Due to its strategic location at the entrance of the Western Mediterranean, Gibraltar has historically been a maritime centre, and has naturally evolved its own portfolio of maritime services including a Ship Register. The procedures for registering a ship are simple and efficient, and the current tax regime makes Gibraltar an attractive venue for registering ships.
Gibraltar was captured in 1704 by the British, and has remained British since. Gibraltar now enjoys British Dependent Territory Status, with a measure of self-government in what are termed "defined domestic matters", with Britain enjoying responsibility for Gibraltar's foreign affairs. As such, Gibraltar is part of the EU under Article 227(4) of the Treaty of Rome, by virtue of Britain's membership, with special derogations from the Common Agricultural Policy, the Customs Union, and VAT.
The Gibraltar Register
Given its British Dependent Territory Status, ships registered in Gibraltar are British Ships entitled to all the protections and privileges afforded vessels registered at other British Ports of Registry, and fly the red ensign defaced with the Armorial Bearings of Gibraltar, the Castle and Keys.
Additionally, the Gibraltar Register is classed as an EU "Member State's Register" as defined in the Annex to the Official Journal of the European Communities (97/C 205/5 No. C 205/15). In a communication from the Commission dated the 11th May 2006 to the European Parliament, The Council and others the Commission has updated and rectified the interpretation of Council Regulation (EEC) No 3577/92 applying the principle of freedom to provide services to maritime transport within Member States (Maritime Cabotage.) The Commission has pointed out that Ships registered in Gibraltar are entitled to have access to Maritime Cabotage under the same conditions as any ship registered in a Member State on the basis that the Community set of rules in the field of Maritime Transport is entirely applicable to ships registered in Gibraltar.
Gibraltar Port became a Category I Port of Registry on the 19th March 1997 when its Merchant Shipping (Registration) Act 1993 ("MSRA") came into force, bringing it into parity with Bermuda, the Cayman Islands and the Isle of Man. The Maritime Administrator, operating under the Gibraltar Government's Ministry of Tourism and Transport, heads the Registry. Under Section 6 of the MSRA, the Maritime Administrator is required to keep a Register of Ships registered, or provisionally registered, including Bareboat Registrations, as well as a register of Ships under Construction.
The Registry does not run on a commercial profit-making basis, but rather on the basis of its stated objectives of "facilitating international trade and commerce by providing the service of a maritime register committed to the highest standards of safe operation of ships and the protection of the marine environment". Whilst the Gibraltar Government carries out its role, functions and obligations as a flag state (as well as a port state), it does so under the guidance provided by the United Kingdom, which is the primary party to all International Conventions.
The Registry has enjoyed significant growth in the last few years particularly as a flag of choice for those shipping companies wanting to conduct intra European trade. This is as a direct result of Gibraltar registered ships being considered as vessels of a Member State's Register and the favourable tax climate for shipping companies in Gibraltar. These advantages, coupled with a well run Register which is focused on the needs of its clients and responsive to their concerns, has cemented the Gibraltar Registry as a successful and progressive Port of Registry.
PRINCIPAL FEATURES OF THE GIBRALTAR REGISTRY AND FLAG
All types of Vessel are registrable under the Gibraltar Flag save for the following exceptions:
- A Ship whose first construction was completed more than twenty years before commencement of the year in which application is made unless the written approval is first obtained from the Maritime Administrator, whose own approval is subject to the consent of the Minister of Tourism and Transport;
- Ships with a nuclear reactor;
- Fishing Boats; and
- Ships whose condition is unsatisfactory so far as safety and pollution are concerned.
Section 7 of the MSRA sets out the basic qualification of persons to own a Gibraltar registered Ship which are as follows:
- Bodies corporate or legal entities incorporated, established or registered in Gibraltar
- Bodies corporate or legal entities incorporated, established or registered in a member state of the EU provided that they either have a principal place of business in Gibraltar or have appointed a Gibraltar resident to act as their representative person
- Foreign Maritime Entities being a lawfully existing foreign entity whose place of incorporation, establishment or registration, provides the power to own and operate ships, and permits it to sue or be sued in the name of the entity
- British Citizens
- British Dependent Territories Citizens
- British Overseas Citizens
- Persons who under the British Nationality Act 1981 are British Subjects
- Persons who under the Hong Kong British Nationality Order 1986 are British nationals (overseas)
- Citizens of the Republic of Ireland
- Nationals of any member state of the European Union
- Nationals of any state party to the European Economic Agreement
The above shows the flexibility of the register as regards ownership: a particular advantage to ship owners who already have established companies to own their vessel under a different flag and are considering re-flagging to Gibraltar Bareboat Charter Registration
Provisional & Bareboat Charter Registration
The legislation permits the provisional registration while a ship is at sea (Section 19), and bareboat charter registration into and out of the Gibraltar register (Sections 32 and 33). In the case of the former, a Provisional Certificate of Registry will be issued pending the permanent registration of the Vessel, and will have validity for a period of 90 days. In the case of the latter, the applicant charterer must be in possession of the ship under the Bareboat Charter, and must be a qualified person to own a British Ship as set-out above. The applicant, if incorporated outside of Gibraltar, must appoint a Gibraltar resident to act as its Resident Agent. Additionally, the Applicant must execute an undertaking that whilst the Ship is bareboat registered under the Gibraltar Flag, it will not fly the flag of any other registry, nor show as the home port any port other than Gibraltar. The consent of the ultimate owner, mortgagee (if any), and the flag state of the primary register must also be obtained to finalise the bareboat registration. Apart from the above and providing a copy of the Bareboat Charter to the Authorities, the requirements for registration are the same as for full registration.
Owners of Gibraltar registered ships of over 500GRT and over, and other ships engaged in international voyages, must obtain in respect of each vessel a Safe Manning Document (SMD) issued by the Maritime Administrator, thereby ensuring that manning requirements are met. Manning requirements follow the international conventions ratified by the United Kingdom and thus contain no restriction on nationality of officers and crew, except in the case of strategic vessels. These require that ships be manned by Crew who are certified and in possession of the appropriate Certificates of Competence or other recognised documents in accordance with STCW. The Countries recognised by Gibraltar for the purpose of issuing Certificates of Competency and Certificates of Equivalent Competency are:
|Finland||Republic of Ireland|
|Greece||Serbia & Montenegro|
Fees & Costs
Fees and other costs associated with registration under the Gibraltar Flag are as follows:
|Registration of a Foreign Maritime Entity||£200.00|
|Registration of a Ship||£500.00|
|Re-issue of Certificate of Bareboat Registry||£250.00|
|Renewal of full Registration (every 5 years)||£100.00|
|Change of Name of Ship||£300.00|
|Transfer of Ownership||£300.00|
|Transfer of Registration||£300.00|
|Issue of Certificate of Deletion||£100.00|
|Issue of Duplicate Certificate||£100.00|
|Recording of Mortgage or Discharge thereof||£200.00|
|Transfer of Mortgage||£200.00|
|Issue of SMD/Statutory Cert./Exemption||£100.00|
|Hourly fees for survey/audit (Gibraltar Surveyor)||£90.00 plus travel time at £45.00 per hour|
Ships registered at the Gibraltar Registry are required to pay an annual tonnage tax based on the Gross Tonnage of the Vessel as follows:
|Up to and including 50,000 GT||£700 plus £0.07 per GT|
|From 50,001 to 100,000||£750 plus £0.07 per GT up to 50,000 GT plus £0.04 per GT in excess of 50,000|
|100,001 or more||£700 plus £0.07 per GT up to 50,000 GT plus £0.04 per GT from 50,001 to 100,000 GT plus £0.02 per GT in excess of 100,000 GT subject to a maximum annual tonnage tax payable in the sum of £9,000|
In order to facilitate the expeditious registration of a Ship under the Gibraltar Flag it is important to have the following information made immediately available to the Registry:
- Proposed Name (and previous name if any)
- Type of Ship (passenger/Tanker/Bulker etc.)
- When and where built
- Yard number (in case of new buildings still not registered)
- Present Registry
- IMO Number
- Length and Breadth
- GT and NT
- Power in KW
- Classification Society
- Name, address and details of local representative
- Name, address and details of operator/technical managers
- Operator's Copy of ISM Document
- Existing SMD and ISM-SMC (if applicable)
- Trading are/area of operation
- When and where proposed registration is to take place
- Name, address and details of agents at port of Survey
The following documents are required for the registration of the Vessel:
- Name approval confirmed
- an application for registration signed by the qualified person or representative person together with the authority under which such representative person signed the application
- a Certified true copy of the applicant's Certificate of Incorporation, and Memorandum & Articles of Association, together with a Certificate of Good Standing, in the case of a body corporate
- a Declaration of Eligibility
- a Builder's Certificate together with any Bills of Sale affecting the Ship. If the Builder's Certificate cannot be found, a declaration signed by the applicant together with the Bill of Sale transferring title to the applicant.
- a Declaration that the Ship is free from all maritime liens and encumbrances or alternatively the written consent of all Mortgagees to the registration of the Ship in Gibraltar
- a Certificate of Confirmation of Class for an existing Ship, or a Certificate of Seaworthiness or an Interim Certificate of Class for a newly built ship dated no earlier than 10 days before the date of registration is submitted
- proof of Liability Insurance provided by a Member of the International Group of P & I Clubs confirming liability insurance coverage which insurance shall cover the default of the owners repatriation obligations
- proof of insurance cover for Oil and other Pollution
- bareboat charter (in the case of a bareboat charter registration)
- application to register a Foreign Maritime Entity (if applicable)
- Certificate of Measurement & Tonnage
- Appointment of Registered Agent
- Appointment of Representative Person
- Certificate of Deletion in respect of previous flag within 60 days from the date of registration
Gibraltar registered ships are surveyed specially for flagging in purposes by a surveyor appointed by the Maritime Administrator. Gibraltar uses the services of classification societies which are full members of the International Association of Classification Societies and are also recognised by the UK-MCA The statutory services can only be performed by these exclusive surveyors. All functions performed by the Classification Societies on behalf of the Administration, are closely audited and monitored by the Gibraltar Administration or the UK-MCA on its behalf. Additionally, Gibraltar ships are surveyed by its own surveyors at least once in every five years, and the initial issue of Passenger Ship Safety Certificate, Cargo Ship Safety Equipment Certificate, International Oil Pollution Prevention Certificate, Certificate of Fitness and ISM certification is looked after by the Administration directly, using the services of the UK-MCA Surveyors.
Upon satisfactory completion of the Measurement & Tonnage and Flagging-in Surveys, and upon satisfactory submission of the documents set-out above, the Maritime Administrator will issue a Carving & Marking Note setting out the Name, Official Number, Tonnage, and home port of Registry of the Vessel, all of which particulars must be marked on the Vessel. An authorised surveyor or other person duly authorised on behalf of the Administration must certify such marking. Upon confirmation of receipt by the authorised surveyor of the certified carving and marking note, the Registry will issue the Certificate of Registry.
Parallel to the application for registration, but separate thereto, the Applicant must apply for the issue of a Ship Radio Licence and the issue of the required MMSI number from the Wireless Officer at the Gibraltar Regulatory Authority. The Applicant must give full details of all the communication equipment aboard the Ship, and must appoint a duly recognised Accounting Authority and PSA, accompanied by the fee of £75.00. Upon issue of the Certificate of Registration, the Wireless Officer issues the Ship Radio Licence, which is renewable on an annual basis.
SHIP FINANCE AND TAX
Gibraltar maritime law is wholly English based. As such, Gibraltar tends to follow the UK in Ship Finance methodology. It is open to the parties to elect the choice of law to govern the loan agreement and the security granted, although it is always advisable to make the Mortgage and deed of Covenant subject to Gibraltar Law, even where the remainder of the ship finance package is to be regulated by another law. The fact that there are no exchange controls also enables the parties to denominate the loan in any currency.
The statutory mortgage is in short form, and always accompanied by a Deed of Covenant made in support of the Mortgage. If the assignment of insurances and earnings, and say, charge of deposit accounts, is to be regulated by Gibraltar Law then all documents follow English Law precedent. If the loan is made to a Gibraltar Owning company, then all security must be registered against the Company at the Gibraltar Companies' Registry, with only the mortgage requiring registration at the Ship's Register.
Most significantly, Section 6 (2) of the Income Tax Act which imposed a charge to tax on ship owners on the basis of residence was repealed in December 2005. Ship owners will be liable to pay income tax in Gibraltar in respect of income accruing in, derived from, or received, in Gibraltar in respect of any trade or business. However, the Commissioner of Income Tax has confirmed that a ship owning company does not accrue or derive its income in Gibraltar if:
- The ship operates outside Gibraltar;
- It does not carry passengers or cargo to or from Gibraltar;
- The income is not remitted or banked in Gibraltar;
The Commissioner of income Tax has also recently directed that in the case of ship owning companies there will be no liability of a lender to pay income tax or requirement for withholding if:
- The lender is not resident in Gibraltar;
- The primary security is situate outside Gibraltar and;
- Interest payments are met from sources of income external to Gibraltar.
The simple and efficient procedures in registering a ship in Gibraltar make this jurisdiction an attractive choice for ship owners to register their ships but for the ship owner, at an operational level, it is also significant that the Gibraltar Register is classed as an EU "Member State's Register" and that it is on the White List of the Paris MOU. Furthermore, the tax regime currently applicable is an additional consideration which makes Gibraltar attractive for the registration of ships.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.