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Northern Mariana Islands

Overview

The Northern Mariana Islands, together with Guam to the south, make up the Mariana Archipelago. It is a self-governing commonwealth in association with the United States. It is composed of 22 islands and islets in the western Pacific Ocean. The commonwealth is a part of the Mariana Islands, a chain of volcanic mountain peaks and uplifted coral reefs. The estimated population of the CNMI is 51,659 (July 2021 est.) The Trump Administration announced $2,571,650 in fiscal year 2020 grant funding to support the Commonwealth of the Northern Mariana Islands (CNMI) through the U.S. Department of the Interior’s Office of Insular Affairs’ (OIA) Technical Assistance Program. The Commonwealth of the Northern Mariana Islands benefits from substantial subsidies and development assistance from the federal government of the United States. U.S. air and naval military stations add to the resident population and the local economy. The economy also relies heavily on tourism, which has recovered over the past few years, as Chinese and Korean tourists have replaced Japanese tourists. The CNMI had successfully used its position as a free trade area with the U.S., while at the same time not being subject to the same labor laws, such as minimum wage, to allow garments produced in the CNMI to be labeled “Made in USA” without having to comply with all U.S. labor laws.

Tourism is the principal economic activity. Saipan and Rota are the main tourist centres and offer luxury hotels. The tourists are mainly Japanese and Americans. Subsistence farming, including the cultivation of taro, cassava, yams, breadfruit, vegetables, and bananas, is practiced extensively by many islanders to supplement their cash income. Investors from Korea, China, and the Philippines have expanded the islands’ production of clothing and accessories, making the garment industry a major component of the Northern Marianas economy. The investors are attracted by duty-free and quota-free access to the U.S. mainland.

The CNMI has one of the lowest effective corporate income tax rates in the world. Economic policies in the Commonwealth Of The Northern Marianas encourage a free competitive market place in which the private sector operates with a minimum restraints. Most of the regulations directed toward business operations are designed for the welfare of businesses , the environment and the public at large. All non-United States citizens licensed to do business in the Commonwealth must also possess a Commonwealth immigration permit. All income from the islands earned by nonresidents which are not effectively connected with a business is taxed at a flat rate of 30%. However, if the taxpayer files an income tax return in the islands, he is entitled to 100% rebate on this tax.