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LAND AREA: 181 SQ. KM. BACKGROUND The Marshall Islands is a republic associated with the USA in a compact of free association. It consists of a double chain of 29 coral atolls comprising 1,225 islands and reefs. Total land area is only 171 sq. kms., scattered over an Exclusive Economic Zone (EEZ) of 1.2 million sq. kms. of ocean. Among the 24 inhabited islands and atolls there are four administrative centres, Majuro, the capital, with a population of 20,000, Ebeye in the Kwajalein group which has 9,000 people, Jaluit and Wotje. Significant atolls include Rongelap (land area 4.9 sq. kms., lagoon 624 sq. kms.), Enewetak (land area 3.6 sq. kms., lagoon 624.3 sq. kms.) and Maloelap (land area 6.1 sq. kms., lagoon 604.3 sq. kms.). An elected president is both Head of State and leader of a cabinet of 10 ministers whom he appoints. The legislature, known as the Nitijela, consists of 33 members elected by universal suffrage from 24 districts. Elections are held every four years. Cabinet exercises executive power and is accountable to the Nitijela. A 12 member Council of Chiefs called the Iroij has a consultative function on matters relating to land and customs. INVESTMENT CLIMATE Government Policy The Government recognizes the value of foreign investment as a means of promoting more vigorous economic development. The taxation system is currently being modified with a view to assisting the economic development process. Principal opportunities for foreign investment are likely to be in the areas of tourism, fisheries, derivative products of the coconut tree and fresh or processed tropical fruits and vegetables. Investment Incentives The country is a beneficiary of various trade agreements which allow preferential access to major markets for its exports. The Compact of Free Association gives access to US markets as does the Generalised System of Preferences (GSP) which covers markets in Canada, Japan and non-western European countries as well. The South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) opens the markets of Australia and New Zealand. Restrictions and Limitations on Foreign Investment Access to Labor Given the acute shortage of labor of all skill levels in the Marshalls, a relatively high proportion of non-Marshall Islanders in the work force is to be expected. Work permits are available to the foreign investor although stringent rules apply. Access to Land In spite of considerable progress in improving the tenure system, including the issuance of 50 year leases, acquisition of land for investment remains a formidable barrier with difficulties caused by the traditional system of multiple rights. REGULATORY FRAMEWORK Review and Approval Mechanisms for Foreign Investment Proposals The Foreign Investment Advisory Board should be the first point of contact for potential investors, providing detailed information on all requirements. The Board also processes applications for investment licenses. Applications should include the following information:
In the case of corporations, additional information should include:
In addition to an investment license, foreign investors must also obtain a business license from the local government authorities of the area in which they intend to operate. In the case of the local government of Majuro, annual business license fees vary from US$50 for a small take-out food enterprise to US$500 for a bank. Companies can be incorporated by submitting the charter and by-laws to the registrar of corporations in the office of the Attorney General. Fees vary according to the degree of local participation. Competition Policy Price Controls There are no Government imposed price controls in the Marshall Islands. Imports and Exports The trade regime in the Marshall Islands is characterized by relatively low tariffs, but there are several import duty exemptions (for government, public enterprises, and special sectors) which may discourage investment because of their distorting effects on the relative prices facing some private sector producers. OPERATIONAL PROCEDURES Labor and Labor Regulations Marshall Islanders are categorized as Micronesians. The census population in 1988 was 43,335 with an annual growth rate of four percent. Approximately 66 percent of the population live in the urban centres of Majuro and Ebeye. Marshallese is the official language although English is widely spoken and, as a result of the Japanese occupation of the islands during World War II, some older people can converse in Japanese. The estimated labor pool is 10,000 people of whom 50 percent have had a secondary education. A significant number of the paid workforce are Filipinos on term contracts in the construction industry. The employers of foreigners are required to pay 25 US cents per hour per employee into a government training fund to sponsor skills training for local people. The minimum wages in both public and private sectors are low compared to the general cost of living. Banking Three commercial banks, the Bank of the Marshall Islands, the Bank of Guam and the Bank of Hawaii all provide domestic and international services. Four credit unions provide savings and loans services to their 2.000 members. The official currency is the US dollar. The Marshall Islands Development Bank provides a range of financial and non-financial assistance to enterprises in the Marshall Islands. PROMOTION OF INVENTMENT OPPORTIJNII IES Further details on the Marshall Islands are contained in the publication:
Contacts for Further Information: Secretary Managing Director Website: RMI Online
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