Historically, Mauritius was known for being a well-utilised port of call for ships engaged in the trade of spices between Asia and Europe. A country successively occupied by the major naval nations of Holland, France and Britain, modern Mauritius never really considered the niche it could craft as a jurisdiction for ship registration. Client Director, Jimmy How explores how, in recent times, that is now changing.
On 20 February 2019, the Economic Development Board of Mauritius organised a Ship Registry & Ancillary Services Workshop that was moderated by Professor George Theocharidis from the World Maritime University and Mr Stephen Drury, partner at the law firm Holman Fenwick Willan (HFW). Typically, jurisdictions like Panama, Liberia and Marshall Islands have dominated the shipping registry market, primarily due to less strict maritime regulations and the ability of employing cheaper foreign seafarers. Other popular jurisdictions include the Bahamas, Malta, Singapore, Hong Kong and Palau.
Mauritius has the infrastructure and incentives to be an alternative jurisdiction of choice
Shipping registry in Mauritius is still in its infancy stage, although the country has developed a niche market for the registry of dredging vessels. The opportunity dates back to the 1990s, when the potential of Mauritius as an attractive location for ship registry was accidently discovered by Belgian construction/dredging company Jan de Nul Group. Jan de Nul Group oversaw the artificial Palm Jebel Ali construction in Dubai in 2002 and most of its dredging fleet are registered in Mauritius.
Considered a white-listed jurisdiction having ratified all relevant international protocols - safety, protection of environment, pollution control, security - Mauritius has the required infrastructure and incentives to position itself as an alternative jurisdiction of choice for ship registry:
- Stable government and sound legal system
- Educated workforce
- Law firms and licensed management companies to assist in ship registration and its corporate management
- Crew management
- Bank financing to mortgage ships
- Ship insurance
- Low tax jurisdiction
- No labour restriction on employment of foreign seafarers
- Seafarers are not taxed on their personal income
- Dry dock yards to provide ship maintenance
- Surrounded by rich territorial waters that are under-exploited
Requirements for ship registration in Mauritius
Mauritius ship registration is regulated by the Merchant Shipping Act 2007 and the Merchant Shipping Regulations 2009. The Director of Shipping under the Ministry of Ocean Economy, Marine Resources, Fisheries & Shipping has supervision of the law and regulations as well as the shipping vessels and seafarers. To be eligible for registration in Mauritius, the ship must be aged less than 15 years, it should carry a liability insurance and comply with all the international protocols/conventions related to safety, protection of environment and security. If the ship's weight is over 500 tons, it must present a certification from a recognised international classification society. Based on current laws and regulations, the ship’s ownership shall be restricted to Mauritius citizens, corporate entities, partnerships and sociétés incorporated in Mauritius.
Mauritius also has several well-established local and international banks and other financial institutions that can provide financing and insurance products for shipping vessels. The net effective tax regime for holding companies and entities engaged in ship leasing in the global business sector varies from 0% to 3 %. It is important to note that seafarers employed on ships are not considered resident in Mauritius and therefore are exempt from income tax.
The country has vast untapped marine resources and boasts an exclusive economic zone of 2.3 million square kilometres
The port capacity has been increased through land reclamation and additional docking areas constructed with dry dock yard facilities for ship repairs and maintenance. Moreover, the Mauritian authorities have been pushing to diversify the economy with an extensive land-based oceanic programme. The country has vast untapped marine resources and boasts an exclusive economic zone of 2.3 million square kilometres. As foreign investors look to exploit possibilities such as fishing, the demand for shipping registration is likely to grow.
Despite Mauritius having the necessary attributes and incentives to attract shipping registry, there are still certain areas where it can improve to increase its attractiveness and competitiveness. These include:
- Open registry (online to reduce the processing time)
- Revision of its current laws and regulations with regards to ship age and ownership
The Director of Shipping has indicated that it is developing an online system to streamline the ship registration process. Furthermore, the current regulations are being revisited and amendments will be proposed with regards to extending the ship age subject to a seaworthiness certification. The law will also be amended to allow non-Mauritian citizens residing in Mauritius to register their ships locally to cater for the needs of a growing number of high-net-worth expatriates owning luxury yachts.
Some 25 years ago, Mauritius entered the global business arena armed only with political will and a favourable business environment. It has since earned international recognition for the registration and management of cross-border business focussed on the emerging markets of Africa and Asia. The parallel with ship registration can be made. What is obvious today is that the Mauritian government has the same strong will to make ship registration another element of a compelling offer to woo international business operators.
Ocorian has been a trusted partner in maritime structures for nearly 50 years, working with many of the major international law firms, brokers and advisors involved in shipping and with many shipping jurisdictions including the Marshall Islands, Liberia, BVI, the Bahamas and Jersey. With regard to ship registry in Mauritius, Ocorian AMEA offer the provide the following services:
- Assistance with the establishment and administration of appropriate structures to hold the vessel
- Filing of application & follow-up with relevant authorities
- Crew management
If you would like to learn more about our shipping capabilities in Mauritius, please get in touch with us.