Incorporating an International Business Company (IBC) is a big challenge for any entrepreneur. Depending on which market to enter, business owners have to deal with difficulties and cultural differences that can lead to endless hurdles.
In recent years, the Republic of Marshall Islands has become a sought-after offshore destination for IBC and entrepreneurs worldwide due to its unique advantages and favorable business environment.
Let’s take a quick look at how you can successfully get an IBC started in the Marshall Islands.
1. Overview of the Marshall Islands IBC
An International Business Company (IBC), also known as Non-Resident Domestic Corporation (NRDC), is considered one of the most used offshore entity types in the Marshall Islands.
The Marshall Islands is a considerably well-known and successful offshore financial center, providing sustainable corporate programs and user-friendly IBC legislation that have attracted thousands of entrepreneurs worldwide.
According to the Marshall Islands Business Corporation Act, an IBC can conduct any legitimate entrepreneurial activity in the Marshall Islands, except a few restrictions concerning the business of granting insurance policies or assuming insurance risks, trust services, or banking.
Being treated as a separate legal entity, a Marshall Islands’ IBC is commonly used for a variety of purposes such as
- an international trading company;
- an international joint venture; or
- a holding company structure for owning intellectual property, real estate, or patents and trademarks.
2. Advantages of an IBC in the Marshall Islands
To understand the reason why entrepreneurs should start an IBC in the Republic, it is crucial to look at the advantages associated with this type of entity.
- Foreign ownership
The IBC structure allows foreign individuals and enterprises to completely own the available shares of the company.
- Limited liability
The shareholders’ liability in an IBC is typically limited to their capital investment.
- Minimum reporting requirement
An IBC is required to keep and maintain accounting records but is not obliged to file an annual account or tax returns. The only report that an IBC has to submit annually is the Economic Substance report.
- High level of confidentiality
As there is no requirement for reporting, the details of IBCs’ shareholders and directors are not open to the public.
The information of IBCs’ beneficial owners, directors, and shareholders is protected by law and can be maintained anonymously through the use of nominee services.
Business owners can be assured that their information will not be submitted to the government or disclosed in any public records.
- Tax advantages
If an IBC does not conduct its business in the Marshall Islands, it is exempt from all local taxes including corporate tax, asset tax, stamp duty, exchange controls, etc.
Furthermore, any interests, dividends, payments, etc. made by an IBC to another IBC or to individuals or entities which are not citizens of the Republic, will be exempt from withholding provision under the law.
In place of taxes, IBCs in the Republic are required to pay a fixed government fee, as well as a registered agent fee annually.
3. Key elements of the Marshall Islands IBC
International entrepreneurs who are looking to start an international business company in the Marshall Islands need to know the basic features of this entity type, which are listed below:
- Share capital
There is no requirement on the minimum share capital for an IBC but at least one share must be paid up. The standard authorized amount of share capital for IBCs in the Republic is normally US$50,000.
- Directors and secretaries
An IBC is generally managed by the Board of Directors. Nominee directors are permitted in the Republic of the Marshall Islands.
The minimum number of directors for IBCs is one, who can be either:
(1) a citizen who resides in any country;
(2) a legal entity (for example corporations, LLCs, trusts, etc.); or
(3) a natural person.
It is required for an IBC to appoint a company secretary, who can be either a natural person or a body corporate. The company secretary can be of any nationality and is not necessarily required to be a resident of the Republic.
- Registered office and agent
An IBC in the Marshall Islands is required to notify the Registrar of its registered office and address. Additionally, a registered agent must ensure that the IBC has an assigned representative at a confirmed address who will receive legal notices on behalf of the IBC.
- Annual general meeting
The IBC’s annual general meeting can be held anywhere, even outside the Marshall Islands, via telephone or other means of communication.
- Financial statements
Although there are no specific requirements to file financial statements with the Republic’s authorities, an IBC is required to maintain its records to reflect the financial position.
4. How to start your IBC in the Marshall Islands
To successfully get an IBC started in the Republic, entrepreneurs need to follow the 3 steps below:
Step 1: Choose a company name
The name of a Marshall Islands IBC shall follow the requirements below:
- It should contain the word ‘corporation’, ‘incorporated,’ ‘company,’ or ‘limited’ or an abbreviation, suffix, or prefix that indicates it is a corporation as distinguished from a natural person or partnership;
- It should be unique and not be identical to the name of any other existing corporation maintained by the Registrar;
- It should not include any confusion, misleading, or offensive indication.
Our name check tool allows you to check if your desired name is unique for the Marshall Islands’ IBC. Check it out now!
Step 2: Prepare Articles of Incorporation
An IBC can be incorporated by submitting Articles of Incorporation to the Registrar. The standard articles should contain the following information:
- the company’s name and date of incorporation;
- the company’s activities and purposes, which must be sufficient and associated with lawful act;
- the registered address as well as the name and address of the company’s registered agent;
- the number and detailed information of authorized shares that the company may issue (values, types, classes of shares, etc.)
- the provision for elimination or limitation of personal liability of a director and shareholders.
The articles of incorporation must be signed and acknowledged by the company’s shareholders and filed with a Registrar or Deputy Registrar of Corporations.
Step 3: Receive Certificate of Incorporation
After filing the article of incorporation, it normally takes about 1-2 weeks to receive notifications from the Registrar. If the Registrar approves the article of incorporation, a certificate of incorporation shall be issued.
The certificate contains information such as company name, registration number, registration date, and is sealed and stamped by the official body.
If you file an application online, the certificate of incorporation will be generated electronically and available once the application is fully completed.
5. Start your IBCs with BBCIncorp now
At BBCIncorp, we utilize a rapid and simple procedure that helps you incorporate an IBC in no time, without the burden of paperwork or waiting hassles.
Our bespoke team of consultants is more than happy to help you with any concerns or questions you may have.