Navigating Financial Compliance in the Northern Mariana Islands: A Guide for Foreign Corporations

As a Delaware corporation, you enjoy the flexibility that comes with that business structure. However, operational jurisdictions necessitate adherence to local laws, especially in places like the Northern Mariana Islands. In this article, we’ll explore how to determine if your business is legally doing business in the Northern Mariana Islands, the registration process, and the subsequent compliance requirements.

Is Your Corporation Operating in the Northern Mariana Islands?

The Northern Mariana Islands consider corporations that are formed outside their territory as “foreign.” You’re conducting business in the Northern Mariana Islands when your corporation enters their jurisdiction through agents and carries out continuous commercial activity. Although the definition of “doing business” is vague, the Northern Mariana Islands list some exceptions:

Defending or settling a lawsuit
Having a bank account
Selling goods through independent contractors
Using a P.O. box instead of a physical address

Sales Tax Exemption

Unlike most states and territories, the Northern Mariana Islands do not impose a general sales tax on goods bought within their jurisdiction. This exemption means you don’t need to register with the Northern Mariana Islands Department of Finance to collect sales tax.

Registration Process for Foreign Corporations

To legally operate in the Northern Mariana Islands, foreign corporations need to:

Select a business name within the territory: Be sure your chosen name isn’t already in use.
Submit an application to the Northern Mariana Islands Department of Commerce: Provide a Delaware Certificate of Good Standing.
Pay the $100 filing fee to the Northern Mariana Islands Department of State: Processing may take two to four weeks.

Compliance Requirements

To maintain your corporation’s legality and continued operation in the Northern Mariana Islands:

Maintain a registered agent with a physical address in the territory: A registered agent is your corporation’s point of contact between local authorities.
File the annual report updating any changes within the company: Provide updated information on legal business name, registered agent, board members, and officers’ information.
Pay the business gross revenue tax and corporate income tax:
Submit your corporation’s annual report: The cost is $50.

Registered Agent

Designating a registered agent in the Northern Mariana Islands is essential. If your corporation doesn’t have a physical address, using a registered agent service can help manage government notices efficiently.

Registered agents are required for foreign corporations.
Their contact details cannot be a P.O. box.

Annual Reporting

Every year, file an updated statement with the Northern Mariana Islands, providing details like your legal business name, registered agent, board members, and officers’ information. The filing fee for the annual report is $50.

Business Gross Revenue Tax and Corporate Income Tax

Comply with the Northern Mariana Islands’s Business Gross Revenue Tax, a tax on the total receipts from your corporation’s operations within their jurisdiction, or their Corporate Income Tax.

Hiring Employees in the Northern Mariana Islands

When you hire new employees or independent contractors in the territory, you must report them to the Northern Mariana Islands Office of the Attorney General within 20 days of the date of hire. You can report new hires via mail, fax, email, or hand delivery. The Northern Mariana Islands provide comprehensive information on your hiring responsibilities.