I’ve been negative about The Marshall Islands in the past, the ever-changing crypto regulation landscape has led me to revisit RMI as a outpost of growing cryptocurrency endeavors.
About
The Marshall Islands (RMI) is a nation located in the central Pacific Ocean. Comprising 29 coral atolls and five single islands, it forms a unique archipelago. The country gained independence from the United States in 1986 and is now a sovereign nation with its own government.
The Marshall Islands is known for its pristine beaches, crystal-clear waters, and diverse marine life. It is home to numerous endemic species and is a popular destination for diving and snorkeling enthusiasts. The Marshallese people have a rich cultural heritage, with traditions that are deeply rooted in their seafaring history. While facing challenges such as rising sea levels and limited resources, the Marshall Islands is recognized for its efforts in advocating for global climate change action, as well as its unique political status as a Compact of Free Association with the United States.
Corporate Structure
The Marshall Islands International Business Company (IBC), also referred to as a Non-Resident Domestic Corporation (NRDC), is highly regarded as the primary and widely favored offshore company formation option in the country. This designation holds immense appeal due to its distinct advantages, providing Marshall Islands offshore companies with an unparalleled range of business opportunities.
Notably, a Marshall Islands company has the remarkable capability to go public, secure capital, engage in third-party trading, serve as an investment advisor, and partake in various business activities except for banking, trust, insurance, or gaming. This flexibility allows for diverse ventures and positions the Marshall Islands as an attractive destination for offshore business endeavors.
A Non-Resident Domestic Company operates under the jurisdiction of the Business Corporations Act, which falls under the Marshall Islands Associations Law of 1990. One key advantage is that non-resident companies are exempt from local tax obligations. The Marshall Islands has developed a modernized corporate law that incorporates elements from both the United States and the United Kingdom, establishing it as a top-tier offshore financial center.
Furthermore, the Marshall Islands boasts exceptional legislation for asset protection and has consistently declined to enter into tax information exchange agreements with the OECD. Non-Resident Companies are not obligated to file audited accounts, annual returns, or provide financial records. Additionally, confidential information such as the identities of owners and shareholders is safeguarded and not required to be disclosed.
RMI DAO Structure
In a significant milestone, the Marshall Islands achieved a groundbreaking development in February, 2021 by officially recognizing decentralized autonomous organizations (DAOs) as legitimate entities.
The Marshall Islands implemented revisions to its Non-Profit Entities Act 2021, enabling any DAO to undergo registration and commence operations within the country. These amendments have paved the way for DAOs to incorporate as nonprofit limited liability companies (LLCs) and establish bylaws and membership structures that can be securely recorded on the blockchain.
To facilitate the registration process for DAOs, the Marshall Islands partnered with MIDAO Directory Services Inc., a local organization dedicated to assisting other DAOs in registering within the Republic. This collaboration resulted in the successful registration of the first-ever legal DAO named Admiralty LLC for Shipyard Software, a decentralized finance (DeFi) infrastructure developer.
RMI as an Offshore Destination
The Marshall Islands Business Corporations Act provides a noteworthy benefit for International Business Companies (IBC) or Non-Resident Companies by exempting them from local taxation. Establishing offshore bank accounts in conjunction with a company is also a viable option, with non-residents facing minimal complications.
The corporate legislation permits the utilization of offshore entities for nearly all types of business ventures, with only a few exceptions. This attractive environment has attracted a substantial influx of foreign investment and businesses to the islands since 1990, seeking to leverage the favorable market conditions. What sets the Marshall Islands apart from other offshore jurisdictions is the corporate legislation’s unique provision that allows companies to go public, raise capital, and engage in third-party trading.
In addition to its enticing tropical climate, the absence of tax information-sharing agreements and the presence of robust confidentiality laws further contribute to the Marshall Islands’ popularity as a preferred choice for individuals and companies seeking to establish an offshore presence in the South Pacific.
RMI & Cryptocurrency
While RMI has issued its own digital currency, SOV, it has not implemented any specific regulations governing crypto businesses, making it one of the few remaining unregulated outposts in the world.
Conclusion
Given the lack of regulation and a general favorability towards cryptocurrency, The Marshall Islands is a quick and cost effective setup for early stage ventures that are seeking to “test the waters,” establish proof of concept or merely keep initial setup costs low.
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About Adam Tracy
Adam Tracy is a payments expert and entrepreneur who specializes in payment systems, blockchain technology, digital currencies, and other emerging technologies. He is the founder of Blockrunner, LLC that provides consulting services to clients in the blockchain, payments and cryptocurrency arenas.
Tracy has been involved in the payments industry as an attorney, consultant and entrepreneur since 2005, while he was become an expert in blockchain and cryptocurrency since its advent in 2013. Tracy has worked with a wide range of clients, including startups, established businesses, and investor – both in the United States and worldwide. He has advised clients on a wide range of compliance, legal and operational issues related to payment transfer systems, crypto token generation and architecture, cryptocurrency exchanges, regulatory licensing, smart contracts, and other blockchain applications.
In addition to his consulting work, Tracy has founded several companies in the payments, blockchain and cryptocurrency space, including a digital asset hedge fund, licensed electronic money institution and a blockchain-based tokenization platform. He is also a proponent of decentralized finance (DeFi) and has been involved in various DeFi projects.
Tracy is also a frequent speaker and writer on blockchain and cryptocurrency topics. He has been featured in a wide range of publications, including Forbes, Hollywood Reporters, CNBC, Reuters, CoinDesk, and Bitcoin.com.
Find Adam: https://linktr.ee/adamtracy
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