Limited Liability Companies (LLCs) have garnered global recognition for their remarkable ease and versatility. Originating in the United States, primarily Delaware, LLCs have made their way into many jurisdictions worldwide, both onshore and offshore. What makes LLCs so appealing is their ability to combine the best of both corporate and partnership structures while reducing administrative red tape.
Today, our focus turns to a jurisdiction we highly favor – the Republic of the Marshall Islands. Understanding how an LLC registered in this location can benefit your international banking and asset protection strategy is our objective. Additionally, we’ll delve into the special forms of LLCs permissible in the Marshall Islands.
In many respects, the classic Marshall Islands Business Corporation aligns with the conventional offshore company model, similar to those found in the British Virgin Islands or Belize. This means zero taxation and no mandatory annual financial reporting. However, the Marshall Islands LLC elevates this sophistication while maintaining a minimal management and compliance framework.
But why opt for the Marshall Islands for offshore incorporation? There are several compelling reasons:
1. Whitelisting and Information Exchange Compliance:
As of October 2019, the Republic of the Marshall Islands was removed from the EU’s offshore blacklist, and later, in 2020, it was excluded from the French domestic blacklist. The Marshall Islands diligently meets the European Union’s information exchange requirements. This compliance has significantly improved the jurisdiction’s reputation, making it an attractive option for businesses seeking a credible, whitelisted destination.
2. Thriving Shipping and Yacht Registry: Remarkably, the Marshall Islands is home to the world’s second-largest shipping and yacht registry, making it a pivotal player in the maritime industry.
3. Proactive Governance: The management of the Marshall Islands Companies Registry is vested in a proactive private company. Unlike some offshore island governments mired in bureaucracy and corruption, the Marshall Islands has steadily developed its offshore financial center into a business-friendly, globally compliant jurisdiction.
4. Versatility for Commercial Operations: A company registered in the Marshall Islands isn’t limited to offshore operations; it is suitable for regular commercial activities, especially online businesses.
5. Leveraging Advanced Legislation: The Marshall Islands’ legal framework was modeled after one of the most sophisticated and business-friendly sets of laws in the United States: Delaware’s business laws. The Marshall Islands (RMI) Limited Liability Company Act provides exceptional flexibility in the use of LLCs, offering opportunities that many other offshore jurisdictions lack.
In essence, an LLC in the Marshall Islands skillfully combines the benefits of a Limited Liability Partnership (LLP) and an International Business Corporation (IBC). It grants you managerial flexibility and shields founders from personal liability. Founders can choose a structure that resembles either an LLP or a corporation, depending on their preferences.
Notably, the Marshall Islands imposes no minimum capital requirements for LLCs. With as little as 100 USD, you can establish an LLC. Marshall Islands LLCs have developed a stellar reputation, particularly for online businesses, private venture capital, and a range of services.
Choosing between an LLC or an SLLC
One of the distinctive highlights of LLCs registered in the Marshall Islands is the provision to establish a Series Limited Liability Company (SLLC). While this option may be less known in the offshore industry, it showcases the degree of flexibility the Marshall Islands LLC instrument offers.
An SLLC is essentially an LLC with independent series, units, or subdivisions. Each series is liable only to the extent of its share in the total authorized capital of the LLC. These units can have separate bank accounts, distinct managerial staff, and conduct unrelated business activities. Each unit can have its assets, risks, and operations, all contained within a single legal entity.
The relationship between these units can mimic either a partnership or a stock corporation, offering incredible flexibility. Units can even become creditors to one another, running independent commercial operations and financial ledgers. In essence, the SLLC operates as a holding company with autonomous, subordinate units, all within a single legal entity.
This structure is especially beneficial for industries like shipping, where each vessel can be owned by a separate unit, limiting risks.
The applicability of SLLCs isn’t limited to maritime operations; it is also a strategic choice for real estate and various other business sectors. An SLLC offers an invaluable solution for separating the operations of one business unit from another within one legal entity.
Choosing a Company Name
In the Marshall Islands, LLCs can be registered with names in any language, provided they use Latin letters. However, it is advisable to offer alternative names during registration to prevent potential delays. The company name must conclude with “Limited Liability Company” or its abbreviations, such as LLC or L.L.C. Certain terms, like “Bank” or “Insurance,” are prohibited in LLC names, a common restriction in most offshore jurisdictions.
Since 2018, the Republic of the Marshall Islands has instituted robust regulatory measures aimed at enhancing transparency and regulatory compliance for companies registered within its jurisdiction. Under these stringent regulations, companies operating within the Marshall Islands are subject to rigorous annual compliance checks, which include verification and validation of critical corporate information, and details related to the company’s beneficial owners, directors, shareholders, and financial standing. The regulatory authorities in the Marshall Islands take these compliance checks seriously.
Setting Up and Annual Costs
The cost of establishing an offshore company in the Marshall Islands starts at $2,750. This includes registration, state fees, registered agent services, a registered office, original corporate documents, and global courier delivery. Annual renewal costs are $2,250, covering state fees, registered agent services, and the registered office.
Additional Services and GDPR Compliance:
For enhanced personal data security, professional management and trustee membership services are available upon request. Companies are also required to comply with GDPR regulations, necessitating consent for the processing of personal data.
Please visit our site to explore additional services, ranging from offshore bank account setup, getting foreign citizenship, or starting a company in another country to vessel and yacht registration and purchasing real estate abroad.