The Merchant Shipping Act 1976 (the "Act") provides a comprehensive scheme for the registration of ships under the Bahamas flag and is aimed at encouraging the use of The Bahamas Registry by foreign ship owners.
There are currently over 1500 vessels registered under the Bahamas flag making the Bahamas the world's third largest fleet and an increasingly preferred ship registry.
The Bahamas Maritime Authority was established on the 1st July, 1995 and is a semi-autonomous, government-owned corporation which focuses on maintaining the highest reputation of the Bahamian fleet and that high standards are maintained on Bahamian flag vessels. The Bahamas Maritime Authority has offices located in New York, London and Nassau from which it can advise and assist ship owners and their representatives.
The Bahamas is a member of the International Maritime Organisation and as such provides an effective conduit through which ship owners may voice their opinions and concerns.
Some of the other main advantages of registering a vessel under the Bahamian flag are set out below:-
AVAILABILITY OF NAUTICAL INSPECTORS
In addition to the statutory surveys conducted by the Classification Societies, 350 nautical inspectors have been appointed in over 200 ports worldwide to undertake safety and crew condition inspections on board Bahamian ships and are available to assist ship owners if need be.
FOREIGNERS CAN HOLD DIRECT TITLE TO A BAHAMIAN VESSEL
As long as the ship is engaged in "foreign going trade" i.e. engaged in trade that is not exclusively within The Islands of The Bahamas or between The Bahamas and the East Coast of Florida, a foreign owner, irrespective of nationality or place of incorporation, can hold title to a Bahamian flag ship either directly or through a corporate entity.
The Bahamas does not impose any tax on income, capital gains or similar financial revenues. Foreign owned vessels of more than 150 GRT are also exempt from Bahamas custom duties and documentary stamp taxes, whether they call at local ports or not. In addition, all instruments used for carrying into effect Part II of the Act, such as the prescribed forms required for the registration of ships and mortgages of Bahamian vessels, are exempt from stamp duty.
The Bahamas offers competitive registration fees. The minimum registration fee is $2,400 for vessels of less than 2000 NRT and the maximum fee is $27,500 for vessels of 25,000 NRT or over. Ships of 5000 NRT or less pay $1.20 per NRT. Ships of 5001 NRT or more pay $1.10 per NRT. Annual fees are payable on 10% of the registration fee plus $1,500.
Foreign officers and crew members may serve on Bahamian vessels provided the officers hold foreign professional certification acceptable to the Bahamas Maritime Authority and a licence has been issued to them by the Bahamas Maritime Authority. Upon production of the officers' Certificate of Competency granted by a competent recognised foreign authority and upon payment of a prescribed fee, a Bahamian licence of qualification will be issued to the officers. The Bahamas does not recognise licences issued by Panama, Honduras or Liberia.
Where The Bahamas is the primary country of registration, bareboat or dual registry is allowed between the owner of a Bahamian ship and a secondary country that allows for dual registry. Therefore, ships may operate under another flag in accordance with the bareboat charter requirements whilst maintaining registration under the Bahamian flag. The Bahamian registration will be deemed suspended for the duration of the bareboat or dual registration.
Ships may also be bareboat chartered into The Bahamas Register thus enjoying the privileges of a Bahamian ship, if the following criteria are met:-
the laws of the primary country allow it; and
a bareboat charter is entered into with a body corporate in The Bahamas.
Foreign-owned vessels may be registered in The Bahamas if they are less that 12 years old, at least 1,600 net registered tons (NRT) and engaged in foreign trade. If a ship is more than 12 years old and is under 1,600 NRT, special permission has to be obtained from the Minister of Transport for the ship to be registered on the Bahamas Register. Permission is usually granted subject to a satisfactory inspection conducted by a nautical inspector (if the vessel is not in class) or if a certificate is obtained from one of the 7 Classification Societies recognised by The Bahamas.
The contents of this article are intended to provide a general guide to the subject matter. Advice should be sought about specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
While arbitration is a frequently used and popular dispute resolution mechanism in the United Arab Emirates, there is a perception that the law in the UAE can be exploited by an unsuccessful party to an arbitration to frustrate the recognition and enforcement of the arbitral award.
The recent decision of the Cayman Islands Grand Court in RMF Market Neutral Strategies (Master) Limited v DD Growth Premium 2X Fund (unreported, 17 November 2014) is a further reminder of the serious challenges associated with bringing clawback actions against "innocent" third party fund investors who have received redemption proceeds from a Cayman Islands fund in the period leading up to the fund's collapse.
The BVI Arbitration Act came into force on 1 October 2014 and epitomises the BVI's support for arbitral proceedings both within the jurisdiction and abroad.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”