Company Registration in the Marshall Islands - Business Starting & Setup

The Marshall Islands’ legal system is a mixed legal system of US and English common law, customary law, and local statutes.

The main law regulating companies on the Marshall Islands is Business Corporations Act.

The principal forms of business organization in Marshall Islands are:

• international business corporation;
• general partnership;
• limited partnership;
• limited liability company;
• foreign maritime entity.

For offshore solutions the most common structure is the IBC.

• Corporate names may be in any language as long as Roman characters are used.
• Any standard, internationally accepted, corporate suffix is permitted.
• Name clearance may be achieved over the telephone, via fax or email through any IRI office.
• Names may be reserved at no cost for up to six (6) months in advance of formation.
• Two (2) alternative names should be provided in the event that the first selection is not available.
• Company name should not be the same as the name of a corporation of any type or kind.
• The following words cannot be used in IBC name: bank, foundation, chartered, partnership, establishment, any expression indicating that the corporation is a governmental agency, church or public charity, insurance, trust, airline, aviation, loan, fund, brokerage.

1. Check the uniqueness of the proposed company name: The Registrar of Corporations performs a name search.

2. Have company charters and documents notarized: Notarization can be done at the Attorney General’s Office.

3. Register the company with the Registrar of Corporations: To register the company with the Registrar of Corporations, entrepreneur must file the following documents:

Articles of incorporation, including company name, duration, purpose, registered address, number of shares, and so forth;

• Corporate charter (copy);
• Incorporation fee receipt (copy);
• Foreign investment business license receipt, if applicable (copy).

4. Obtain the employer identification number at the Marshall Islands Social Security Administration: The employer identification number is also the company’s tax identification number.

A corporate search will reveal the name of the corporation, the date of existence, amendments and any other publicly filed document. Under Republic of the Marshall Islands (RMI) law, there is no requirement that the names of corporate officers, directors or shareholders be filed in any public registry. Such information, therefore, remains confidential.

Every IBC shall have a registered office and a registered agent in the Republic. Non-resident domestic entities are provided a registered agent, which is The Trust Company of the Marshall Islands, Inc.

IBC which fails to maintain a registered agent as required by this Act shall be dissolved or its authority to do business or registration shall be revoked.

An IBC may have a common seal, but need not have one.

Redomiciliation into and out of the RMI is permitted. Redomiciliation into the RMI is free of charge. Upon redomiciliation, the original date of formation and company existence remains the same and is unaffected.

Marshallese IBC should have at least one (1) director. Director can be individual or business entity, resident or non-resident.

Meetings of the board, regular or special, may be held at any place within or without the Republic, unless otherwise provided by the articles of incorporation or the bylaws.

TCMI does not provide nominee directors.

Every Corporation shall have a secretary. Secretary of the corporation may be natural persons, a corporation or other business entity.

Secretary may be of any nationality and need not be residents of the Republic.

IBC must have at least one shareholder. A shareholder can be a natural person or a business entity, resident or non-resident.

Meetings of shareholders may be held at such place, either within or without the Republic as may be designated in the bylaws. An annual meeting of shareholders shall be held for the election of directors on a date and at a time designated by or in the manner provided in the by-laws. Any other proper business may be transacted at the annual meeting.

The Marshall Islands recently introduced the obligation for companies to keep a register of their beneficiaries.

However, this information is not public - each company keeps its register in its office. Access to this information is restricted to the Government of the Marshall Islands (upon request) and the registering agent.

There is no specific minimum capital requirement for IBCs.

The standard authorized share capital is 500 shares without par value or a capital with the stated par value up to 50 000 USD. The capital exceeding this amount is subject to capitalization tax.

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.

Except as otherwise provided in its articles of incorporation, a corporation may be dissolved if, at a meeting of shareholders, the holders of two-thirds of all outstanding shares, entitled to vote on a proposal to dissolve, by resolution consent that the dissolution shall take place.

Whenever all the shareholders entitled to vote on a proposal to dissolve shall consent in writing to a dissolution, no meeting of shareholders shall be necessary.

Articles of dissolution shall be signed and filed with the appropriate Registrar or Deputy Registrar of Corporations. The articles of dissolution shall set forth

• the name of the corporation,
• the date of filing of the articles of incorporation,
• that the corporation elects to dissolve,
• the manner in which the dissolution was authorized by the shareholders,
• a statement that the directors shall be trustees of the corporation for the purpose of winding up the affairs of the corporation,
• a listing of either the names and addresses of the directors and officers or the address of the corporation and the name and address of the corporation’s legal representative(s) for the purpose of winding up its affairs.

The dissolution shall become effective as of the filing date stated on the articles of dissolution.

No corporation shall be dissolved under this Act until all fees to the Registrar of Corporations and Registered Agent due or which would be due or assessable for the entire calendar month during which the dissolution becomes effective have been paid by the corporation.

Except as otherwise provided in the articles of incorporation, the holders of one-half of all outstanding shares of a corporation entitled to vote in an election of directors may adopt at the meeting a resolution and institute a special proceeding in the High Court of the Republic for dissolution on one or more of the following grounds:

• that the directors are so divided respecting the management of the corporation’s affairs that the votes required for action by the board cannot be obtained;
• that the shareholders are so divided that the votes required for the election of directors cannot be obtained;
• that there is internal dissension and two or more factions of shareholders are so divided that dissolution would be beneficial to the shareholders;
• that the acts of the directors are illegal, oppressive or fraudulent;
• that the corporate assets are being misapplied or wasted.

On failure of a corporation to pay the annual registration fee or to maintain a registered agent for a period of one year, the appropriate Registrar of Corporations shall cause a notification to be sent to the corporation through its last recorded registered agent that its articles of incorporation will be revoked unless within 90 days of the date of the notice, payment of the annual registration fee has been received or a registered agent has been appointed, as the case may be. Furthermore, if any corporation abuses or misuses its corporate powers, privileges or franchises, the registered agent in its sole discretion shall have the power to resign as registered agent of such corporation. In either case, the Registrar of Corporations shall issue a proclamation declaring that the articles of incorporation have been revoked and the corporation dissolved as of the date stated in the proclamation. The proclamation of the Registrar of Corporations shall be filed and the date of revocation and dissolution shall be marked on the record of the articles of incorporation of the corporation named in the proclamation, and notice shall be given thereof to the last recorded registered agent. Thereupon the affairs of the corporation shall be wound up.

All corporations, whether they expire by their own limitations or are otherwise dissolved, shall nevertheless be continued for the term of 3 years from such expiration or dissolution as bodies corporate for the purpose of prosecuting and defending suits by or against them, and of enabling them gradually to settle and close their business, to dispose of and convey their property, to discharge their liabilities, and to distribute to the shareholders any remaining assets, but not for the purpose of continuing the business for which the corporation was organized.

Upon the dissolution of any corporation, or upon the expiration of the period of its corporate existence, the directors shall be trustees thereof, with full power to settle the affairs, collect the outstanding debts, sell and convey the property, real and personal, as may be required by the laws of the country where situated, prosecute and defend all such suits as may be necessary or proper for the purposes aforesaid, distribute the money and other property among the shareholders after paying or adequately providing for payment of its liabilities and obligations, and do all other acts which might be done by the corporation, before dissolution, that may be necessary for the final settlement of the unfinished business of the corporation.

At any time within 3 years after the filing of the articles of dissolution, the High Court of the Republic upon the petition of the corporation, or of a creditor, claimant, director, officer, shareholder, subscriber for shares, incorporator or the Attorney-General on behalf of the Government of the Republic, may continue the liquidation of the corporation under the supervision of the court in the Republic and may make all such orders as it may deem proper in all matters in connection with the dissolution or in winding up the affairs of the corporation, including the appointment or removal of a receiver, who may be a director, officer or shareholder of the corporation.

The RMI Registry program was initiated by the RMI Government in 1988. With the Adoption of the Maritime Act of 1990, the maritime laws of the RMI were brought in line with the many changes in ship registration, financing, and licensing which had occurred in the shipping industry. The Maritime Act is supplemented by Maritime Regulations, Marine Notices, and other policy guidelines issued by the RMI Maritime Administrator from time-to-time.

The RMI Registry continually strives to promote the quality of vessels registered in the RMI. Those vessels operating under the RMI flag achieve the highest ratings in the port State control international rankings. The RMI is the only major open registry to be included on the white lists of both the Paris and Tokyo Memorandums of Understanding and to hold Qualship 21 status with the United States Coast Guard (USCG) for 10 consecutive years.

The RMI Registry is the 3d largest registry in the world. Vessel types include, but are not limited to:

• Tank ships;
• LNG / gas carriers;
• Bulk carriers;
• Container ships;
• Offshore drilling, production, or service units;
• Passenger vessels;
• Yachts.

The benefits of vessel registration do not stop once the registration process is complete. Assistance is available on the procedural aspects of operating vessels during the entire time the vessel is registered under the flag.

The RMI Maritime Administrator (the “Administrator”) revised the RMI Yacht Code (the “Code”) to reflect changes in today’s yacht market, not only in terms of the increasing size and complexity of yachts being designed and built, but also to cover recent industry developments such as technological advancements, new international conventions coming into force, and port State control (PSC) inspection of yachts.

The Code applies to all RMI registered commercial yachts, private yachts limited charter (PYLCs), and passenger yachts (PAXYs) and has no maximum restriction on the tonnage or size of the yacht. The Code, in conjunction with the relevant international conventions to which the RMI is a party, sets the standards and substantial equivalencies for safety, security, pollution prevention, and seafarer accommodations appropriate to the size of the yacht, taking into consideration instances where it is not reasonable or practicable to comply fully with international conventions.

Yacht owners may choose the home port of either Bikini or Jaluit. Two (2) yachts may share a common name as long as they are registered in different home ports.

Private yachts may carry more than 12 guests onboard provided additional flag State requirements are met.

• Private yachts are eligible to obtain a United States (US) Cruising Permit.
• RMI commercially compliant yachts are eligible to charter in Europe.
• Private yachts of 18 meters (m) or more in length may be chartered out for up to 84 days as a PYLC, provided additional flag State and local requirements are met.
• Yachts may be registered while under construction.
• Existing MCA LY2/LY3-certified yachts may transfer to the RMI flag.
• 350 gross tons (GT) Master/500 GT Mate’s license is available for qualified applicants.
• With an assigned permanent representative at the IMO, the RMI participates in all major committee and subcommittee meetings.
• The RMI is an active member of the International Labour Organization (ILO) and was one of the first flag States to ratify the Maritime Labour Convention, 2006 (MLC, 2006).
• The RMI has been included on the US Coast Guard’s Qualship 21 roster for the ninth consecutive year and continues to be included on the White Lists of both the Paris and Tokyo Memorandums of Understanding (MoUs). The RMI meets the flag criteria for a low risk ship under the Paris MoU New Inspection Regime.
• The RMI has adopted groundbreaking legislation that permits the registration of a yacht that is still subject to a recorded mortgage in its present country of registry. This legislation provides for the continuation of the preferred status of the mortgage without interruption; thus, the foreign mortgage lien accompanies the yacht into the RMI Registry.
• Legal and financial professionals worldwide recognize the RMI legal system and mortgage recordation procedures.
• Support and technical assistance are available worldwide from a staff of qualified and experienced industry professionals.

Ownership. Ownership of commercial vessels and commercial and private yachts must be through an RMI corporation, limited or general partnership, limited liability company, or a qualified foreign maritime entity.

Foreign Maritime Entities. A Foreign Maritime Entity (FME) is a legal entity created under the laws of a jurisdiction other than the Republic of the Marshall Islands (RMI) that is eligible to own vessels when registered in the RMI pursuant to Section 119 of the Business Corporation Act (BCA).

Registration of a Foreign Maritime Entity. Non-Marshall Islands entities may apply for registration as a foreign maritime entity under the provisions of section 119 of the Marshall Islands Business Corporations Act for the purpose of owning and operating vessels under the Marshall Islands Flag. The following information must be included in the application:

• the name of the entity;
• the legal character or nature of the entity;
• the jurisdiction and date of its creation;
• a statement that the entity has the power to own or operate a vessel;
• a statement that the entity has the capacity to sue and be sued in its own name;
• the address of the principal place of business of the entity and, if such place is not in the jurisdiction of the creation of the entity, either the address of its place of business or the name and address of its lawful fiduciary or legal representative within the jurisdiction of the creation of the entity;
• the full name(s) and address(es) of the person(s) vested under law with management of the entity at the time of the application;
• the name and address within the Republic of the entity’s Registered Agent and a statement that the Registered Agent is to be its agent upon whom process against it may be served; and
• the title(s), or if other than an officer of the entity, the basis of the authority of the person(s) executing the document.

Documents required. Each application must be accompanied by the following documentation:

• A certified copy of the articles, charter or other document upon which existence of the entity is based, issued by the appropriate governmental agency, and any relevant amendments thereto; and
• Evidence of the entity’s current existence either by a government document (e.g., Certificate of Good Standing) or if government certificate is not possible, by certification of an attorney of the jurisdiction that in his/her knowledge the entity has a current legal existence.

The application should be prepared with:

• one (1) original,
• signed and acknowledged copy and
• two (2) duplicate copies.

Photocopies are acceptable as duplicate copies provided the signatures are legible. Applications shall be executed by signing above the printed name and title of the signatory. Applications may be acknowledged either:

1. before a notary public; or
2. by the person signing the instrument under penalty of perjury pursuant to section 5 of the Business Corporations Act.

The original acknowledged Registration as a Foreign Maritime Entity along with the duplicates shall be forwarded to any office of Marshall Islands Maritime and Corporate Administrators, Inc. for processing. When processing is complete, a duplicate copy of the application for Registration as a Foreign Maritime Entity, as filed, is returned to the client.

Fees. The filing fee for Registration as a Foreign Maritime Entity is 1 300 USD. Thereafter, the annual maintenance fee is 900 USD.

Same Day Formation. RMI business entities may be formed, and documents may be issued, within one (1) business day. Business entity formation requests must be made by a professional (e.g., an attorney, accountant, or corporate service company) to any worldwide IRI office.

Redomiciliation. Foreign entities can be redomiciled into the RMI which allows them to change their corporate jurisdiction and continue their existence as RMI entities

Documents required for Vessel /Yacht registration:

• Application for Official Number, Call Sign, and Registration of vessel / yacht.
• Proof of authority of agent or officer executing registration documents (e.g. Power of Attorney or Corporate Resolution).
• Proof of Ownership, such as a Bill of Sale or Builder’s Certificate.
• Consent of Government from present registry to transfer vessel / yacht or Cancellation Certification.
• Proof that the vessel / yacht is free of recorded liens and encumbrances (a foreign mortgage lien may accompany a vessel into the RMI Registry through a recordation).
• Proof of Liability Insurance, including owner’s repatriation obligations.
• Confirmation of Class issued by a Classification Society (not applicable for private yachts; for commercial yachts under 500 GT, a Certification of Survey or Statement of Compliance issued by an authorized surveyor will satisfy this requirement; applies to commercial yachts 500 GT and over).
• ISM / ISPS Code Declaration of Company and Designated Person or self-propelled vessels (not applicable for private yachts; applies to commercial yachts 500 GT and over).
• Application for Minimum Safe Manning Certificate (not applicable for private yachts).
• Within 90 days of registration, an Application for a National Radio Station License (not applicable for private yachts).

Commercial Vessel Registration. Seagoing vessels of any tonnage engaged in foreign trade are eligible for registration in the RMI. Vessels should be under 20 years of age at the time of registration; however, waivers may be granted for older vessels depending upon their condition and classification. Applications for vessels 15 years of age or older should be submitted with a Status Report of the vessel’s Statutory Survey and Certification and a copy of its latest Intermediate or Special Survey Report. Offshore drilling, production, or service units, and other seagoing vessels also engaged in the service sector of the offshore energy industry, are eligible for registration in the RMI, subject to the same age, survey, and classification requirements. The diversity of vessels in this category may require the RMI Registry to request additional information.

Private Yacht Registration. A private yacht is considered to be any pleasure yacht not on charter or carrying passengers for hire, not engaged in trade or commerce, and being used solely for the pleasure or recreational purposes of its owner. Registration of private yachts is limited to those of 12 meters or more in length overall. The RMI recommends the Commercial Yacht Code (MI-103) be used as minimum basis to measure the safety, lifesaving and fire-fighting appliances, manning, and Mini ISM of a private yacht. A US Cruising Permit can be obtained for RMI private yachts. RMI private yachts, of 18 m or more in length, can be chartered out for up to 84 days in a calendar year in accordance with local port regulations. An enhanced survey must take place prior to the permission to take charters. These yachts must comply with the MI-103, as appropriate.

Additional Documentation Requirements:

• Declaration of Private Use – Not for Hire (MI-127PY).

Survey Requirements:

• All classed private yachts of 20 years of age or less, regardless of tonnage and size, may, at the discretion of the Administrator, satisfy the pre-registration inspection requirements by submitting current, valid class and statutory certificates. In this case, a separate inspection will normally not be required; however, a current list of firefighting and lifesaving appliances shall be submitted for review.
• All unclassed private yachts, regardless of tonnage and size, are required to undergo a pre-registration inspection prior to registration under the RMI flag.
• For yachts less than 24m in LOA, the inspection shall be carried out by an AR or a Qualified Individual (QI).
• For yachts 24m LOA or more, an AR shall carry out the inspection.
• All private yachts over 20 years of age are subject to a pre-registration inspection prior to registration under the RMI flag.

Commercial Yacht Registration. commercial yacht us any yacht engaged in trade, commerce, or on charter, and not carrying more than 12 passengers. The registration of commercial yachts is limited to those of 24m or more in length overall. In addition to the requisite legal documents and government approvals, the RMI Registry places a high emphasis on the safe condition of the yacht at the time of registration. Unique to the RMI Registry is the requirement for an existing yacht to have a full “Suitability for Use” survey prior to registration. This is mandatory for commercial yachts less than 500 gross tons. Survey of the yacht against the MI-103 is carried out by either an Appointed Representative or Classification Society. Other national and international requirements apply to those commercial yachts 500 GT and over.

Manning Certificates. STCW and SOLAS require the issuance of a Minimym Safe Manning Certificate (MSMC). The MSMC must be issued to each vessel upon registration, setting forth the required minimum number of officers and crew, in specified grades and ratings, that have been prescribed for the safe navigation and operation of the vessel. Each vessel is considered individually, bearing in mind the size, trade, type of vessel, and automation. Once the manning level approved, and MSMC is issued. The vessel’s manning is verified for compliance with the MSMC during the vessel’s annual safety inspection.

Officer Licensing and Certification. No person shall perform the duties of Master, Chief Officer, Officer in Charge of a Navigational Watch, Chief Engineer, Second Engineer, Officer in Charge of an Engineering Watch, or Electrotechnical Officer of any vessel registered under the provisions of the RMI Maritime Act, unless duly issued a Certificate of Competence/ Endorsement (Coc / CoE) by the Administrator.

Issuance of RMI Officer Certificates is based on 2 methods:

1. by equivalency endorsement for individuals holding CoCs issued by one of the STCW 1995 “White list” countries recognized by the Administrator, or
2. by professional examination for applicants that have completed all necessary training and assessment requirements for the capacity desired.

Seafarer’s Identification and Record Book (SIRB). All persons serving aboard RMI flagged commercial vessels and commercial yachts are required to hold an RMI SIRB.

The SIRB is a seafarer's identity document issued for the purpose of providing the holder with identity papers for travel to or from an assigned vessel in accordance with ILO 185. It also provides the holder with a continuous record of his/her sea service and contains the Special qualification Certificates (SQCs), which specify the particular category or rating in which the holder is qualified to serve and any special qualification required for service on that vessel.

In order to qualify for an SQC, a seafarer must provide proof of the required sea service by attending and presenting a certificate of completion from an approved training course or presenting an equivalent certificate issued by his/her national government.

Classification and Statutory Survey and Certification. The RMI Registry has mandatory classification and statutory survey and certification requirements. Surveys are conducted by Classification Societies which are recognized by the Administrator as being in full compliance with IMO Assembly Resolution A.739 (18) for appointment as Recognized Organizations (ROs) and Recognized Security Organizations (RSOs). These Classification Societies issue statutory certificates based on internationally accepted standards.

The Administrator has the responsibility to ensure vessel and company compliance with applicable domestic and international law. Compliance is accomplished through:

• Interaction with the ROs / RSOs;
• Active investigation of casualties, port/flag State detentions, security breaches, port/flag State security detentions, and security incidents, among others; and
• Review of corrective actions taken by companies in response to RO/RSO audits.

Vessel Inspection Program. Nautical Inspectors and RMI Registry personnel, located worldwide, conduct mandatory annual safety inspections (ASIs) on commercial vessels. The purpose of the ASI includes:

• Verifying that the vessel is being maintained in general compliance with international conventions and flag State rules and regulations;
• Providing direct information on the condition of the vessel;
• Providing direct information on the vessel’s compliance with operational requirements and crew certification and training;
• Providing feedback to owners and operators that will help them avoid problems and unnecessary delays by port States; and
• Classification Society oversight.

The Administrator employs full-time inspectors to perform ASIs, conduct training and oversight of the contracted Nautical Inspectors, and to conduct special inspections.

Technical support is provided by a worldwide staff of qualified personnel with the primary responsibility of overseeing the implementation of the applicable national and international laws and regulations to vessels in the RMI Registry. Technical personnel evaluate requests for exemptions, equivalences, material / equipment dispensations, survey, and service extensions. Technical personnel also liaise with and maintain oversight of Classification Societies. Technical inquiries are processed and either an interim or final reply will be sent within 24 hours.