Please find below answers to many frequently asked questions. If you cannot find what you are looking for, please send your question using the form at the bottom of this page.
A. The Federated States of Micronesia is an Island country that spreads across the Western Pacific Ocean, just north of the equator. It lies Northeast of Papua New Guinea, South of Guam, Southeast of Japan and Southwest of Hawaii.
A. The Federated States of Micronesia is a sovereign nation that has been a member of the United Nations since 1991.
A. There is no direct flight from Japan to FSM. You would need to transit in Guam. It takes 3.5 hours from Tokyo/Osaka to Guam and 3.5 hours from Guam to Pohnpei, the capital of the FSM via Chuuk. United Airlines is the only airline available between Guam and the FSM. In normal times, there are five flights a week from Guam to Pohnpei.
A. The time difference between Japan and Pohnpei State is 2 hours. For example, 8 a.m. Japan time is 10 a.m. in Pohnpei.
A. The official currency used in the Federated States of Micronesia is the US Dollar.
A. To establish a corporation in the Federated States of Micronesia, you would need to create Articles of Incorporation and file it with the FSM Registrar of Corporations (ROC) office. The standard form of the Articles of Incorporation can be downloaded from the FORMS page on this website. After filing the Articles of Incorporation, the Certificate of Incorporation will be issued by the ROC within a week. After opening a bank account and depositing the required capital, you would need to file the Initial Report to FSM Secretary of Finance. The minimum statutory capital to establish a captive insurance company is US$100,000. The minimum statutory capital for any other Major Corporation is US$ 1 million.
A. For a new Corporation, it takes 1 week after submitting the application to the FSM ROC and for a new Captive Insurance Company, it takes 4-6 weeks.
A. The following fees will give you an idea or estimated cost of how much it will cost a company to be established in the FSM:
●The filing fee for the Articles of Incorporation to the FSM Registrar of Corporations: US$100
●For a captive insurance company, the following additional costs will apply.
ㅤ○Captive Insurance License Application Fee: US$500
ㅤ○Captive Insurance License Fee: US$500
●It is not required to have an FSM attorney to establish a company in the FSM. However, if you would like to use a local attorney, we suggest contacting Ramp & Mida Law Firm that has extensive experience in assisting in the incorporation process.
[Ramp & Mida Legal Fee]
ㅤ○For establishing a corporation: a flat fee of US$2,000 or US$150 per hour.
ㅤ○For obtaining a Captive Insurance License: a flat fee of US$3,000 or US$150 per hour.
A. The estimated running cost for both Major Corporations and Captive Insurance Companies are listed as follows:
[All Major Corporations]
●Corporate income tax return fee: It depends on volume and nature of the corporation’s transactions.
●Filing fee for Annual Report to the FSM Registrar of Corporations: US$25
●Office service fee: MRA offers the below services.
POSA (Professional and Office Services Agreement)
ㅤ○Plan A – US$50/ month (Office address rental + P.O. Box service)
ㅤ○Plan B-1 – US$300/ month (Private office space rental at One World Plaza + dedicated phone number)
ㅤ○Plan B-2 – US$400/ month (Private office space rental at VB Center + dedicated phone number)
ㅤ○Plan C – US$600/ month (Private office space rental at VB Center + dedicated phone number + private P.O. Box service)
ㅤ○Plan D (For Captive Insurance Companies) – US$500/ month (Services of Plan A + principal representative services)
*All plans above include the payment of filing fees to the FSM Registrar of Corporations.
[Only Captive Insurance Companies]
●Captive Insurance License Annual Fee: US$500
●Captive manager fee: Please ask your captive manager
●Actuary fee: Please ask your actuary
●Audit fee: Please ask your auditor
A. There are 2 banks in the FSM: the Bank of FSM and the Bank of Guam. However, banks outside of the FSM are also acceptable. For example, some of the existing FSM corporations use a branch of Mitsubishi UFJ Bank or Mizuho Bank in Japan.
A. We have Ramp & Mida Law Firm and Deloitte in Pohnpei. Ernst & Young and Deloitte in Guam also provides services.
A. No. However, some corporations hold their shareholders meeting and directors meeting in the Federated States of Micronesia. (MRA’s conference room can be used as part of POSA services.)
A. No. Foreigners are not allowed to purchase real estate. You can only lease real estate.
A. As of October 2020, there are more than 100 FSM corporations established by Japanese companies and individuals.
A. The Federated States of Micronesia does not have any tax treaty with any country. However, since the FSM does not impose withholding tax on dividend and interest, a tax treaty is not required in the payment of dividend and interest by an FSM corporation.
A. There is no gift tax nor inheritance tax.
A. Captive insurance company is a subsidiary insurer that exclusively underwrites risks for its parent company or its group. The captive insurance structure allows companies to proactively manage risks according to their own needs.
A. Marine cargo, product liability, property, employee’s compensation, liability, travel, fire, automobile, accident, health, earthquake, global pandemic, cyber risk, among others.
A. There are four classes of captives in the FSM.
Class 1: A captive insurance company that insures the risks of its parent and affiliated companies or associations
Class 2: A captive insurance company that insures the risks of its parent and affiliated companies or associations and/or related third-party businesses
Class 3: A captive insurance company that constitutes part of a Multiple Corporate Captive Insurance Company
Class 4: A captive insurance company that insures the risks of its parent and affiliated companies and/or associations and/or related third-party business and/or unaffiliated business and/or Multiple Corporate Captive business
A. The minimum statutory capital requirement is US$100,000.
A. The following captive managers are available. (in alphabetical order)
Alakai Global Inc.
Aon Insurance Managers Pte. Ltd.
Blue Ocean Risk Management Ltd.
Clifton JMIS Reinsurance Brokers Inc.
Interisk Asia Pte. Ltd.
Marsh Management Service, Inc.
Micronesia Insurance Management Company Ltd. (MIMC)
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