Marshall Islands: Country and Foreign Investment
Foreign Investment Regime
The Government of the Republic of the Marshall Islands is particularly interested in encouraging private investment in its fisheries, tourism, manufacturing and agriculture sectors, and is actively seeking direct foreign investment to assist the country meet its goals.
The Government has established the Trade and Investment Services Division under the Ministry of Resources and Development to be responsible for investment promotion and the provision of investor facilitation services.
The Division provides information on investment conditions and data on the cost of doing business in the country and investment related authorization procedures. It assists in arranging meetings with government officials, and identifying local private consulting, accounting and legal services to assist investors comply with the various approvals required in order to establish and operate their business activities.
The Government requires all non-citizen investments to obtain a Foreign Investment Business License (FIBL). A non-citizen investment is defined as having any level of its equity held by a non-citizen (i.e. foreign citizen, corporation, joint venture, partnership or other legal entity). The FIBL can be obtained by making application to the Registrar of Foreign Investment in the Office of the Attorney General using a prescribed form.
The Government requires non-citizen investments to either incorporate as a domestic limited company in the Republic of the Marshall Islands, or register as a foreign entity, which can be a limited company, partnership or sole proprietorship.
In general, non-citizen investment from all countries is equally welcome and unrestricted in the Republic of the Marshall Islands. Certain sectors, however, have been reserved for citizen investment. These sectors are specified in a Reserved List:
- Small scale agriculture for local markets;
- Small scale mariculture for local markets;
- Bakeries and pastry shops;
- Motor garages and fuel filling stations;
- Land Taxi Operations, not including airport taxis used by hotels;
- Rental of all types of motor vehicles;
- Small retail shops with a quarterly turnover of less than US$ 1,000.00 (including mobile retail shops and/or open-air vendors/take-outs);
- Laundromat and dry cleaning, other than service provided by hotels/motels;
- Tailor / sewing shop;
- Video rental;
- Handicraft shop;
- Delicatessen, Deli Shop or Food take-out.
The Government is committed to maintaining its marine resources, primarily to ensure food security. Tuna is the only resource for which industrial-scale fisheries is promoted. Priority is given to increasing the returns accruing from this fishery by encouraging domestic-based production, processing and exports of tuna products. Domestic-based fishing investments, both non-citizen and citizen owned, intending to fish for tuna in the Republic of the Marshall Islands exclusive economic zone must negotiate a fishing license agreement with the Marshall Islands Marine Resources Authority (MIMRA).
The Government similarly requires any investor interested in exploiting or culturing marine resources in its coastal waters to obtain a license from MIMRA.
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;
- Hotel and resort facilities.
In order to qualify for an exemption, the investor must make an investment of at least US$1.0m, or provide employment and wages in excess of US$150,000 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. All investors are required to notify the Environmental Protection Agency (EPA) prior to commencing any development to determine if an EIA is necessary.