In a time of economic challenge, business leaders need an efficient and supportive relationship with their corporate domiciles, and the Corporate Registry of the Republic of the Marshall Islands prides itself on offering both. Long a domicile of choice for business entities, particularly those involved in international shipping, the Marshall Islands constantly evolves and adapts to ensure that it stays at the forefront of the international business community’s needs. Coupled with an expanding network of offices around the globe, the Marshall Islands continues to address the needs of its corporate citizens.
The Registry has witnessed dynamic growth in recent years, largely attributable to the Marshall Islands’ modern and responsive corporate law. In keeping with its reputation for innovation, the Government of the Marshall Islands has recently amended the Associations Law to create an exception to the appraisal rights of dissenting shareholders of Marshall Islands publicly traded companies during consolidation or merger. The new section, 100(c) of the Business Corporations Act (BCA), now provides that, on merger or consolidation, the price for the shares of dissenting shareholders may be pre-fixed through either the prospectus, Articles of Incorporation or resolutions for the issuance of the subject shares. This amendment to the BCA brings the Marshall Islands Associations Law in line with the corporate laws of New York and Delaware.
This is only the latest change in an ongoing strategy to support corporate clients that began nearly 20 years ago when International Registries, Inc. (IRI) became the Maritime and Corporate Administrators of the Republic of the Marshall Islands. The philosophy from the outset was to offer world class registration and customer services that are second to none.
That goal has largely been accomplished by IRI through the decentralisation of its operations. With 20 offices worldwide, clients are able to contact a corporate specialist at any time who can register a new corporation, issue certificates of good standing, file an amendment or answer client questions.
With the Associations Law modelled on US corporate law, the Marshall Islands offers several advantages, including:
free redomiciliation – migration of domicile, permitted both into and out of the jurisdiction;
low administrative costs;
same day formation and filing of corporate documents;
simple maintenance with no annual filings, no notarisation requirements and permitted facsimile filings;
confidentiality of shareholders, members, limited partners, directors, managers and officers;
standard Articles of Incorporation available in English, Chinese, French, Portuguese, Russian and Spanish;
capital expressed in any currency;
political stability; and
a staff of attorneys that is available to respond to inquiries regarding business entities.
Decentralisation is Critical to Success
Decentralisation of operations has been a hallmark of the Marshall Islands Registry from its inception, and while IRI’s offices are located in worldwide maritime centers, many of those locations are also key business centres. With its roots in the maritime industry, the Marshall Islands Maritime Registry, the fourth largest open registry in the world, has over 2,000 vessels registered comprising more than 52 million gross tons. Additionally, the Marshall Islands Maritime Registry enjoys an excellent reputation for service and quality and is listed on both the Paris and Tokyo Memorandums of Understanding white lists and the United States (US) Coast Guard Qualship 21 roster.
IRI’s specialists in these full service offices are local professionals, hired because of their knowledge and expertise with the local business and maritime communities. IRI’s decentralised operations are enhanced by a 21st century communications system that links all of the Registry’s offices. In addition to each office being linked to a fully backed up database, many of the offices are also linked by satellite-based video conferencing capabilities that allow issues to be dealt with quickly and pro-actively.
Cutting Edge and Globally Accepted Rules
As with the most recent change to the BCA, which was amended to ensure easy completion of mergers and consolidations of publicly traded entities, the Registry constantly works to keep the Marshall Islands Associations Law, originally adopted in 1990, in step with the latest developments in corporate governance. This is accomplished largely because IRI’s attorneys work closely with clients and the Government of the Marshall Islands.
IRI’s attorneys are available to respond to enquiries regarding corporate and maritime matters in the Republic of the Marshall Islands. While IRI, as a corporate service company, cannot give legal advice, its attorneys can provide information and guidance on Marshall Islands corporate and maritime law, vessel and yacht registration, forming a foreign maritime entity and preparing and filing corporate documents.
IRI: A History of Service
IRI and its group of affiliated companies have been administering maritime and corporate registries since 1948 and offer a complete line of corporate and maritime services. Through a legislatively endorsed joint venture with the Government of the Republic of the Marshall Islands, IRI and its affiliates have administered the corporate and maritime programs of the Republic of the Marshall Islands since 1990.
A German possession until World War I, the Republic of the Marshall Islands was controlled by Japan between the World Wars. After World War II, they became a trust territory of the United Nations under United States administration until becoming an independent nation in 1986. In 1991, the Marshall Islands became a full member of the United Nations.
The Marshall Islands maintains a politically stable, democratically elected parliamentary system of government. The Constitution, signed in 1979, is a blend of American and British models of government and the official language is English. The Marshall Islands has enjoyed political stability since its independence as a nation, attained in 1986.
Under the Marshall Islands’ parliamentary system, the legislature, known as the Nitijela, elects a President from among its members. In turn, the President nominates a Cabinet of six-to-ten members. The judicial system consists of local courts whose judges are appointed by the Cabinet. The court system is comprised of local courts of first instance, a Traditional Rights Court with jurisdiction over real property matters and a High Court with corporate and maritime jurisdiction. Appeals may be brought before the Supreme Court in all cases.
Agriculture and tourism are the mainstays of the economy. The most important commercial crops are coconuts and breadfruit and small scale industry is limited to handicrafts, copra and tuna processing. The principal trading partners are the US, Japan and Australia.
Air transportation is facilitated by two international airports, plus airstrips scattered throughout the larger islands. There are twelve deepwater docks for large ocean-going ships. Excellent international communications are provided by satellite links for telephone, fax and telex.
First enacted in 1990, and continually updated, the Marshall Islands corporate law is one of the most modern in the world. Although based on US corporate law, the Marshall Islands law contains unique provisions enabling the use of British-style corporate management. In addition, there are no requirements to have corporate documentation authenticated by a consular official.
In 1996, the Marshall Islands enacted its Limited Liability Company (LLC) Act modeled after the Delaware LLC law in the US. LLCs formed under the Act provide a cost-efficient way to maximise profits while minimising liability in a completely confidential environment.
In 2005, large scale amendments were made to the Marshall Islands Associations Law including amendments to the BCA, Limited Partnership Act and LLC Act. In addition to these amendments, the Partnership Act was repealed and a new act, the Marshall Islands Revised Partnership Act, which is based on the Delaware Revised Partnership Act, was adopted.
Professionals worldwide have recognised the Marshall Islands’ ability to aggressively and efficiently address the key issues facing the corporate industry. As governments and international organisations join forces to impact offshore entities, it has become increasingly difficult for a jurisdiction to retain the elements that make an offshore corporate program successful. The Marshall Islands, however, has met these challenges head-on while maintaining its fundamental elements, making it the corporate jurisdiction of choice for many professionals.
The Marshall Islands ship registry program was initiated by the Marshall Islands Government in 1988. With the adoption of a new Maritime Act in 1990, the maritime laws of the Republic were brought in line with the many changes in ship registration, regulation, financing and licensing which had occurred in the shipping industry.
In addition, the Marshall Islands has adopted groundbreaking legislation that permits the registration of a vessel that is still subject to a recorded mortgage in its present country of registry. This legislation provides for the continuation of the preferred status of the mortgage without interruption; thus, the foreign mortgage lien accompanies the vessel into the Marshall Islands Registry.
Vessels and yachts may be registered if owned by a Marshall Islands citizen, national, corporation, limited or general partnership, LLC or a foreign maritime entity qualified in the Marshall Islands.