You probably know little about the Marshall Islands because the jurisdiction does not participate in any scandals and produces no sensations. However, a company registered in the Marshall Islands can be an efficient instrument for optimizing your tax burden.
The global campaign against tax evasion has affected the Marshall Islands. Unfortunately, the jurisdiction is on the EU black list in 2023 along with a few other countries. This was to be expected because the Marshall Islands do not tax income made abroad. This is certainly good news for international companies registered there.
Q Wealth experts will be delighted to assist you with registering an offshore business company remotely and securely!
FREE EXPERT CONSULTATION
on which jurisdiction is best for
your business, preferred tax regime,
company structure.
on which jurisdiction is best for your business, preferred tax regime, company structure.
Taxes in the Marshall Islands for residents and non-residents
Income made in other jurisdictions is not taxed in the Marshall Islands. This is the main factor that attracts foreign business people to the island state.
Taxes for non-residents in the Marshall Islands
The following taxes are fees are NOT payable in the Marshall Islands by non-residents of the jurisdiction including corporate entities:
- Capital gains tax;
- Dividend tax;
- Tax on royalties;
- License fee
- Registered trademark fee;
- Corporate tax on foreign income.
The following taxes and fees are payable in the Marshall Islands by non-residents:
- Corporate tax on domestic income (income made within Marshall Islands) – 10%.
- Annual company registration fee – please inquire with our experts about the amounts because they can be different for different types of companies.
With our professional assistance, you can register an international business company in the Marshall Islands without paying a personal visit to the remote country.
Taxes for residents in the Marshall Islands
The table below provides the tax rates applicable to residents of the Marshall Islands:
| Tax | Amount |
| Corporate tax | 3% if the income exceeds $10,000 per year0.8% if the income is less than $10,000 per year. |
| Social security tax | 8% but not more than $10,000 per quarter |
| Medical insurance (payable by the employer) | 3.5%, but not more than $5,000 per quarter |
| Customs duties | From 0% to 20% |
| Payroll tax | 8% — $10,400;12% — $10,401. |
| Tax on lease of property | 3% |
| Personal income tax | From 8% to 12% |
| VAT | From 2% to 4% |
If the income of a person does not exceed 5,200 US dollars per year, the first 1,040 dollars is tax-free.
Open a company in the Marshall Islands to optimize taxes and expand your international business operations!
Penalties for tax evasion in the Marshall Islands
A non-resident who fails to file the tax return or pay the taxes will face the following penalties in the Marshall Islands:
- Restraining order for participating in court hearings and using governmental services in the Marshall Islands;
- License cancellation (if applicable);
- Fines:
- If the taxpayer fails to file a tax declaration on time, the fine is 25% of the tax amount;
- If the taxpayer evades taxes, the fine is 50% of the tax amount.
If you are interested in offshores, please follow the link to find out about offshore islands, countries, and territories available in 2023. They offer significant tax benefits!
Economic substance requirements in the Marshall Islands
Since July 1, 2020, all companies registered in the Marshall Islands have been obliged to have economic substance in the country. This is a result of the international pressure applied to offshore jurisdictions.
There is a special online portal that company owners can use to submit the economic substance reports. The first report is due after the first year of the company’s existence. Thus, if you open a company in the Marshall Islands on November 1, 2023, the economic substance report will be due on November 1, 2024. Afterwards, an economic substance report has to be submitted every year.
When you log onto the Internet portal, you will find several questions and all you have to do is to tick the ‘yes’ or ‘no’ icon. You may also have to upload certain documents. All non-resident companies shall fine economic substance reports in the Marshall Islands. The requirement applies to foreign marine companies as well.
Please note that all foreign companies registered in the Marshall Islands have to prove tax residency in another jurisdiction. You have to submit your taxpayer’s number, your taxpayer certificate, and receipts confirming payment of taxes.
Conclusion
Notwithstanding the pressure on the part of European and global financial regulators, the Marshall Islands has been able to keep the advantages that offshore jurisdictions are famous for. In particular, income made outside the territory of the Marshall Islands (which is extremely small, by the way) is not taxed and the corporate tax rate on domestically obtained income is very low. In addition to that, the recent changes to the country’s legislation are going to make it one of the leading centers of the blockchain industry in the near future.
Opening a company in the Marshall Islands in 2023-2024 is as easy as it used to be before. The economic substance requirements are гnot too tough and a bank account for your offshore company can be opened in other low-tax jurisdictions.
Are you looking to lessen your tax burden by registering a company in the Marshall Islands? Please contact us and request a professional consultation on the matter with our experts.
Is there a VAT in the Marshall Islands?
Yes, there is. The residents of the jurisdiction pay the VAT at the rates from 2% to 4%.
What is the corporate tax in the Marshall Islands?
For resident companies, the corporate tax is 0.8% if the yearly profit does not exceed US$ 10,000 and it’s 3% if it does. For non-resident companies, the corporate tax is 0% if the income is made abroad and it’s 10% if the income is made on the territory of the Marshall Islands.
