferred and the amount of USD 50,000 is suggested. The authorised capital is the maximum amount of capital that the company is authorised by its constitutional documents to draw from its shareholders to issue in exchange shares.
Registered shares and bearer shares are admissible and the minimum number of shares that must be issued is one with or without par value.
No requirement is imposed on minimum paid up capital at incorporation; this means that the owners of the Company are not required to set a deadline as to when such capital must be paid up by the shareholders.
A NRDC Company in Marshall Islands can be incorporated within 4-6 working days.
Ready-made but unused NRDC Companies are available in the Marshall Islands, in case you are in need of a quicker incorporation process.
Currently, there are no substance requirements for NRDC Companies. However, the Associations Law (Amendment) Act enacted in 2018 that introduced changes, the Business Corporations Act (Marshall Islands Associations Law of 1990) governing NRDC Companies, empowers the Registrar of Companies to impose economic substance and reporting requirement. It is anticipated that economic substance provisions will be introduced, in accordance with those introduced in other offshore countries.
The NRDC Company must maintain accounting records, reflecting accurately its financial situation which may be kept anywhere in the world. The NRDC Company is not required to file its accounting records, nor is required that those accounts be audited.
NRDC Companies that are registered in the Marshall Islands are exempted by law from corporate income tax obligation and all other types of taxation. The exemption includes trading or investment income, dividends, capital gains and compensation or any other sources associated with revenue.
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If you are considering the incorporation of a Marshall Islands LLC Company, you take into consideration the following points:
The company’s name must not be very similar to existing names on the registrar and it must not contain improper or offensive words. The following words are prohibited: “bank”, “chartered”, “establishment”, “foundation”, “insurance”, “partnership” or “trust”. The company’s name must end with a word or abbreviation signifying a corporate body or limited liability, for example such words are “Limited Company”, “Limited Corporation” etc. The name of the LLC Company must be registered in Roman script, names registered in any other script are allowed but they must be accompanied with an accurate translation in Roman script. It should be noted that the Registrar is empowered by legislation to object the registration of any name that in the Registrars discretion is considered undesirable.
A Marshall Islands LLC Company is required to have a registered office address in Marshall Islands which must be provided by an authorized registered agent in Marshall Islands.
In a Marshall Islands LLC Company, directors are called managers, one manager is the minimum required, there is no requirement for them to be locals and there is no requirement regarding the place and frequency of board meetings. Corporate entities or a natural person can be appointed as managers. The manager and shareholder can be the same person. The managers’ record is filed but it’s not accessible by the public.
The appointment of a secretary is not a requirement.
In a Marshall Islands LLC Company, the shareholders are called members, one member is the minimum required, there is no requirement for them to be locals and corporate entities or a natural person can be appointed as members. There is no requirement regarding the place and frequency of the members’ general meetings.
The manager and the member can be the same person. The managers’ details are not registered on the public record and cannot be accessed by the public.
The beneficial owner’s details are not registered on the public record and cannot be accessed by the public; those details are only held by the registered agent of the LLC Company who is bound by the law to keep this information.
Marshall Islands LLC Companies are not required to issue shares. The members of an LLC Company are free to determine in the operating agreement the rules regarding the amount of capital paid to the company in exchange of their participation. Any amount may be set as the authorised capital and it can be denominated in any currency, though the US Dollar is mostly preferred and the amount of USD 50,000 is suggested.
No requirement is imposed on minimum paid up capital at incorporation; this means it is not required to set a deadline as to when such capital must be paid up by the members.
An LLC Company in the Marshall Islands can be incorporated within 4-6 working days.
Ready-made but unused LLC Companies are available in the Marshall Islands, in case you are in need of a quicker incorporation process.
Currently, there are no substance requirements for LLC Companies. However, the Associations Law (Amendment) Act enacted in 2018 that introduced changes on the Limited Liability Act OF 1996 governing LLCs, empowers the Registrar of Companies to impose economic substance and reporting requirement. It is anticipated that economic substance provisions will be introduced, in accordance with those introduced in other offshore countries.
The LLC Company must maintain accounting records, reflecting accurately its financial situation which may be kept anywhere in the world. The LLC Company is not required to file its accounting records, nor is required that those accounts be audited. Also, a government license fee is imposed, payable on an annual basis.
The LLC Company is considered as a pass-through entity in terms of taxation; thus it is not subject to corporate tax income. However, the LLC Company members are subject to personal income tax in the jurisdiction where they are tax residents. The payable tax paid by each member, is based on the Company’s profits, equivalent to the members share participation, regardless if the profits were distributed or not. Additionally, LLC Companies are exempted from any tax, such as tax on capital gains, dividends, interests, royalties and income deriving from outside Marshall Islands.
Notably though, there are specific countries which do not acknowledge the tax transparency of the LLC Company, and if a company is considered to have its tax residency in one of those countries, it will be under the corporate income tax of this jurisdiction.
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