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Marshall Islands: Domestic Corporate Taxation

Corporate Tax Introduction

The Marshall Islands statutorily exempts all non-resident (i.e. offshore) companies from taxes. Any company formed through one of International Registries, Inc.'s worldwide offices is a non-resident Marshall Islands company. Thus, all foreign-owned companies and partnerships are exempt if they do not do business in the Marshall Islands.

This page of the site deals with taxation as it applies to domestic businesses only and has no effect on Marshall Islands non-resident ("offshore") companies.

The Government applies the same rules to foreign and local owners of domestic businesses and requires foreign investors to make an application, using a prescribed form, to the Social Security Administration to register their business and obtain a Tax Identification Number. The register is used to monitor the payment of taxes.

Local governments apply sales taxes, at rates between 2% and 4%.

To help meet its private sector objectives, the Government offers investments in selected sectors exemptions from paying taxes and duties. The exemptions are equally available to both non-citizen and citizen investors and can be applied for by submitting a letter to the Minister of Finance. Investors intending to establish in the following export-oriented sectors can be exempted from paying gross revenue tax for a five-year period:

  • Off-shore or deep sea fishing;
  • Manufacturing for export, or for both export and local use;
  • Agriculture;
  • Hotel and resort facilities.

In order to qualify for an exemption, the investor must make an investment of at least USD1.0m, or provide employment and wages in excess of USD150,000 per annum to citizen workers.

The government also offers investments in seabed hard mineral mining in the country's exclusive economic zone an exemption from paying all taxes, duties and other charges except taxes on wages and salaries, individual income tax and social security contributions. In order to qualify for the exemption investors must pay the Government a royalty, production charge or combination of production charge and a share of net proceeds accruing from the mining activity.

 

 

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