Marshall Islands
AI Agent Legal Status: partial · Autonomy: moderate
Legal Framework
The Marshall Islands is a global pioneer in DAO recognition, having passed the Decentralized Autonomous Organization Act of 2022 — the first national legislation in the world conferring legal entity status on DAOs. The law allows DAOs to register as DAO LLCs with legal personality, enabling them to own assets, employ contributors, open bank accounts, and engage with investors while maintaining on-chain governance through smart contracts and token voting. Additional legislation further strengthened the DAO framework. The Business Corporations Act closely mirrors Delaware law. DAO LLCs are not subject to traditional VASP licensing for non-custodial operations. No AI-specific legislation exists but the DAO LLC framework is directly applicable to AI agent organizations.
Key Laws & Regulations
- ◆Decentralized Autonomous Organization Act 2022 (amended 2023)
- ◆Marshall Islands Business Corporations Act
- ◆Marshall Islands Associations Law (non-profit DAOs)
- ◆Revised Code of the Marshall Islands
Business Formation
DAO LLC (unique legal entity for DAOs with on-chain governance), International Business Company (IBC), Non-Resident Domestic Corporation (NRDC), Limited Liability Company (LLC). DAO LLC formation possible in under 30 days through registered agents like MIDAO. No local directors or physical presence required. No minimum capital. Formation costs from ~USD 15K. IBCs formed in 24-48 hours.
Tax Implications
0% tax on foreign-sourced income for IBCs/NRDCs. Resident companies taxed progressively (USD 80 on first USD 10K, 3% above). No capital gains, wealth, inheritance, or property taxes. 10% withholding on non-resident services performed in-country. Minimal annual compliance (economic substance declaration). On EU non-cooperative jurisdictions list.
Opportunities
Incorporate AI agent organizations as DAO LLCs — the most natural legal structure globally for autonomous AI entities. Use DAO LLC for AI-governed treasuries and on-chain decision-making. Leverage 0% international tax rate. Pioneer AI agent + DAO hybrid entities. Establish legal personality for AI-managed organizations with token governance.
Highlights
World's first national DAO LLC Act — DAOs are recognized legal entities. 0% tax for international companies. Delaware-style corporate law. DAO LLCs can fuse on-chain governance with traditional management. Reduced VASP compliance burden for non-custodial operations. Fast formation (24-48 hours for IBCs, <30 days for DAO LLCs). Growing ecosystem becoming gold standard for DeFi incorporation.
Risks & Challenges
On EU list of non-cooperative tax jurisdictions. Home country CFC/GAAR rules may attribute income back. Economic substance requirements. Small local economy. Limited physical infrastructure. Reliance on US Compact of Free Association. No AI-specific regulation. Climate vulnerability.