COREDO > DAO LLC in the Marshall Islands

DAO LLC in the Marshall Islands

The Marshall Islands became the first jurisdiction in the world to officially recognise DAOs as legal entities and introduce the DAO LLC structure for decentralised projects. The jurisdiction offers a flexible legal framework for DAO and Web3 projects, providing legal certainty, limited liability protection for participants, and convenient conditions for international operations.

Since 2016, COREDO has been assisting clients with DAO LLC registration in the Marshall Islands, providing full support — from document preparation to company registration.

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Cost of the service
from 10 000 EUR

Regulatory Framework

The legal basis for registering a DAO LLC in the Marshall Islands comprises a set of legislative acts adopted and amended between 2022 and 2024.

Decentralized Autonomous Organization Act 2022 (P.L. 2022-50) is the principal law defining the status of DAOs as legal entities. The Act establishes the procedure for creating a DAO LLC, requirements for incorporation documents, principles of governance through smart contracts, and participant voting rules. Under this Act, a DAO LLC possesses full legal personality: it can own property, enter into contracts, engage service providers, and act as plaintiff or defendant in court.

Limited Liability Company Act 1996 is the foundational law on limited liability companies, on the basis of which DAO LLCs are organised. The DAO Act supplements it with special provisions adapted for decentralised structures.

Decentralized Autonomous Organization Regulations 2024 is a subordinate act adopted in 2024 to clarify procedural matters relating to registration, reporting, and compliance of DAO LLCs. These regulations have significantly accelerated the registration process.

Non-Profit Entities (Amendment) Act applies to non-profit DAO LLCs and establishes additional rules for organisations that do not pursue profit-making objectives.

DAO LLC registration is handled by the Registrar of Corporations of the Republic of the Marshall Islands. In 2022, the RMI government entered into a public-private partnership with MIDAO, which performs the functions of a registered agent for DAO LLCs.

Types of DAO LLC

The legislation of the Marshall Islands provides for two main types of DAO LLC, each with its own tax and organisational features.

For-Profit DAO LLC

A for-profit DAO LLC is intended for revenue-generating projects: DeFi protocols, decentralised exchanges, NFT marketplaces, investment DAOs, and other commercial cryptocurrency projects. Taxation: 3% GRT (Gross Revenue Tax) on gross revenue. Capital gains and dividends are taxed at a rate of 0%. The organisation is required to report its revenue annually to the registrar.

Non-Profit DAO LLC

A non-profit DAO LLC is suitable for open-source projects, governance protocols, grant programmes, and other initiatives that do not distribute profits among participants. Non-profit DAO LLCs are exempt from corporate tax, capital gains tax, and withholding tax. Reporting requirements are minimal, and regular tax reporting is not required.

Series DAO LLC

Additionally, the legislation allows for the creation of a Series DAO LLC — a structure comprising multiple segregated sub-DAOs with separated liability. Each series (sub-DAO) has its own assets, liabilities, and participants, while the liabilities of one series do not extend to others. This model is particularly in demand among large ecosystems with multiple independent business lines.

Advantages of the Jurisdiction

The Marshall Islands provide a number of significant advantages for cryptocurrency and DeFi projects considering DAO LLC registration.

First sovereign state to recognise DAOs

The Marshall Islands became a pioneer in the legal recognition of decentralised autonomous organisations, creating a solid legal foundation and precedent for other jurisdictions.

Limited liability of participants

DAO LLC participants bear no personal liability for the debts and obligations of the organisation. In the event of litigation, liability is limited to the assets of the DAO LLC itself.

Tax efficiency

Non-profit DAO LLCs are fully exempt from taxes. For-profit DAO LLCs pay only 3% GRT on gross revenue, while capital gains and dividends are not taxed.

No physical presence requirements

There is no need to open an office in the Marshall Islands, appoint local directors, or hire local employees. All management is carried out remotely.

Recognition of smart contracts

The legislation expressly recognises governance through smart contracts, automated voting, and decentralised decision-making mechanisms, eliminating legal uncertainty for on-chain governance.

Governance tokens are not securities

The law expressly provides that governance tokens without economic rights are not considered securities, ensuring legal certainty for tokenised governance models.

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Requirements for DAO LLC Registration

To register a DAO LLC in the Marshall Islands, it is necessary to fulfil a number of mandatory requirements established by the Decentralized Autonomous Organization Act 2022 and Regulations 2024.

No minimum share capital:

RMI legislation does not provide for minimum capital requirements for DAO LLCs.

Registered Agent:

A DAO LLC must at all times have a registered agent in the territory of the Marshall Islands. The agent ensures communication with the regulator and maintains the registered office of the organisation.

Certificate of Formation:

The incorporation document must contain a statement that the organisation is a DAO, include the information required by the Limited Liability Company Act, and provide a publicly accessible identifier of the smart contract used for the governance of the DAO.

Operating Agreement:

The management agreement must define the purposes of the DAO, the rights and obligations of participants, voting mechanisms, dispute resolution procedures, liability limitations, and the architecture of smart contracts.

Beneficial Ownership Information Report (BOIR):

Upon registration and annually (from 1 January to 31 March), the DAO must file a report on beneficial owners — individuals controlling more than 25% of participation interests or votes. The report includes the full name, date of birth, address, passport number, and wallet address(es) associated with the DAO.

Foreign Investment Business License (FIBL):

The foreign investment business licence is obtained as part of the registration package.

KYC of participants with 25%+ governance:

Participants holding more than 25% of governance rights are required to undergo Know Your Customer procedures, providing identification and proof of address. Other participants may be accepted without undergoing individual KYC procedures.

Description of smart contract logic:

The DAO must provide a brief description of the smart contract logic used for governing the organisation, to ensure transparency and accountability.

Cost of COREDO Services

COREDO provides full support for DAO LLC registration in the Marshall Islands. The cost of services includes the preparation of all necessary documents and interaction with the registrar.

DAO LLC registration

from EUR 10,000 + VAT

Preparation of incorporation documents (Certificate of Formation, Operating Agreement).
Registered Agent services for 1 year.
Registered Office for 1 year.
Assistance in preparing the Operating Agreement taking into account the smart contract architecture.
FIBL and Certificate of Formation processing.
Filing of documents with the Marshall Islands registrar.

Annual renewal

EUR 8,000 + VAT

Renewal of Registered Agent service.
Renewal of Registered Office service.
Preparation and filing of the annual BOIR.
Maintaining documentation up to date.
Communication with the registrar.

Payment Terms

Payment for DAO LLC registration services is made according to the following schedule:

First stage: 50% of the service cost is paid as an advance before the preparation of documents begins. Upon receipt of the advance payment, COREDO specialists commence the development of incorporation documents and the collection of necessary data.
Second stage: 50% of the cost is paid after the completion of preparation and before filing documents with the Marshall Islands registrar.
Annual renewal is paid in a lump sum before the start of each subsequent service year.

List of Documents

To register a DAO LLC in the Marshall Islands through COREDO, the following documents and information must be prepared.

Documents of founders (founding members): a valid international passport or other identification document of all founders, proof of residential address (bank statement, utility bill — no older than 3 months).

KYC for beneficial owners (UBO with 25%+ governance): full legal name, date of birth, residential address, valid passport number, cryptocurrency wallet address(es) associated with the DAO.

Information about the DAO: the proposed name of the DAO LLC (must contain “DAO LLC”), a description of the purposes and types of activities, a description of the governance model (on-chain / off-chain / hybrid), the public identifier of the smart contract (contract address, network), and a description of the smart contract logic.

Organisational documents: a draft Operating Agreement (if available; COREDO provides assistance in its preparation), information about the voting structure and distribution of governance rights, and information about dispute resolution mechanisms.

Additionally: information about the type of DAO LLC (For-Profit or Non-Profit), preferences regarding the structure (standard or Series DAO LLC).

DAO LLC Registration Procedure

The process of registering a DAO LLC in the Marshall Islands with COREDO’s support includes several sequential stages. The total timeframe is 30 to 60 days.

Initial consultation and data collection (1–2 weeks).

COREDO specialists conduct an initial consultation, determine the optimal type of DAO LLC (For-Profit or Non-Profit), collect the founders’ documents, and carry out KYC verification of beneficial owners with 25%+ governance.

01

Preparation of incorporation documents (1–2 weeks).

COREDO develops the Certificate of Formation and Operating Agreement taking into account the specifics of the project, the smart contract architecture, and the DAO governance model. At this stage, the description of the smart contract logic and documents for the FIBL are also prepared.

02

Filing documents with the registrar (1 week).

The complete package of documents is submitted to the Registrar of Corporations of the Marshall Islands. COREDO ensures communication with the registrar and responds promptly to requests for additional information.

03

Obtaining the Certificate of Formation and FIBL (1–3 weeks).

After reviewing the documents, the registrar issues the Certificate of Formation and Foreign Investment Business License. From the moment these documents are obtained, the DAO LLC acquires the status of a legal entity.

04

Post-registration support.

COREDO delivers the complete package of incorporation documents to the client, provides guidance on annual reporting (BOIR), and ensures ongoing support through the Registered Agent.

05

Our Experts

DAO LLC registration in the Marshall Islands at COREDO is supported by qualified specialists with many years of experience in cryptocurrency regulation and corporate law.

Pavel Kos

Head of Legal at COREDO. Has been with the company since 2017 and has headed the legal team since 2020. Specialises in licensing of cryptocurrency projects, corporate law, and support of complex regulatory procedures across multiple jurisdictions.

Basang Ungunov

Lawyer at COREDO. Holds a Master of Laws degree (LLM). Specialises in the preparation of legal documents, legal review of cryptocurrency projects, and support of registration procedures.

Frequently Asked Questions

What is a DAO LLC in the Marshall Islands?

A DAO LLC is a legal entity in the form of a limited liability company registered in accordance with the Decentralized Autonomous Organization Act 2022 of the Republic of the Marshall Islands. This structure provides decentralised autonomous organisations with legal personality, limited liability for participants, and the ability to interact with banks and counterparties.

Is a DAO LLC a crypto licence?

No. A DAO LLC is a form of legal entity registration, not a licence to carry out cryptocurrency activities. However, registering a DAO LLC provides a legal wrapper for a cryptocurrency project, enabling it to legally enter into contracts, own assets, and conduct business.

What taxes does a DAO LLC pay?

A for-profit DAO LLC pays 3% GRT on gross revenue, while capital gains and dividends are taxed at a rate of 0%. A non-profit DAO LLC is fully exempt from taxation.

Is physical presence in the Marshall Islands required?

No. Registration and operation of a DAO LLC does not require opening an office, appointing local directors, or hiring employees in the Marshall Islands. Having a Registered Agent, which COREDO provides, is sufficient.

Which DAO participants must undergo KYC?

Beneficial owners — individuals controlling more than 25% of the DAO LLC’s governance rights — are required to undergo KYC. Other participants (governance token holders with a share of less than 25%) may be accepted without individual identification.

How long does registration take?

With COREDO’s support, the full process of registering a DAO LLC in the Marshall Islands takes 30 to 60 days, including document preparation, KYC verification, and review of the application by the registrar.

Can I create multiple sub-DAOs within a single structure?

Yes. The legislation of the Marshall Islands allows for the creation of a Series DAO LLC, where each series (sub-DAO) has segregated assets and liabilities. The liability of one series does not extend to others.

Are governance tokens considered securities?

No. The Decentralized Autonomous Organization Act 2022 expressly provides that governance tokens that do not grant economic rights (profit participation, dividends) are not considered securities.

Submit Application

COREDO has been providing full support for DAO LLC registration in the Marshall Islands since 2016. Our specialists will help you choose the optimal DAO structure, prepare all the necessary documents, and complete the registration procedure in the shortest possible time. Contact us for an individual consultation.