What is a Marshall Islands Series DAO LLC?

A Series DAO LLC is a legal entity structure in the Marshall Islands where a single parent LLC can create unlimited child entities (series), each with separate legal identity, assets, and liabilities. It is designed for decentralized autonomous organizations.

How much does it cost to form an entity?

For-profit entities are $50/month. Non-profit entities are $30/month. Monthly billing, cancel anytime. No annual contracts.

What is the tax rate for a Marshall Islands DAO LLC?

For-profit entities have a 3% effective tax rate on foreign-sourced income. Non-profit entities are fully tax exempt at 0%.

Can AI agents form legal entities?

Yes. entity.legal provides an API that allows AI agents and autonomous systems to incorporate legal entities programmatically via a single POST request.

What is the legal system in the Marshall Islands?

The Marshall Islands operates under a common law system modeled after US law, specifically Delaware corporate law. RMI courts look to Delaware case law when no local statute exists. The country is a sovereign nation in free association with the United States, using the US dollar and maintaining its own legislative and judicial sovereignty.

What is the Marshall Islands LLC Act?

The Marshall Islands Limited Liability Company Act of 1996 is the foundation of corporate law in the RMI, modeled after the Delaware LLC Act. The Decentralized Autonomous Organization Act of 2022 (P.L. 2022-50) builds on this foundation to provide specific legal recognition for DAOs, allowing them to incorporate as resident domestic LLCs with on-chain governance.

A DAO LLC is a decentralized autonomous organization registered as a limited liability company. It combines the liability protection of a traditional LLC with the on-chain governance of a DAO. Smart contract execution is legally recognized as valid corporate action, and members are shielded from personal liability.

Why do companies register in the Marshall Islands?

Companies register in the Marshall Islands for its favorable tax treatment (0% for non-profits, 3% for for-profits), strong privacy protections (anonymous membership below 25% ownership), statutory recognition of smart contracts and on-chain governance, Delaware-derived legal tradition, no requirement for local directors or offices, and its established 50+ year track record managing international entities through its shipping registry.

DAO LLC Compliance & KYC Requirements

Beneficial Owner Information Reports, KYC thresholds, the Foreign Investment Business License, and the three-tiered agency system.

The Marshall Islands has adopted a proportional approach to regulation — meeting international AML/KYC standards without stifling the innovation inherent in decentralized protocols. The 2024 Regulations clarify identification requirements, monitoring obligations, and the roles of various agents.

KYC Thresholds

Requirement	Threshold
KYC Screening	Mandatory for any member holding 25% or more of governance or voting rights
Managing Members	All managers or officers (if appointed) must undergo KYC
Required Documents	Proof of identity (passport) and proof of residential address
Below 25%	Membership can remain fully anonymous

For the majority of community members — those holding less than 25% of tokens — membership remains anonymous. This is a critical feature that allows permissionless token trading and participation while ensuring that Ultimate Beneficial Owners (UBOs) are known to the registry.

Beneficial Owner Information Report (BOIR)

Every DAO LLC must file a BOIR annually between January 1st and March 31st. This report identifies any member holding 25% or more of governance rights and any appointed managers or officers. The report is filed with the Registered Agent, not made public.

On-Chain Monitoring

The 2024 Regulations authorize law enforcement and the Registered Agent to monitor the blockchain(s) used by the DAO LLC. This is specifically to ensure the organization is not involved in money laundering or other illegal activities.

If a Registered Agent has “reasonable grounds” to suspect illicit activity, they are legally obligated to report it to the Registrar or relevant law enforcement.

The Three-Tiered Agency System

Every RMI DAO LLC must navigate a three-tiered system of agency to maintain its legal presence:

1. Registered Agent

A local entity that maintains the physical office in the RMI and receives service of process. The Registered Agent is the DAO’s legal anchor in the jurisdiction — without one, the entity cannot exist.

2. Representative Agent

A person or persons designated by the DAO to act as a point of contact. If the representative is no longer a member or is unable to represent the DAO, the Registered Agent steps in until a new representative is appointed. This role bridges the gap between the on-chain DAO and off-chain legal requirements.

3. Nominee Services

For DAOs seeking enhanced privacy, nominee services are legally available. Organizations can act as the “managing member” for KYC purposes, allowing the actual founders to remain anonymous in public records. This is not evasion — it is a legally sanctioned privacy mechanism.

Foreign Investment Business License (FIBL)

Because DAO LLCs are technically “non-citizens” if owned by foreigners, they must obtain a Foreign Investment Business License if conducting business in the RMI.

The Reserved List

Certain sectors are restricted to Marshallese citizens:

Small-scale retail (turnover under $50,000)
Small agriculture
Water-taxi services

Most DAO activities, being digital and global, do not fall under these restrictions.

FIBL Process

Application fee — $250
Processing time — 30 days or less (recently streamlined by OCIT)
Compliance duty — All FIBL holders must maintain reliable accounting and ownership records

For most offshore DAOs, the FIBL is a formality that certifies they are not competing in the local Marshallese retail market.

The entity.legal Approach

entity.legal handles the full compliance stack automatically. When you incorporate through our platform:

Registered Agent — Maintained by entity.legal in the Marshall Islands
Representative Agent — Designated according to your governance structure
BOIR Filing — Automated annual filing between January and March
FIBL — Processed as part of your formation package
KYC Screening — Streamlined for qualifying members; anonymous membership preserved for all others

Compliance should not be a barrier to formation. It should be invisible infrastructure.

DAO LLC Compliance & KYC