Located in the west-central Pacific Ocean between the territories of Hawaii and Australia, the Republic of the Marshall Islands (RMI) consists of twenty-nine coral atolls and five individuals’ islands divided into two chains known as Ratak and Ralik. Its territory is comprised of 750,000 square miles of which only 70 represent land. This is a particular geographic configuration, unique to this region in the world.
The islands have a humid tropical climate, consisting of a dry season and a rainy season that is manifested mainly between the months of May and November, having a greater impact on the northern atolls.
A Glimpse of History
This territory owes its name to the English explorer John Marshall, who sailed these waters in 1799. The RMI has a population of 78,831 inhabitants, which are distributed mainly in the Majuro (Capital of the Country), Ebeye and Kwajalein atolls, being these some of the most populated urban centers of the Pacific Ocean and world´s most densely populated locations. The majority of the inhabitants of the Kwajalein atoll works in a United States military base placed nearby the island.
This represents one of the reasons they offer a quite western lifestyle, typical of the calm and casual attitude of its population.
The political system of the RMI is constituted as a mixed presidential-parliamentary system that holds elections with universal suffrage every four years, as stated in the 1979 constitution. This country has enjoyed political stability since it was established as an independent nation in 1991 when the United Nations withdrew the status of UN Trust Territory and was accepted into the Organization.
The executive branch is composed of the president as head of state and government and his presidential cabinet of 10 ministers. The president is elected by the 33 senators of the Nitijela or lower house of parliament, where the legislative power resides. This is also responsible for approving the members of the presidential cabinet. On the other hand, the upper chamber is called the "Iroji" council and represents a consultative body of the executive power; it is composed of 12 tribal chiefs or "Iroji". It is thus understood that the RMI has a bicameral national parliament composed of the Iroji council and the Nitijela.
Islands’ Lifestyle
The Marshallese also are distributed among the other atolls where a traditional lifestyle is predominant. Their social structure is based on the "Bwij", which represents a traditional system of families that work together for the common benefit; which gives us a sample of the goodwill and mutual support that characterizes the citizens of this nation, the bwij are led by an "alap" and in the same way these families are grouped under the control of the "Iroji", whose main function is to distribute resources properly and resolve disputes among family members.
The Iroji are also the holders of and responsible for all land in conjunction with the alap. Although foreigners may not own land in the IMR it is quite common for tribal chiefs to grant land rights to investors through mutually beneficial agreements. Through this mutually supportive social configuration, the Marshallese government has been able to address poverty.
The Marshall Islands Economy
The Marshallese economy is considerably small, with a GDP of USD 221 million. It is made up of a monetary sector that mainly includes fishing, services, construction, tourism, and commerce. On the other hand, there is also a subsistence economic sector composed of banana and coconut cultivation and fishing. Its main trade allies are the United States, Japan, China, South Korea, Taiwan, and the Philippines. However, it depends to a greater extent on international support, mainly from the United States through the Compact of Free Association. This treaty guarantees to promote development through financial support directly in the Marshall Islands and other territories. This is within the framework of the US-UN territorial trusteeship agreement.
Tax System in the RMI
Theres no corporate income tax in the RMI, the government also offers to those investments that reach USD 1 million or that otherwise can provide USD150,000 in salaries to national citizens the exemption from payment of gross income tax for a period of 5 years. The government may also allow tax exemptions to those investors who demonstrate that their projects will bring significant economic benefits to the nation. However, this applies only to investments in the export area.
Among other benefits related to investment, it is important to highlight that the USD is used as the local currency and that the government of the RMI does not establish restrictions on the conversion or transfer of funds associated with investments. It should also be notice that, although the government encourages reinvestment of profits, there are no laws or taxes restricting the repatriation of funds, profits, or investment capital. A point of great importance in the eyes of investors.
Another element to highlight is how this country seeks to enter the world of digital money by becoming the second country to develop its own cryptocurrency. This was named Sovereign (SOV) and is based on blockchain technology. The regulatory framework is still under development, but this initiative could undoubtedly represent a real boost for development on the island.
The RMI represents a true paradisiacal jewel located in a region with tremendous potential for development in the Pacific Ocean. In addition to having a stable government that promotes foreign investment and offers countless economic opportunities, it is important to consider this country as a really interesting investment opportunity for the near future.
Want to invest, relocate, open a company in the Islands? Please contact our specialist at MUNDO!
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