6. Financial Sector
Capital Markets and Portfolio Investment
There are no stock exchanges or financial regulatory institutions in the country.
Money and Banking System
There are currently two banks with branches in the Marshall Islands. The Bank of Guam is a publicly owned U.S. company with its headquarters in Guam. It complies with all U.S. regulations and is FDIC-insured. The Bank of the Marshall Islands (BOMI) is a privately-owned Marshallese company with headquarters in Majuro. First Hawaiian Bank is the sole provider of BOMI’s link to the U.S. and international network; however, there have been reports that the RMI’s correspondent banking relationship with First Hawaiian, Inc. may be in jeopardy if the government adopts the “SOV,” a cryptocurrency, as a national currency in addition to the U.S. dollar. Although the SOV was originally scheduled to be launched in 2019, recent press statements have indicated that the company associated with the SOV’s development needs time to address the concerns of the International Monetary Fund and other stakeholders, including the U.S. Treasury Department, and is delaying the planned launch of the SOV.
Foreign Exchange and Remittances
The government does not impose any restrictions on converting or transferring funds associated with an investment. The Marshall Islands uses the U.S. dollar as its official currency, and there is no central bank. There are no official remittance policies and no restrictions on foreign exchange transactions. There have been no reported difficulties in obtaining foreign exchange as the vast majority of funds are denominated in U.S. dollars.
While the government encourages reinvestment of profits locally, there are no laws restricting repatriation of profits, dividends, or other investment capital acquired in the Marshall Islands. To comply with international money laundering commitments, cash transactions and transfers exceeding USD 10,000 are reported by the banks to the Banking Commission, which monitors this information and has the authority to investigate financial records when necessary. To date, however, the country has not successfully prosecuted any money laundering cases.
Sovereign Wealth Funds
The Marshall Islands has no sovereign wealth fund (SWF) or asset management bureau (AMB), but the Compact of Free Association established a Trust Fund for the Marshall Islands that is independently overseen by a committee composed of the United States, Taiwan, and Marshall Islands representatives.