Starting a Business Abroad as an Expat: The Unique Case of Entrepreneurship in the Marshall Islands

Published on April 28, 2026 and written by Cyril Jarnias

Setting up in the Marshall Islands with an entrepreneurial project is not just about changing the scenery for a turquoise lagoon. It means entering a micro-economy dependent on U.S. aid, with a sophisticated business law framework for offshore activities, but fragile infrastructure for local operations. For an expatriate, the gap between the strength of the international financial center and the reality on the ground is striking.

Good to know:

This guide details the practical aspects of setting up and running a business in the Marshall Islands for an expatriate: legal framework, types of companies, licensing procedures, constraints related to land ownership, tax regime, bank account opening, and daily life. It offers a balanced analysis of the territory’s opportunities and limitations.

Understanding the Economic and Legal Context Before Getting Started

The Marshall Islands is a sovereign Pacific nation with about 60,000 residents, a tiny economy (just over $200 million in GDP), and heavy reliance on U.S. aid under the Compact of Free Association. Government revenue comes largely from these subsidies, supplemented by fishing fees, ship registry licensing, and a relatively simple but inefficient tax system.

Tip:

The country uses the U.S. dollar as its official currency and has no central bank. Its legal system is a mix of American and British common law, combined with local statutes. For a foreign investor, this offers a familiar legal framework if you know Anglo-Saxon business law. However, you must contend with an under-resourced administration and laws that are sometimes difficult to obtain.

The government shows a willingness to support private investment, especially in fishing, tourism, renewable energy, agro-aquaculture, logistics, or light manufacturing. In practice, foreign direct investment remains marginal: just a few million dollars per year. This gap between rhetoric and actual flows reflects a business climate where practical obstacles (infrastructure, land, market size, cost of energy) weigh heavily.

Two Entrepreneurial Worlds: International Offshore and Local Activity

In the Marshall Islands, foreign entrepreneurship plays out on two radically different stages that coexist under the same flag.

The Offshore Hub: International Companies and Maritime Registry

The country has become a significant center for registering international companies (International Business Companies, Non-Resident Domestic Corporations) and for the ship registry. This sector is governed by the Associations Law and the Business Corporations Act, modeled on Delaware and New York laws, and designed for activities… outside the Marshall Islands.

A typical international company:

50,000

Standard authorized capital often used for a Seychelles company, with no minimum capital required by law.

These entities are not intended to operate in the Marshallese market: they serve as vehicles for international trade, asset management, maritime shipping, or holding structures. They are subject to economic substance obligations (annual declaration and, for certain activities like shipping or fund management, a detailed report), but they do not need to file accounts or tax returns locally if they remain entirely “offshore.”

For an expatriate who simply wants an international structuring vehicle, the Marshall Islands therefore offers a fast, flexible, tax-advantaged solution, comparable to jurisdictions like the BVI or Seychelles.

Local Activity: Retail, Services, Tourism, Productive Projects

At the opposite end, launching a restaurant in Majuro, a small tourism operation, a seafood processing project, or a construction company means entering a difficult island economy: expensive infrastructure, reliance on imports, narrow market, complicated land issues, and demanding work permit procedures.

Attention:

Businesses operating in the local market are not eligible for the 0% tax regime for non-resident companies. They are subject to the Business Profits Tax (3% of gross turnover), import duties, social security contributions, and municipal licenses.

For an expatriate, the fundamental choice is therefore twofold:

– Create a purely offshore structure, with no operational presence on the ground;

– Or actually settle in the Marshall Islands, with employees, premises, and interaction with society and authorities.

In this guide, we focus mainly on the second scenario, that of the expatriate entrepreneur’s life project in the Marshall Islands.

The Legal Framework for Foreign Investment: Licenses, Sector Reservations, and Risks

Foreign investment is governed by the Foreign Investment Business License Act (1990), amended in 2000, and its 2019 regulations. Any business with foreign participation—even partial—is considered a “non-citizen investment” and must obtain a specific license.

The Foreign Investment Business License (FIBL): A Mandatory Step

To do business in the Marshall Islands as a non-citizen, the first step is obtaining a Foreign Investment Business License (FIBL). Without it, conducting business is illegal.

This license:

– Is applied for from the Registrar of Foreign Investment, who is none other than the Secretary of Finance,

– Is processed in coordination with the Ministry of Resources and Development and the Attorney General,

– Generally requires 7 to 10 business days for processing, excluding additional exchanges.

The application is detailed. In particular, you must provide:

Example:

A foreign investor plans to create a specialized services company in renewable energy, as a branch, in Majuro. The owners and directors, of French nationality and residing in France, plan an initial capital of $500,000. Three-year projections anticipate growing revenue and the hiring of 15 employees: 10 qualified Marshallese (with local preference respected for operational management) and 5 specialized expatriates. The company will need to rent office space and aims to start operations in the second half of 2024.

The authorities also examine compliance with the list of reserved activities (Reserved List), and may consult sectoral ministries if in doubt.

The FIBL grants the foreign investor the right to be treated on equal footing with resident investors. It does not constitute a guarantee of investment by the state. In case of serious breach (fraudulent information, corruption, non-compliance with laws, engaging in unauthorized activities), the license may be modified, suspended, or revoked.

Penalties are far from symbolic: working without a FIBL or in violation of its conditions exposes you to fines of up to $50,000, prison sentences of up to six months, and loss of statute of limitations protection in civil disputes.

The Reserved List: Sectors Forbidden or Sensitive for Foreigners

The country has formalized a National Reserved List, which groups activities reserved for Marshallese citizens. The spirit of this measure is to protect small local businesses and services.

Sectors Forbidden to Foreign Investors

Areas of activity where national regulations restrict or prohibit foreign capital participation for reasons of sovereignty, security, or economic strategy.

Defense and National Security

Manufacture of weapons, ammunition, and military equipment, as well as services related to national security and critical infrastructure.

Nuclear Energy

Nuclear power generation, nuclear fuel cycle, and radioactive waste management.

Transport Networks

Management and operation of rail networks, highways, and major seaports and airports.

Gambling and Betting

Casinos, horse and sports betting, as well as national lotteries.

Private Security

Guard, surveillance, and cash-in-transit services.

Broadcast Media

Terrestrial television and radio channels with national coverage.

– Small-scale agriculture and small-scale mariculture for the local market,

– Neighborhood bakeries and pastry shops,

– Garages and gas stations,

– Land taxis (excluding hotel-operated airport shuttles),

– Vehicle rental of all kinds,

– Small retail shops, neighborhood mini-markets,

– Video rental, hair salons, tailors/sewing workshops, small delis.

In theory, a FIBL application in these sectors must be rejected. In practice, enforcement is uneven, and partnerships with Marshallese entrepreneurs exist, sometimes with a legal structure where the foreigner acts as a minority partner or service provider.

Important point for expatriates already established: if an activity authorized originally is later added to the Reserved List, an existing FIBL cannot be revoked as long as the investment had actually started. However, this protection does not apply to new entrants.

Choosing Your Legal Structure: Domestic Company or Offshore Vehicle

For an expatriate who actually wants to operate in the Marshall Islands, two main families of structures must be distinguished.

Domestic Company or Branch: For On-the-Ground Business

Any “non-citizen” business operating in the territory must either:

– Incorporate as a domestic company (domestic limited company) with the Registrar of Domestic Corporations (Office of the Attorney General),

– Or register a foreign entity as a “foreign entity” to operate locally.

In this framework, you are in a classic limited liability company regime, with:

– One or more directors and shareholders (individuals or legal entities),

– Obligation to obtain local business licenses (municipality, Ministry of Finance),

– Subject to the Business Profits Tax on turnover generated in the country,

– Registration with social security (MISSA) and health contributions.

This type of structure is suitable for a hotel, a restaurant, a service provider, a construction company, a tourism activity, a local fishing company, etc.

Non-Resident Domestic Corporation (NDC) and IBC: For Offshore

Alongside this domestic reality, the country offers two main categories of non-resident entities intended for offshore use: Non-Resident Domestic Corporations (NDC) and International Business Companies (IBCs).

Their logic is similar:

Good to know:

Companies in the Marshall Islands are governed by the Business Corporations Act. They must have a registered agent and a registered office in the country. Their formation is flexible: a single director and a single shareholder are sufficient, with no residency requirement. No minimum capital is imposed; a symbolic capital of $1 is accepted. Shares may be issued in different classes and in the chosen currency, but bearer shares are prohibited for NDCs (though allowed for IBCs in certain confidential frameworks). Finally, these companies are exempt from all local taxes provided they do not carry on business in the Marshall Islands or with its residents.

NDCs are also explicitly prohibited from certain regulated activities such as banking, insurance, or trust services.

For expatriates who want to hold assets, structure a fleet of ships, or conduct international trade benefiting from zero taxation and high confidentiality (no public register of beneficial owners), these vehicles are attractive. However, they are not suitable if the goal is to open a shop in Majuro or build a lodge on an island.

Taxation: Distinguishing Offshore from Local

Marshallese taxation is often presented as “zero tax”, which is true for purely offshore companies, but misleading for an expatriate operating a business in the country.

For Non-Resident Companies (NDC, IBC)

As long as they carry out no economic activity in the Marshall Islands, these companies benefit from a broad exemption:

– 0% corporate income tax,

– No capital gains tax, no withholding tax on dividends, interest, royalties,

– No sales tax or local VAT,

– No obligation to file tax returns or financial statements.

However, they must:

Good to know:

Entities must keep their accounting records for at least five years, with the possibility of storing them outside the country. Additionally, they must file an annual economic substance notification. For certain specific activities (such as shipping or fund management), a detailed report is required to demonstrate economic substance locally or justify tax residency in another country.

For Businesses Operating Locally

Once you do business in the Marshall Islands, the regime changes. Resident companies and permanent establishments of foreign companies are subject to:

– A Business Profits Tax (BPT) of 3% on gross turnover, with an alternative calculation including $80 on the first $10,000 of revenue and then 3% above that,

– Local taxes such as sales tax (2 to 4% depending on the municipality),

– Significant import duties, often criticized by the private sector,

– A 3% tax on rents (property lease tax).

Add to that social security and health contributions:

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Social security contribution rate borne by the employer and withheld from the employee’s salary, applicable up to $10,000 in income per quarter

Regarding personal income tax:

– Salaries earned in the Marshall Islands are taxed at 8% up to $10,400 per year, then 12% above that,

– The first $1,040 of income is exempt for persons earning less than $5,200 per year,

– Income earned outside the country is not taxed locally, for both residents and non-residents,

– There is no wealth tax, inheritance tax, or gift tax.

For an expatriate entrepreneur, this means that their local activity will indeed be taxed, but within a relatively simple framework, dominated by taxes on turnover and payroll rather than a complex profit tax.

Land: An Inescapable Headache

In the Marshall Islands, no foreigner can own land. There is virtually no public land: all land is held under a customary, matrilineal system based on clans and families.

Concretely, to set up a hotel, an ice plant for fishing, a logistics base, or even a simple workshop, an expatriate must:

Tip:

To secure a lease on customary land, you must first precisely identify the land and all its customary owners, as a single parcel may belong to multiple people. Next, negotiate a long-term lease, typically lasting 25 to 99 years. It is essential to obtain the consent of all relevant rights holders, such as customary chiefs, clan members, and sometimes local authorities. Finally, the lease must be validated by the competent authorities (such as the Attorney General or the relevant ministry) and officially registered with the land registry to be fully enforceable.

Points of tension are numerous:

– The multiplicity of owners and complex family ties make identifying parties tricky,

– Disputes over land rights are common, sometimes settled informally, sometimes through lengthy procedures,

– A poorly documented transaction that omits a co-owner can be challenged years later.

For an expatriate, hiring a local lawyer and working with trusted Marshallese partners is essential. Land is both the key asset for many projects (tourism, industry, logistics) and the main source of legal risk.

Workforce, Local Quotas, and Work Permits

The labor market is characterized by:

– High unemployment,

– A large but poorly trained youth for some trades,

– A strong preference for public sector employment among Marshallese,

– Heavy reliance on foreign labor for construction, hospitality, restaurants, and technical trades (Philippines, Fiji, other Pacific countries).

For a foreign entrepreneur, two sets of rules apply: those related to investment (FIBL) and those of labor and immigration law (Immigration Act 2006, Labor (Non-Resident Workers) Act 2006).

Local Employment Quotas

The authorities require that at least 50% of a company’s workforce be Marshallese citizens. Furthermore, unskilled positions are reserved for local workers. In other words, expatriates are only tolerated in skilled or managerial functions, provided the employer proves the absence of a suitable local candidate.

When filing the FIBL application and work permits, you must therefore document:

– Local recruitment efforts (job postings, interviews, results),

– The skilled nature of the positions for which foreign workers are sought.

Work Permits and Visas

Anyone wishing to work in the Marshall Islands must have a work permit, even if they are also the primary investor in the project. There are several types of permits:

– “Foreign Investor” permit for the investor who comes on-site to implement their project,

– Professional permits for occupations on a list of in-demand trades,

– General permits,

– Family permits for the spouse of a Marshallese citizen.

The process is as follows:

Good to know:

To obtain a work permit and visa, you first need a valid FIBL listing the investor as owner or legal representative. Then, submit a complete application (passport, contract, proof of qualifications, medical report, police clearance, proof of local recruitment, employer registration, photos) to the Labor Division. Processing typically takes 4 to 8 weeks. Once the permit is approved, apply for a work visa from the immigration division, valid for up to two years and renewable.

Fees can range from $100 to $500 or more, depending on duration and category. No bond is required for investor and family permits.

For investors seeking a more permanent settlement, a residence visa can be issued for up to five years, renewable, but access to permanent resident status remains complex and rare, generally reserved for major economic contributions or long-term presence.

Business Registration Steps: From Company Registry to Municipality

In practice, setting up a business in the Marshall Islands, when you want to operate locally, involves several administrative layers.

1. Choice of Structure and Filing with the Registrar of Corporations

The entrepreneur chooses the form (domestic company, generally), defines the company name, and prepares the incorporation documents (Articles of Incorporation, Memorandum & Articles of Association). These documents are filed with the Registrar of Domestic Corporations, within the Office of the Attorney General.

Processing times are generally short: a few days for registration if the file is complete. Using a professional (registered agent, lawyer, specialized service provider) is almost systematic.

2. Obtaining the Foreign Investment Business License

In parallel or just after, the foreign investor files their FIBL application with the Registrar of Foreign Investment (at the Ministry of Finance). As noted, the application is detailed, and the announced processing time is around 7 to 10 business days, excluding additional exchanges.

3. Municipal Business License

Once the company is created and the FIBL obtained, the business must secure a commercial license from the relevant municipality (Majuro, for example). You must provide:

– The company charter,

– An application form,

– Sometimes proof of premises (lease) and planned activities.

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Application processing takes about a week.

License type (Majuro)	Indicative annual fees (USD)
Retail trade	150
Hotel	500
Professional services	3,000
Bank	5,000

These amounts should be viewed in the context of a country where average income remains modest, but operating costs are high.

4. Social Security and Tax Registration

The employer must then:

Good to know:

To operate legally, you need to obtain an Employer Identification Number (EIN) from MISSA, which serves as tax registration (cost: ~$100, timeframe: ~2 days). It is also mandatory to register the company and its employees for social security and health contributions, and to prepare to file quarterly and annual returns (profit tax, social charges, etc.).

5. Sectoral and Environmental Permits

Certain activities require additional authorizations. Some examples:

– Fishing and maritime activities: License from the Marshall Islands Marine Resources Authority (MIMRA),

– Coastal projects, constructions in sensitive areas, tourism developments: Development Activity Permit from the Environmental Protection Agency (EPA),

– Health, food processing, hospitality activities: health inspections and certificates.

Delays and costs can be significant. According to data used for international comparisons, a major development permit issued by the EPA can cost several thousand dollars and take several weeks.

Startup and Operating Costs: The Other Side of Paradise

The “offshore” incorporation services and taxation give the image of a low-cost country. For a local activity, the reality is quite different.

Startup Costs

For a purely offshore company (NDC, IBC), the packages offered by service providers are around:

– $1,800 to $3,400 for the first year, including government fees, registered agent, legal address, and incorporation documents,

– Additional fees for apostilles, nominee director or shareholder services, banking assistance.

A summary of typical fee levels is presented in the following table:

Cost elements (offshore)	Indicative range (USD)
Government incorporation fees	300 – 650
Annual government tax	300 – 600
Registered agent & registered office	500 – 900 per year
Professional service fees	750 – 1,200
Standard setup package	1,800 – 2,800 first year
Annual renewal	1,000 – 1,700

For a business actually established, you must add:

Administrative and Initial Expenses

Main expense items to anticipate when starting a business in Côte d’Ivoire.

FIBL Fees

Fees for obtaining the Foreign Investment Business License, an essential document for business creation.

Premises Rental

Costs related to leasing or renting commercial, administrative, or production spaces.

Municipal Licenses

Authorizations and licenses issued by the municipality to carry out a specific activity.

Work Permits and Visas

Administrative fees for residency and employment formalities for expatriate staff.

Initial Investments

Purchase of equipment (imported or local), initial stock, and premises setup.

Ultimately, the launch cost of a serious project (guesthouse, small processing unit, logistics) can easily reach tens or even hundreds of thousands of dollars.

Operating Costs

The main expense items are:

Attention:

Setting up in the Marshall Islands involves significant expenses in several areas: energy (costly electricity often supplemented by generators), communications (expensive internet and telecom services with average quality), logistics (import costs, duties, and long delays), payroll (a minimum wage of $5/hour is increased by 16% social charges and the scarcity of technical skills), and land (high rents for offices and housing in Majuro relative to market size).

To illustrate, the offshore operating costs of a simple structure (no office or local staff) are modest, while those of a local operation are much heavier, as summarized in this comparative table:

Type of structure	Typical recurring annual cost (excluding salaries, rent)	Main features
Purely offshore NDC / IBC	$1,000 – $2,000	0% local tax, no office, no local account
Active domestic company on-site	Highly variable, often > $10,000	BPT 3%, licenses, social charges, energy, sectoral permits

Banks and Finance: Between Local Constraints and Offshore Solutions

The banking system of the Marshall Islands is tiny: three commercial banks, including one local (Bank of the Marshall Islands) and two foreign banks (First Hawaiian Bank, Bank of Guam). Only the latter have direct access to international financial markets; the local bank depends on a fragile correspondent banking relationship for cross-border transactions.

Some key points:

Tip:

There is no legal obligation for a Marshallese company to open a bank account in the country. Many companies (IBCs and NDCs) open accounts in other jurisdictions such as Belize, Mauritius, Singapore, or Europe. For local bank accounts, banks are cautious and apply rigorous KYC/AML procedures, generally requiring: identification, proof of address, evidence of source of funds, a detailed description of activities, as well as incorporation documents and shareholder registers of the company.

Expatriates operating locally often combine: local market knowledge with international skills to optimize their impact.

– One or more accounts locally, to manage salaries and daily expenses,

– Accounts abroad, or even with digital banks or electronic money institutions (Airwallex, Wise, Payoneer, etc.), to secure international receivables and limit exposure to local risk.

Business Climate, Opportunities, and Limitations for an Expatriate

Objectively, the business climate in the Marshall Islands is not easy. Diagnostics conducted by international institutions and national studies point to:

– An oversized public sector that attracts the best profiles,

– An outdated and difficult-to-access commercial law system,

– Expensive and unreliable infrastructure (transport, energy, water),

– A simple but poorly administered tax system with manual procedures,

– Complex land issues that hinder heavy investment,

– High transaction costs for small businesses, which sometimes wonder why they should leave the informal sector.

That said, niches exist for expatriates who commit long-term and build strong local partnerships.

Promising Sectors

The identified fields of opportunity include notably:

Economic Opportunity Sectors

Key areas identified for development and investment, leveraging local strengths and specific needs.

Fishing and Processing

Value addition to catches through packaging and cold storage units for seafood products.

Logistics and Port Services

Leveraging a globally significant ship registry to develop related services.

Niche Tourism

Development of diving, eco-tourism, and well-managed boutique accommodations.

Construction and Housing

Construction and maintenance activities, adapted to the context of climate vulnerability.

Energy and Environment

Renewable energy solutions (solar) and water and waste management.

Institutional Services

Service provision to government agencies and international organizations based in Majuro.

Tax incentives exist for certain types of investments, for example:

– Exemption from Business Profits Tax for five years for projects of at least $1 million or paying more than $150,000 in annual salaries to Marshallese citizens, in the sectors of offshore fishing, manufacturing for export, agriculture, and hospitality,

– Even broader exemptions for deep seabed mining (in exchange for royalties on products).

These measures remain little used due to a lack of sufficiently large projects, but they exist on paper and can tip the profitability of a well-structured project.

Cultural Skills, as Decisive as the Business Plan

Finally, you cannot understand entrepreneurship in the Marshall Islands without addressing the cultural dimension. Society is deeply communal, matrilineal, structured by landowning clans and traditional chiefs. Values of respect, cooperation, and sharing take precedence over individualism.

Concretely, for an expatriate entrepreneur, this means:

– Taking the time to build trust-based relationships, through local partners, meetings with traditional authorities, and participation in community events,

– Respecting communication codes, often indirect, avoiding direct confrontation; a polite “yes” can sometimes mean “no”,

– Understanding that some business decisions involve family or community consultations, which lengthens timelines,

– Showing patience with administrative or land procedures that do not always follow international private sector rhythms.

Good cultural integration can become a major competitive advantage in a small market, where reputation and word-of-mouth matter more than formal marketing.

Conclusion: In the Marshall Islands, the Expatriate Entrepreneur Must Choose Their Playing Field

Setting up a business in the Marshall Islands as an expatriate is first and foremost about clarifying your project:

– Do you want an international structuring vehicle, with no local presence, to take advantage of zero taxation and the flexibility of Marshallese corporate law?

– Or do you actually want to settle, with a hotel, a tourism base, a small industry, a logistics service, accepting the constraints of a vulnerable island micro-state that is costly to operate in?

In the first case, the jurisdiction offers a mature offshore environment, fast, relatively cheap, and well known to banks and structuring professionals.

Good to know:

The entrepreneur must navigate a complex environment including customary land, local employment quotas, sectoral licenses, high costs, shallow market depth, and a poorly digitized administration. However, opportunities exist in niches aligned with the country’s needs, such as fishing, sustainable tourism, energy, infrastructure, and support services.

The common thread, in all cases, remains the same: do not let yourself be blinded by the idyllic image of the lagoons, but consider the Marshall Islands for what they are economically and legally—a tiny country with a well-honed business law for offshore, but a fragile domestic economy where only a patient, partnership-based, and culturally respectful approach allows a business to become sustainably established.