How to Register a Business in the US from Marshall Islands

Step 1: Benefits of starting your US business from Marshall Islands

Starting a US business from the Marshall Islands offers numerous advantages that entrepreneurs and investors find incredibly appealing. One of the most significant benefits is the favorable tax environment. The Marshall Islands has a reputation for having low taxation, and in some cases, no taxes on certain types of business income. This can result in substantial savings and greater profitability for businesses operating from this jurisdiction. Additionally, the ease of incorporating a business in the Marshall Islands, coupled with the stable political and economic landscape, provides a reliable foundation for long-term business operations.

Another outstanding benefit is the strategic geographical location of the Marshall Islands, which serves as a gateway between the US and Asia-Pacific markets. This position facilitates easier access to a broader customer base and can enhance trade opportunities. Business owners also appreciate the confidentiality and anonymity offered in the Marshall Islands, which can protect their personal and business information. Furthermore, with a robust legal system that supports international business, entrepreneurs can confidently establish and grow their ventures knowing they are backed by comprehensive legal protections.

Step 2: How to start your US business from Marshall Islands

Starting a US business from the Marshall Islands involves several key steps that are essential for establishing a legitimate presence in the US market. Firstly, you will need to choose the type of business entity that best fits your needs, such as a Limited Liability Company (LLC) or a Corporation. Each type has its own benefits and legal implications. After selecting the appropriate business structure, you must register your business with the relevant state authorities in the US. This often involves filing Articles of Incorporation or Articles of Organization.

Obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) is a crucial next step. The EIN acts like a social security number for your business and is necessary for tax purposes, opening a business bank account, and hiring employees. Additionally, ensure you comply with state-specific licensing and zoning regulations, which can vary significantly. Engaging with a US-based legal or business consultant can greatly facilitate the process and help navigate the complexities of US business laws. Lastly, consider setting up a US bank account to manage transactions more efficiently and to establish credibility with US vendors and customers.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Marshall Islands

Understanding Compliance Requirements for Running a US Business in the Marshall Islands

When expanding your US-based business to the Marshall Islands, it’s crucial to understand the unique compliance requirements that come into play. The Marshall Islands offer a favorable business environment, but this comes with its own set of regulations and standards that must be adhered to. Below are key considerations to keep in mind.

1. Business Registration

Before conducting any business activities, you need to properly register your enterprise with the Marshall Islands Registrar of Corporations. This process typically involves:

• Choosing a business name and ensuring it's unique in the registry
• Filing the necessary incorporation documents
• Paying registration fees

2. Legal and Regulatory Compliance

Understanding the legal framework is vital for compliance. Key legislation includes:

1. Corporations, Partnerships and Fiduciaries Law: Governs the formation and operation of business entities.
2. Bankruptcy and Insolvency Law: Outlines the processes for managing financial distress.
3. Employment and Labor Laws: Regulations related to workforce management and employee rights.

3. Taxation

The Marshall Islands have specific tax obligations for businesses. Consider the following tax-related aspects:

• Corporate Taxes: Different tax rates may apply based on the type and structure of your business.
• Import and Export Duties: Applicable to goods entering or leaving the country.
• Local Levies: Some local jurisdictions may impose additional business taxes or fees.

4. Environmental Regulations

The Marshall Islands are particularly sensitive to environmental issues. Businesses must comply with:

• Environmental protection laws specific to the region
• Waste management and disposal regulations
• Regulations protecting marine and wildlife environments

5. Partnerships and Local Relations

Building strong local partnerships can aid in navigating the complexities of operating in the Marshall Islands:

• Partnering with local businesses familiar with the regulatory landscape
• Engaging with local legal and business consultants for compliance guidance

6. International Standards

Finally, it's crucial to ensure your business adheres to international standards, especially if it involves cross-border trade. This includes compliance with:

• International maritime laws if you're involved in shipping
• Global anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations

In summary, while expanding your US-based business to the Marshall Islands can offer several advantages, navigating the compliance landscape requires careful planning and adherence to local and international laws. By understanding these key considerations, you can ensure a smooth and successful business operation.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Marshall Islands

Understanding Tax Obligations for Running a US Business in Marshall Islands

When operating a US business in the Marshall Islands, there are several tax considerations that must be taken into account to ensure compliance and optimize financial planning. This article outlines key aspects to help business owners navigate their tax obligations effectively.

1. Types of Taxes in the Marshall Islands

The Marshall Islands primarily levies the following types of taxes:

• Corporate Income Tax: Similar to many other jurisdictions, the Marshall Islands imposes a tax on corporate profits.
• Value Added Tax (VAT): Businesses may be subject to VAT on goods and services provided within the islands.
• Withholding Tax: This applies to certain types of income paid to non-residents, such as dividends, interest, and royalties.

2. Tax Treaties and International Agreements

One important consideration for US businesses in the Marshall Islands is the presence of international tax treaties. These treaties can influence tax rates and help avoid double taxation. It's essential to understand the existing treaties between the US and the Marshall Islands to take full advantage of any benefits.

3. US Tax Obligations

US businesses operating in the Marshall Islands must also fulfill their home country tax obligations:

• Foreign Income Reporting: US businesses must report foreign income to the IRS, which includes profits earned in the Marshall Islands.
• Foreign Tax Credit: The US offers a foreign tax credit to mitigate double taxation on income that has already been taxed by the Marshall Islands.
• Transfer Pricing: Compliance with US transfer pricing rules is necessary to ensure fair pricing between related entities in different countries.

4. Local Compliance Requirements

Operating in the Marshall Islands also requires adherence to local tax filing and payment deadlines. This includes timely submission of corporate tax returns and VAT returns. Ensuring compliance with local regulations avoids penalties and legal complications.

5. Engaging with Local Tax Advisors

Given the complexity of international tax law, it is highly advisable to engage with local tax advisors in the Marshall Islands. These professionals can provide insights into local tax regulations and assist in strategic tax planning to optimize tax liabilities.

In conclusion, understanding the tax obligations for running a US business in the Marshall Islands involves navigating local tax laws, international tax treaties, and US tax requirements. By staying informed and seeking professional advice, businesses can ensure compliance and make informed financial decisions.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country