Key Takeaways
- Importers bringing goods into the Marshall Islands are generally subject to import duties, with rates that vary by product category.
- Customs valuation is assessed on a CIF basis, so the dutiable value reflects the cost, insurance, and freight of imported goods.
- Exemptions, concessions, and duty-free categories may reduce or remove the duty owed on certain qualifying goods.
- Companies and investors should prepare the required clearance documentation and watch for common compliance pitfalls when importing.
Understanding Customs & Import Duties in the Marshall Islands
The Marshall Islands levies import duties on all goods entering the country, applying generally low ad valorem rates calculated on the CIF value of each shipment. This is not a zero-duty territory: the governing law is the Import Duties Act 1989, codified as Title 48, Chapter 2 of the Marshall Islands Revised Code, and the levy applies to commercial importers and individual travellers alike.
Import duties matter to the public purse here. Customs supplied 21.6% of total tax revenue in fiscal year 2024, according to the IMF technical report, so the regime is actively enforced rather than nominal.
The country is often described as a low-tax jurisdiction for corporate and income tax purposes. That reputation is real, but it does not extend to import duties, which sit apart and are collected on goods crossing the border.
This article explains how those duties are structured, what rates apply by product, how dutiable value is calculated, and what exemptions and procedures a foreign importer should expect. It is most useful to overseas business owners, investors, and advisers weighing a trading or investment presence connected to the Marshall Islands.
Legal Basis: The Import Duties Act 1989 and the Division of Customs
The Import Duties Act 1989, originally enacted as P.L. 1989-49, is the foundation of the customs regime. It has been amended many times across three decades, with revisions running through P.L. 2019-113, so the schedules and rates you encounter reflect a long sequence of legislative adjustments.
One carve-out is worth knowing at the outset. The Act does not apply to goods imported to the United States Army Kwajalein Atoll (USAKA), which operates under separate arrangements.
Administration sits with the RMI Customs division, part of the Division of Customs, Treasury, Revenue and Taxation (DCTRT) under the Ministry of Finance and based in Majuro. The same body administers most national taxes, giving importers a single point of contact for duty matters.
Customs Officers are posted at the International Airport in Majuro, the main port of Delap in Majuro Atoll, and at Ebeye in Kwajalein Atoll. Personnel rotate across airports, seaports, post offices, and commercial agents such as the DHL representative (PII) and the Stevedore Company (MSTCO), so duty assessment reaches parcels and freight through multiple channels.
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How Import Duty Rates Are Structured (The 8% General Rate and Special Rates)
A general rate of 8% ad valorem applies to most imports. Foodstuffs are treated more favourably, with a 5% rate covering most food categories subject to specific exemptions.
The system deliberately uses a small number of tariff categories to keep administration manageable. For importers, that means a degree of predictability: goods fall under either an ad valorem rate or a specific (unit-based) charge, set out in the Act's schedules.
Fuels, alcohol, and tobacco are taxed by unit rather than by value. Diesel duty, for instance, is $0.08 per gallon, a specific charge that is low by international comparison.
Effective April 2019, all imports over $250 are dutiable at 8%, including packages sent via the US Post Office, air freight, and container freight. Yachts-in-transit, including US-flagged vessels, are no longer exempt.
Because the unit-based duties on fuel, alcohol, and tobacco have largely stayed flat in nominal terms, their inflation-adjusted value has fallen by more than a third over twenty years. Classification of goods generally follows Harmonized System (HS) codes, which sort products by type and intended use.
Duty Rates by Product Category (Vehicles, Alcohol, Tobacco, Food, Electronics and More)
Rates vary sharply by product, and the differences are large enough to affect sourcing decisions. The table below summarises the headline figures most relevant to a foreign importer.
| Category | Rate or basis |
|---|---|
| General imports | 8% ad valorem |
| Most foodstuffs | 5% ad valorem |
| Public transport vehicles | 5% |
| Other motor vehicles | 15% (on Kelley Blue Book value) |
| Renewable energy vehicles | No duty |
| Cigars | 151% |
| Mixed alcoholic drinks | 26% |
| Diesel fuel | $0.08 per gallon |
Motor vehicles deserve attention. Public transport vehicles attract a 5% duty, while other vehicles carry 15% assessed on the Kelley Blue Book value rather than your invoice. Renewable energy vehicles carry no duty, an exemption reinstated by P.L. 2016-18.
Alcohol and tobacco are charged on specific, unit-based rates. The headline percentages such as the 151% on cigars and 26% on mixed alcoholic drinks translate into substantial cost, and soft drinks sit under a mixture of specific and ad valorem treatment.
Food is treated more gently. The 5% rate covers most items, while milk, rice, flour, vegetables, fruit, poultry, and canned fish enter duty-free. Pharmaceuticals are frequently exempt as well.
Capital goods receive favourable treatment in places. The country imports significant machinery and industrial equipment, mostly from the US, Japan, and China; construction equipment often draws lower tariffs, and electrical machinery and power-generating equipment receive reduced duties to support energy supply.
The full unit schedule for alcohol and tobacco appears in the Act itself rather than in summary form. Where you need the exact per-unit figure for a specific beverage or tobacco product, the statutory schedule is the authoritative reference.
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Customs Valuation: CIF Basis and Calculating Dutiable Value
Ad valorem duties are assessed on the CIF value, meaning the customs value of the goods plus shipping plus insurance. Your dutiable base is therefore higher than the bare invoice price, and freight and insurance costs feed directly into the duty you pay.
Motor vehicles are the exception. For this category the dutiable value comes from the Kelley Blue Book rather than the declared invoice, a departure from standard CIF methodology that vehicle importers must plan around.
Most Pacific states apply transaction value and CIF as their primary valuation basis, consistent with the WTO Agreement on Customs Valuation. The general principle holds here, with vehicles as the notable carve-out.
Exemptions, Concessions, and Duty-Free Goods
A defined set of goods enters free of duty. Energy-efficient equipment, solar-powered and renewable energy equipment imported for power generation, and fishing equipment all qualify, alongside goods in transit to other international destinations.
Several food staples carry zero duty, as noted above, and further exemptions reach aviation imports including fuel and components. Fuel imported by the Marshalls Energy Company (MEC) or Kwajalein Atoll Joint Utility Resource Inc. (KAJUR), and inputs brought in by local manufacturers, also fall outside the duty net.
Two mechanisms help traders who move goods onward. Items in transit from one foreign point to another are not dutiable, and import tax on re-exported goods is refundable.
Humanitarian and registered international organisations qualify for exemption where they maintain a permanent presence and register with the Attorney General's office in the Department of Justice. During a declared emergency, goods designated for humanitarian purposes are exempt, validated through the National Disaster Management Office (NDMO).
Trade with the United States carries particular relief. Under the Compact of Free Association, many goods imported from the US are exempt from tariffs or charged at significantly reduced rates, covering foodstuffs, machinery, and consumer goods.
Travellers receive personal allowances. A person may bring in 600 cigarettes or 454 grams of cigars or tobacco, and those aged 21 and over may import 2 litres of alcoholic beverages free of duty.
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The Import Clearance Process: Documentation and Procedures
Registration comes first. You must register with the Ministry of Finance and obtain an importer identification number, and this has to be done before your goods arrive, ideally before the shipment is dispatched.
The core documentation set is straightforward:
- Purchase invoice
- Packing list
- Bill of lading
- Health, agriculture, or environmental permits for goods that require them
Once cargo arrives, you submit your documents to customs officials for review. Officers inspect incoming consignments, examine shipping papers, assess tariffs, and validate the declared goods to guard against smuggling and counterfeiting.
Carriers carry their own obligation: a manifest must be delivered to Customs. The Act sets formal procedures for entry of goods, payment of duty and release, and the handling of lost or damaged shipments, and Customs Officers hold the power to board vessels and aircraft for inspection.
Entry runs through three points: Majuro International Airport, the main port of Delap in Majuro Atoll, and Ebeye in Kwajalein Atoll. Accuracy throughout the paperwork is essential, since discrepancies invite delay or penalty.
Prohibited and Restricted Goods
Some items cannot enter at all. Firearms and ammunition are prohibited absent special permits, and illicit drugs and narcotics such as heroin, cocaine, and methamphetamines are strictly barred.
Counterfeit medicines and substandard medical devices are prohibited, with the Ministry of Health and Human Services regulating medical products. Turtle shells, certain other natural resources, and artefacts of historical value are restricted or banned outright.
Birds, animals, fruit, and plants require certification from the Quarantine Division of the Ministry of Resources and Development before arrival. Technological equipment with dual-use civilian and military applications faces strict control.
Enforcement is shared. The Customs Service works alongside the Ministry of Health and Human Services, the Environmental Protection Authority, and the Ministry of Resources and Development across their product areas, with controls on food and agricultural goods designed to keep out pests and disease. Unauthorised entry to restricted atolls can bring a $10,000 fine, vessel impoundment, and deportation of crew.
What the Import Duty Regime Means for Companies and Investors
No blanket zero-duty regime exists for commercial importers. The only standing statutory duty exemptions cover renewable and alternative energy items, so a trading business should assume duty applies to most of what it brings in.
The small set of tariff categories works in your favour through predictability, even if rates on specific products run high. Under the Compact of Free Association, US products receive Most-Favoured-Nation status, and the country must consult the United States before entering any free trade agreement with another customs territory.
The much-cited tax advantage of the jurisdiction concerns income, not customs. Non-resident companies not conducting business within the country are exempt from income, profits, dividend, royalty, and compensation taxes, but that relief does not touch import duties on physical goods.
Investment incentives exist for those who commit capital or jobs. An investor placing at least USD 1 million, or generating more than USD 150,000 in annual wages for Marshallese workers, can receive a five-year exemption from gross revenue tax in designated sectors; seabed hard mineral mining carries broader relief from taxes, duties, and charges.
Two structural points bear watching. A proposed Marshall Islands Consumption Tax has been considered as a replacement for national import duties and local sales taxes, and tax administration operates with a small staff in a largely manual environment, which affects enforcement consistency. Further context appears in the State Department report.
Compliance Tips and Common Pitfalls When Importing
Most problems trace back to timing and paperwork. Register and secure your importer identification number before goods leave origin, and confirm the full document set is complete before arrival.
- Register with the Ministry of Finance ahead of dispatch
- Assemble the invoice, packing list, and bill of lading
- Secure any health, agriculture, or environmental permits
- Vehicle duty is set on Kelley Blue Book value, not your invoice
- All imports over $250 are dutiable at 8%, including postal parcels
- Alcohol, tobacco, and fuel are charged per unit, not on value
Declarations must be full and honest. Inaccurate or incomplete declarations can lead to fines or forfeiture, and discrepancies between documents commonly cause delay.
Budgeting deserves care for specific-rate goods. Because alcohol, tobacco, and fuel are taxed by volume rather than value, your cost projection must rest on units imported, not shipment price.
Humanitarian importers seeking exemption should supply standard customs documentation plus an official letter of request to the Director of the NDMO. Given that infrastructure and enforcement vary, engaging a local customs agent or broker reduces the risk of procedural friction, and you should check current prohibited and restricted lists before every shipment.
Conclusion
For a foreign business owner deciding whether to import goods into the Marshall Islands, the practical weight of this regime rests less on the general duty rate and more on how CIF valuation compounds costs across every shipment. Because insurance and freight are folded into the dutiable value before a rate is even applied, landed costs can diverge materially from what a simple product-price calculation would suggest.
The most productive next step is therefore a category-by-category review of planned imports against the applicable rates, exemptions, and documentation requirements, before goods move, not after a customs hold reveals a gap in compliance.
How Expanship Can Help Your Business in the Marshall Islands
Expanship supports foreign-owned businesses with the practical side of import duty compliance, from securing an importer identification number to preparing accurate customs documentation, and extends that support across the wider obligations of operating an entity in the jurisdiction. The aim is to keep your structure compliant while you manage trade and investment from abroad.
- Company formation and entity setup
- Registered agent and registered office services
- Tax registration and periodic filing
- Ongoing compliance and statutory maintenance
- Accounting and bookkeeping support
- Introductions to banking partners
To discuss your import or incorporation requirements, contact Expanship Marshall Islands.
Frequently Asked Questions
Yes. All imports are subject to duty, with a general rate of 8% ad valorem and a 5% rate on most foodstuffs, assessed on the CIF value of the goods. The low-tax reputation of the jurisdiction relates to income and corporate tax, not to customs.
Ad valorem duty is charged on the CIF value, meaning the cost of the goods plus shipping plus insurance. Motor vehicles are the exception, where the duty base is the Kelley Blue Book value rather than your invoice price.
Yes. Under the Compact of Free Association, many US-origin goods are exempt from tariffs or charged at significantly reduced rates, including foodstuffs, machinery, and consumer goods, and US products receive Most-Favoured-Nation status.
Since April 2019, all imports valued above $250 are dutiable at 8%, including packages sent through the US Post Office, air freight, and container freight. The same change ended the customs exemption for yachts and other vessels-in-transit, including US-flagged craft.
Duty-free categories include renewable and solar energy equipment for power generation, fishing equipment, and several food staples such as milk, rice, flour, vegetables, fruit, poultry, and canned fish. Pharmaceuticals are often exempt, and goods genuinely in transit to another foreign destination are not dutiable.
Yes. You must register with the Ministry of Finance and obtain an importer identification number before your goods arrive, ideally before dispatch. The core documents required are the purchase invoice, packing list, and bill of lading, with additional permits for health, agricultural, or environmentally sensitive items.
Legal Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change, and the application of laws can vary widely based on specific facts and circumstances.
Readers should not act upon this information without seeking professional counsel tailored to their individual situation. Expanship and its authors disclaim any liability for actions taken or not taken based on the content of this article.
For specific advice regarding your business setup, compliance requirements, or any legal matters, please consult with qualified legal and tax professionals in the relevant jurisdiction.
