Jurisdiction: Portugal

Yacht Registration

A Guide to the Advantages of Yacht Registration in: Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta

Posted on | by Megan Raguro | Leave a Comment on A Guide to the Advantages of Yacht Registration in: Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta

Introduction

For high-net-worth individuals and families, yachts represent not just a mode of transport but also a symbol of luxury and leisure. Owning a yacht in the optimum manner involves various important considerations, including the jurisdiction of registration, which can have a significant impact regarding; tax implications, regulatory compliance, and operational flexibility.

Dixcart Air Marine specialises in assisting clients with yacht registration across different jurisdictions, offering expertise and guidance throughout the process.

Registration of Yachts

The registration of a yacht involves choosing the right jurisdiction, considering factors such as tax regulation, legal framework, and administrative procedures.

Dixcart Air Marine provides comprehensive services, including; coordination of the registration process, advice on tax efficiencies, and ongoing administration and management.

In addition, we can assist with; special purpose vehicles, accounting, customs arrangements, and value-added services such as directorships. Our expertise extends to import and export formalities, asset registration, and advice on VAT and corporate tax.
We handle ongoing registration requirements and closely monitor costs, budgets, and cash flow. We can also assist with crewing, including contracts and payroll.

Choosing the Right Jurisdiction

Selecting the appropriate jurisdiction for yacht registration is crucial. Each jurisdiction offers unique advantages, catering to different needs and preferences. Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta are among the sought-after jurisdictions for yacht owners due to their; favourable tax regimes, regulatory framework, and maritime expertise.

Yacht Registration in Cyprus

Cyprus emerges as an attractive jurisdiction for yacht registration, offering competitive registration fees, low annual costs, and favourable tax provisions. The Cyprus shipping registry has witnessed significant growth and maintains high-quality standards.

Recognised on the Paris and Tokyo MOUs’ whitelists, Cyprus attracts foreign ship owners with its excellent tax benefits and quality fleet. Notable advantages include compliant VAT procedures, and a robust tonnage tax system. Additionally, Cyprus offers tax exemptions on dividend income and profits from foreign establishments, ideal for ship management companies seeking efficiency and reliability.

In May 2010, Cyprus introduced a tonnage tax system in line with EU guidelines. This system calculates the tonnage tax (TT) based on the net tonnage of eligible ships involved in qualifying shipping activities and uses a defined set of band rates as detailed in the appropriate legislation. Instead of taxing profits directly, this system assesses ships based on their size, offering flexibility for companies with diverse business operations under the same group.

Shipping activities are taxed according to ship size, while other operations face a fixed tax rate of 12.5%. Additionally, Cyprus provides various tax advantages to ship management companies, such as exemption from dividend income (under specific conditions), tax-free profits from foreign permanent establishments, and no withholding tax on income repatriation (including dividends, interest, and nearly all royalties).

If you would like further information regarding Yacht Registration in Cyprus, please contact: advice.cyprus@dixcart.com

Yacht Registration in Guernsey

As a member of the Red Ensign Group, Guernsey provides a reputable yacht registry, ensuring stability, tax efficiency, and regulatory compliance. Yachts registered in Guernsey benefit from competitive fees and reliable administration. Utilising a Guernsey corporate structure offers asset protection and other advantages, including access to an exclusive flag and VAT registration. Additionally, Guernsey’s international registration validity, flexible presence requirements, and VAT-free options appeal to yacht owners.

Guernsey provides competitive registration fees without tonnage tax or additional annual ship registry fees. Registrations are internationally recognised, with all documentation available in English and widely accepted.

Importantly, Guernsey-registered yachts are not obligated to visit Guernsey physically. In addition, as Guernsey lies outside the EU VAT territory, it offers advantages to non-EU resident owners who wish to operate their vessels VAT-free in Europe, under Temporary Admission (Temporary Importation) relief, provided they meet eligibility criteria.

If you would like further information regarding Yacht Registration in Guernsey, please contact: advice.guernsey@dixcart.com

Yacht Registration in Isle of Man

The Isle of Man offers advantageous VAT arrangements for commercial charter services, allowing for VAT reclamation on purchases or importations. Yachts owned by Isle of Man-registered companies enjoy zero-rated tax on charter income, along with streamlined customs procedures and tax benefits.

Even if a yacht is not registered on the island, it can still benefit from the Isle of Man’s VAT arrangements, if owned by a company registered for VAT in the Isle of Man, as long as it is used for commercial charter services. In addition, Isle of Man structures enable VAT accounting and reclamation on yacht purchases, facilitating efficient transactions.

Charter income can be subject to a zero-tax rate in the IOM. If a yacht can accommodate ten or more passengers, including crew, it may qualify as ‘passenger transport’ for VAT purposes. In the Isle of Man or the UK, supplies of ‘passenger transport’ are VAT-exempt, while in EU member states, chartering services may be subject to local VAT regulations depending on where the charter occurs.

If you would like further information regarding Yacht Registration in the Isle of Man, please contact: advice.iom@dixcart.com

Yacht Registration in Madeira (Portugal)

Madeira, as part of Portugal, offers a credible and competitive option for yacht registration through its International Shipping Register. Yachts registered in Madeira benefit from EU compliance, VAT advantages, and tax incentives, making it an attractive choice for yacht owning companies.

Madeira’s International Shipping Register (MAR) maintains EU standards and is not recognised as a flag as a convenience by organizations like the International Transport Workers’ Federation (ITF). Additionally, MAR allows full access to EU waters without restrictions for commercial or private yachts. For commercial yachts, MAR offers VAT exemptions on various expenses.

Importing a second-hand yacht into the EU, particularly under Portuguese VAT rules, offers several advantages. Firstly, VAT can be applied to a lower acquisition price based on devaluation, potentially resulting in a significant VAT reduction. For commercial yachts registered on MAR and engaged in charter activities, there are VAT exemptions on the acquisition price, repairs, fuel, provisioning goods, and equipment supply, provided there is regular commercial operation and appropriate charter agreements are in place.

In addition, operational benefits include no citizenship requirements for crew, and exemption from personal income taxes, and flexible social security arrangements for crew members.

Yacht owning companies in Madeira enjoy a favourable tax regime, which includes reduced corporate income tax rates and withholding tax exemptions. Madeira companies benefit from automatic VAT registration, exemptions from initial yacht registration fees, and reduced annual fees. Furthermore, investment routing can eliminate withholding taxes on dividends.

If you would like further information regarding Yacht Registration in Madeira, please contact: advice.portugal@dixcart.com

Yacht Registration in Malta

Over the past decade, Malta has consolidated its status as an international Mediterranean centre of maritime excellence, with the largest shipping register in Europe and the sixth largest in the world. Additionally, Malta offers favourable conditions to yachts used for both private and commercial charter and is a world leader in commercial yacht registration. Its business-friendly environment, strategic Mediterranean location, and adherence to international maritime standards contribute to its prominence.

Maltese registered commercial yachts face no trading restrictions, and there is a fast crew-acknowledgement certification process, with a maximum three-month acknowledgement period.

When a yacht is to be used for commercial chartering, a VAT deferment can be obtained, when a yacht, to be used for a commercial operation, is imported into Malta. The yacht owner is also able to recover VAT incurred on goods and services used for the chartering operation.

Similarly when a yacht is to be used for long term leasing, a VAT deferment can be obtained, with the end user, the lessee, paying VAT on the monthly lease payments over the term of the lease. Furthermore, any usage of the yacht outside EU waters is not subject to VAT.

Sales of yachts by Maltese-licensed shipping organisations incur no Malta tax, and non-Maltese residents selling shares in a yacht-owning company are exempt from capital gains tax under Malta Tax Law.

If you would like further information regarding Yacht Registration in Malta, please contact: advice.malta@dixcart.com

Conclusion and Contact Details

Selecting the right jurisdiction for yacht registration is paramount for maximizing benefits and ensuring regulatory compliance. With its expertise and global presence, Dixcart Air Marine assists clients in navigating the complexities of yacht ownership, offering tailored solutions to meet their specific needs and preferences. Whether interested in registering a yacht in; Cyprus, Guernsey, Isle of Man, Malta, or Portugal, yacht owners can rely on Dixcart’s practical experience to facilitate a smooth registration process and unlock the advantages of each jurisdiction.

If you would like further information regarding Yacht Registration, and aren’t sure what jurisdiction, please contact advice@dixcart.com for further assistance.

Ship Registration

A Guide to the Advantages of Ship Registration in: Cyprus, Guernsey, Madeira (Portugal), and Malta

Posted on | by Megan Raguro | Leave a Comment on A Guide to the Advantages of Ship Registration in: Cyprus, Guernsey, Madeira (Portugal), and Malta

Introduction

Selecting the appropriate jurisdiction for ship registration is a critical decision for ship owners, as this decision impacts on; tax liabilities, operational flexibility, and regulatory compliance.

Dixcart Air Marine, with its extensive experience and global presence, offers comprehensive services to guide clients through the ship registration process in various jurisdictions. From pre-structuring advice to ongoing administration and management, Dixcart ensures a smooth and efficient process for their clients.

Ship registration is complex and while this guide includes relevant and useful information, you will also need to speak to one of our experts: advice@dixcart.com

Ship Registration Services Provided by Dixcart Air Marine

Dixcart Air Marine offers comprehensive support for vessel importation into the EU, ensuring efficient customs clearance procedures. Our expertise extends to establishing ownership structures and facilitating registration in the preferred jurisdiction, complemented by additional services to maintain compliance.

Dixcart’s corporate structuring assistance includes; accounting, secretarial, and ongoing corporate services, including directorships and filing essential returns.

Services Available from Dixcart

  • Coordination and registration of the ship
  • Assistance with the importation of the vessel into the EU, including any necessary customs arrangements
  • Expertise on the relevant holding structure in the jurisdiction of choice
  • Advice regarding a variety of tax incentives that may be applicable, including advice on VAT and corporate tax
  • Administration and management of day-to-day operations, including accounting and secretarial services, monitoring costs, budgets and cash flow in relation to assets, and any statutory requirements
  • Additional services, such as directorships or the provision of corporate office holders
  • Assistance with crewing, including payroll and crew contracts

Choosing the Right Jurisdiction

Different jurisdictions offer unique advantages for ship registration, ranging from tax incentives to the regulatory framework. Research, planning, and professional advice are crucial in selecting the jurisdiction that best aligns with the owner’s objectives.

Dixcart provides professional advisers and clients with the necessary expertise to make informed decisions and maximise the benefits of ship registration. We offer direct experience and expertise in ship registration across the following jurisdictions, where Dixcart has offices; Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta.

Ship Registration in Cyprus- Features and Advantages

Cyprus has emerged as an attractive jurisdiction for ship registration, offering competitive advantages such as favourable tax provisions, low registration fees, and a growing shipping registry with international recognition. The Cyprus shipping registry has made significant strides in enhancing the quality of its fleet and related services.

Cyprus is now on the Paris and Tokyo MoU’s whitelist. Its benefits include VAT exemption on international transport outside the EU, income tax exemption for crew, and a competitive corporate tax rate. Cyprus offers a compliant tonnage tax system, protection for financiers, and adherence to maritime conventions. With competitive costs, Cyprus ship registration is an attractive choice in the industry.

Cyprus offers tax exemptions to international transport services, including VAT exemptions for operations outside the EU, and tax-free crew income on Cypriot vessels. Introduced in 2010, Cyprus operates under a tonnage tax system, aligned with EU standards and calculated based on net tonnage. This system replaces corporate tax, allowing mixed activities within groups.

Tax advantages also include exemptions for; dividend income, foreign profits, and withholding tax on income repatriation. Competitive registration costs further boost Cyprus’ appeal as a maritime hub.

If you would like further information regarding Ship Registration in Cyprus, please contact advice.cyprus@dixcart.com

Ship Registration in Guernsey- Features and Advantages

Guernsey’s reputable ship registry, coupled with its membership of the Red Ensign Group, ensures stability, tax efficiency, and regulatory compliance for registered ships. With streamlined administrative processes and access to a respected flag, Guernsey provides an attractive environment for ship owners looking for reliability and professionalism.

Guernsey’s rich maritime history continues with specialist services available to the marine industry. The registry accommodates vessels up to 150 gross tonnages, including pleasure yachts, with potential future tonnage increases. Commercial vessels of up to 24 meters in load line length can register, provided they comply with safety regulations. Efficient payroll solutions are also available, which comply with the Maritime Labour Convention, 2006.

If you would like further information regarding Ship Registration in Guernsey, please contact advice.guernsey@dixcart.com

Ship Registration in Madeira (Portugal)- Features and Advantages

Madeira, as part of Portugal, offers a credible option for ship registration with EU compliance, VAT advantages, and tax incentives for ship owning companies. With its competitive advantages and strategic location, Madeira provides a valuable opportunity for ship owners seeking efficiency and flexibility in their operations.

The International Shipping Register of Madeira (MAR) was established in 1989 as part of the Madeira International Business Centre (“MIBC”) “package” of taxation benefits. Vessels registered with MAR carry the Portuguese flag and are subject to the International Treaties and Conventions entered by Portugal. MAR is recognised for its high standards, EU credibility, and inclusion in the Paris MOU whitelist, ensuring reliable maritime operations.

Ship-owners registering vessels in MAR face no nationality restrictions and do not need a head office in Madeira; it is sufficient to have local legal representation with adequate powers. With just 30% of safe manning required to be “European”, flexible crew arrangements are allowed, with possible derogation if justified. Crew wages are exempt from income tax and social security charges in Portugal.

Additionally, MAR offers a flexible mortgage system, letting parties select the governing legal system for mortgage terms. Competitive registration fees, no annual tonnage taxes, and temporary registration options, such as bareboat chartering, are also available.

Shipping companies licensed in MAR enjoy a reduced 5% corporate tax rate until 2027. They also receive automatic VAT registration. Additionally, they benefit from exemptions on withholding taxes and capital gains tax under certain conditions. MAR also enables access to all Portuguese Double Taxation Treaties and Investment Protection Treaties, further enhancing tax advantages.

If you would like further information regarding Ship Registration in Madeira, please contact advice.portugal@dixcart.com

Ship Registration in Malta- Features and Advantages

Malta boasts the largest shipping register in Europe, offering a wide range of benefits for registered ships. From preferential treatment in ports to adherence to international conventions, Malta provides a comprehensive framework for ship owners seeking reliability and regulatory compliance. Additionally, Malta offers various tax incentives and exemptions, making it an attractive jurisdiction for ship registration.

The Malta registry is on the Paris MOU and Tokyo MOU whitelists, with no trading restrictions for vessels under the Maltese flag. The Maltese Shipping Tonnage Tax System provides tax dependent on tonnage, with exemptions for shipping activities. Ship management activities are now included in the tonnage tax system, exempting income derived from such activities.

Under the Malta Tonnage Tax System, taxation is determined by the size of vessels owned by a specific ship-owner or manager involved in maritime transport, following Maritime Guidelines. Unlike standard corporate tax rules, shipping operations are subject to an annual tax that includes a registration fee and annual tonnage charge, which decreases as the vessel ages. Fees depend on the vessel’s size, with younger ships receiving discounts and those aged 25-30 years incurring the highest charges.

If you would like further information regarding Ship Registration in Malta, please contact advice.malta@dixcart.com

Conclusion and Contact Details

Selecting the right jurisdiction and professional adviser, such as Dixcart, for ship registration is essential for maximising benefits and ensuring compliance with regulatory requirements.

Dixcart Air Marine, with its expertise and global presence, offers tailored solutions to meet the unique needs of ship owners. Whether attracted to; Cyprus, Guernsey, Isle of Man, Madeira (Portugal), or Malta, ship owners can rely on Dixcart to provide expert guidance and practical solutions throughout the registration process.

If you would like further information regarding Ship Registration, and aren’t sure on which jurisdiction, please contact advice@dixcart.com for assistance.

Aircraft Registration

A Guide to the Advantages of Aircraft Registration in: Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta

Posted on | by Megan Raguro | Leave a Comment on A Guide to the Advantages of Aircraft Registration in: Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta

Introduction

Dixcart Air Marine specialises in assisting clients with the registration, and ongoing management of various assets, including aircraft, ships, and yachts.

With a global network of experienced professionals, Dixcart provides tailored services to meet the unique needs of professionals and their clients.

Aircraft registration is a complex topic, and this guide aims to explore the advantages of aircraft registration in the following jurisdictions: Cyprus, Guernsey, Isle of Man, Madeira (Portugal), and Malta. For additional information, please contact us to be put in touch with an expert: advice@dixcart.com

Aircraft Registration Services Provided by Dixcart Air Marine

From assistance with importation to registration and corporate structuring, we provide expert assistance every step of the way.

With extensive experience in providing support for the importation of aircraft into the EU, Dixcart handle all preparation work and customs clearance procedures, ensuring a streamlined process.

When it comes to registration, we understand the importance of choosing the right jurisdiction based on the aircraft’s usage and location.

Dixcart can establish the appropriate ownership structure, guiding clients through the intricacies of registration with precision and efficiency. Additionally, our corporate structuring services cover accounting, secretarial tasks, VAT, and tax advice, providing professional advisers and clients with a commercial approach to managing aircraft assets.

Choosing the Right Jurisdiction

Dixcart offers expert advice in selecting the most tax-efficient ownership structure and jurisdiction for aircraft registration. With extensive experience and offices in key jurisdictions; including Cyprus, Guernsey, Isle of Man, Malta, and Portugal.

Dixcart ensures efficient coordination of the registration process. Our knowledgeable team provides insights into the regulatory frameworks, tax incentives, and operational considerations, enabling clients to make informed decisions, aligned with their objectives.

Advantages of Aircraft Registration in Cyprus

Cyprus offers a favourable regulatory environment and tax incentives for aircraft registration. With competitive fees and an efficient registration process, Cyprus is an attractive choice for aircraft owners seeking reliability and cost-effectiveness.

Additionally, Cyprus’ strategic location provides easy access to European and international markets, enhancing the aircraft’s operational flexibility.

The Private Aircraft Leasing Guidelines provide that Cyprus VAT will only be applied on a percentage of the lease consideration. The applicable percentages have been determined by the Tax Department and depend on the, length, type of aircraft, and an indication of the presumed time of use of the aircraft in EU air space. There is therefore, no need to maintain a detailed record or log books of the movements of the aircraft, for VAT purposes.

To benefit from the Cyprus Private Aircraft Leasing Guidelines, the private aircraft can be registered under any Aircraft register in the world and not necessarily under the Cyprus Aircraft Register. Certain conditions must be met, and the prior approval of the Cypriot Tax Commissioner needs to be obtained in each case.

If you would like further information regarding Aircraft Registration in Cyprus, please contact advice.cyprus@dixcart.com

Advantages of Aircraft Registration in Guernsey

Guernsey’s reputable regulatory framework and tax-efficient environment make it an ideal jurisdiction for aircraft registration. As a member of the Red Ensign Group, Guernsey adheres to high standards of safety and professionalism in aviation. With streamlined administrative procedures and access to a wide range of aviation-related services, Guernsey offers stability and efficiency for aircraft owners.

Guernsey’s Channel Islands Aircraft Registry, ‘2-REG,’ offers simplified registration with a neutral ‘2-‘ nationality mark.  Registration is available out of sequence; the 2- followed by a four-letter combination, allows for significant personalisation and branding opportunities.

2-REG accepts transfers from various registers, improving flexibility and with a secure mortgage registration system and global inspector network, it offers convenience and security.  

If you would like further information regarding Aircraft Registration in Guernsey, please contact advice.guernsey@dixcart.com

Advantages of Aircraft Registration in Isle of Man

The Isle of Man offers advantageous VAT arrangements and tax benefits for aircraft owners. With a robust regulatory framework and simplified customs procedures, the Isle of Man provides flexibility and efficiency for aircraft registration. In addition, the Isle of Man’s status as a crown dependency of the United Kingdom, ensures adherence to international standards and conventions, instilling confidence in aircraft owners and operators.

With over 1,000 registered aircraft, the Isle of Man Registry ranks as Europe’s second-largest private business jet register and sixth largest globally. It offers a neutral “M” registration prefix and upholds high regulatory standards.

Operating on a commercial yet cost-effective basis, the Isle of Man boasts; zero corporation tax, no insurance premium tax and VAT alignment with the UK. In addition, no capital gains taxes, no capital transfer tax, and no general withholding taxes are payable in the Isle of Man. A final benefit is that no insurance premium tax is payable.

If you would like further information regarding Aircraft Registration in the Isle of Man, please contact advice.iom@dixcart.com

Advantages of Aircraft Registration in Madeira (Portugal)

Madeira, as part of Portugal, provides a credible option for aircraft registration with EU compliance and tax advantages. Madeira presents a compelling option for aircraft registration, leveraging the advantages of INAC’s (the regulatory authority for civil aviation in Portugal), streamlined processes and low registration charges.

Portugal’s registry requires no nationality stipulations for owners, with a rapid 10-day registration turnaround. In addition, Portugal has pioneered fractional aircraft ownership registration and INAC officers are experienced in this field.

INAC is a secure mortgage register – due to its international reputation and safety standards it is on the banks and financial institutions whitelist of aircraft registries.

Air operators that meet certain conditions and with a valid AOC granted by INAC, are entitled to deduct the VAT on the, fuel supply, maintenance, lease, transfer, and repairs to the aircraft. They are also entitled to deduct VAT on the; acquisition, maintenance, repair, and transfer of equipment incorporated into the aircraft or used in its exploitation. This is provided that 50% of the aircraft’s flights are international.

If you would like further information regarding Aircraft Registration in Portugal, please contact advice.portugal@dixcart.com

Advantages of Aircraft Registration in Malta

Malta boasts a reputable aviation registry and extensive tax incentives for aircraft owners. With adherence to international conventions– most notably the Cape Town Convention and Protocol, Malta offers reliability and regulatory compliance for aircraft registration. Additionally, Malta’s comprehensive legal framework and experienced professionals facilitate smooth transactions for aircraft owners, minimising administrative burdens and maximising operational efficiency.

Malta’s location makes it logistically easy to provide access to European and African markets. Malta’s weather conditions also make it the prefect jurisdiction to test aircrafts and train pilots. It offers a wide spectrum of services in this sector such as; aircraft repair and overhaul, management, leasing, maintenance, and training, amongst others.

Aviation professionals can benefit from specifically designed expat tax status, and the taxation of aircraft structures in Malta offers advantageous frameworks, both for commercial and for private registrations.

The Double Tier Tax Structure allows tax free holding of funds and reinvestment of retained earnings through a Malta Holding Company and no withholding tax applies on the distribution of dividends.

In addition, Malta allows for registration of an aircraft under construction, if it is uniquely identifiable.

If you would like further information regarding Aircraft Registration in Malta, please contact advice.malta@dixcart.com

Conclusion and Dixcart Contact Details

Dixcart Air Marine offers comprehensive services to assist aircraft owners in selecting the optimal jurisdiction for registration dependant on their circumstances. Whether in Cyprus, Guernsey, Isle of Man, Malta, or Madeira (Portugal), Dixcart ensures efficient coordination of the registration process, and optimises the benefits available in the circumstances.

With expert guidance and practical solutions, Dixcart helps aircraft owners achieve their objectives efficiently and effectively in an ever-evolving global aviation landscape.

If you would like further information regarding Aircraft Registration, and aren’t sure on a specific jurisdiction, please contact advice@dixart.com for further assistance.

Madeira International Shipping Register

The Advantages of Registering a Vessel with the Madeira International Shipping Register (MAR)

Posted on | by Karolis Surkus | Leave a Comment on The Advantages of Registering a Vessel with the Madeira International Shipping Register (MAR)

Background

The objective of the Madeira International Shipping Register (MAR) is to offer a credible alternative to other international registers. The high quality and safety standards of a conventional register have been maintained within an attractive tax environment designed to encourage inward investment to the island of Madeira. Vessels registered with MAR carry the Portuguese flag and are subject to the International Treaties and Conventions entered into by Portugal.

Over half a million vessels are now registered with MAR and it is ranked the fourth international shipping register in the EU. Four of the largest ship-owners in the world, APM-Maersk, the Mediterranean Shipping Company (MSC), CMA CGM Group and Cosco Shipping, have ships registered with MAR, as recorded by the international analyst firm, Alphaliner.

Key Developments in 2017

In 2017 a number of significant developments took place, increasing the attractiveness of registering a vessel in MAR:

  • The Madeira Shipping Register was “White Listed” on both the Paris MOU and the Tokyo MOU.*
  • Vessels under the Portuguese flag are included in the Qualship 21 Index of the United States of America. This certificate recognises the exceptional standards of the Register.
  • The Korean Register (KR), a member of the International Association of Classification Societies (IACS), was granted authorisation by the Portugal Maritime Authority (DGRM) to deliver statutory services on behalf of the Portuguese flag. This authorisation enables the Korean Register to act as a Recognised Organisation (RO), conducting surveys and audits, and issuing certificates to Portuguese flagged ships, including those in Madeira, to ensure full compliance with SOLAS, MARPOL, ITC, ILL and MLC regulations.

*MOU: Paris Memorandum of Understanding on Port State Control (MoU) and Tokyo (MoU).

Advantages of Registering a Vessel with MAR

The key advantages of ship registration in MAR are detailed below:

  • Shipping companies licenced to operate within MAR benefit from a corporate income tax rate of 5% until 2027. They also enjoy automatic VAT registration and have access to the Portuguese double taxation treaty network.        
  • The Register is of a high standard, has EU credibility and full access to EU cabotage.
  • It is not regarded by the International Transport Workers’ Federation as a flag of convenience.
  • There are no nationality requirements for ship owners of vessels registered in MAR and they are not required to have their head office in Madeira; it is sufficient to have local legal representation with adequate powers. Dixcart in Madeira can provide this service.
  • The existence of a flexible mortgage system allows the mortgagor and the mortgagee, by written agreement, to choose the legal system of a particular country that will govern the terms of the mortgage.
  • Registration fees are competitive and there are no annual tonnage taxes.
  • Generally, the captain and 50% of the crew of the ship must be “European”. This includes nationalities such as Polish, Russian and Ukrainian, as well as citizens of Portuguese-speaking countries, which allows for flexible manning.
  • Crew wages are exempt from income tax and social security charges in Portugal.
  • Temporary registration is allowed by law (bareboat charter: “In” and “Out”).
  • Eight International Classification Societies are recognised in Portugal. MAR can delegate some of its functions to these societies. This can be simpler and more convenient for ship owners.

Additional Tax Advantages for Shipping Companies in Madeira

In addition, to the reduced corporate tax rates, Madeira shipping companies also enjoy exemption from withholding taxes on the distribution of dividends, exemption from withholding taxes on interest, royalties and service fees paid to non-residents, and exemption from capital duty, notary and registration fees. If certain requirements are met, shipping companies may also be exempt from capital gains tax when subsidiaries are sold.

Shipping companies can benefit from the Double Taxation Treaties with Portugal and Investment Protection Treaties signed by Portugal.

Summary

The approach adopted by MAR allows for flexibility. Depending on the circumstances, the ship can be registered on MAR with the shipping company licensed in another jurisdiction, OR the shipping company can be registered in Madeira with the vessel registered elsewhere, OR both the vessel and the shipping company can be licensed in Madeira. Each of these options offer various advantages.

How Can Dixcart Help?

Dixcart has extensive experience working with the owners and operators of commercial vessels as well as pleasure and commercial yachts. We can assist with the permanent and/or bareboat registration of vessels, re-flagging, mortgages, and the establishment of corporate owning or operational structures for the holding or management of vessels.

Additional Information

If you require additional information regarding the International Shipping Register of Madeira and the tax efficiencies available to ships owned by Portuguese companies registered in MAR, please contact Catarina Sardinha at the Dixcart office in Madeira: advice.portugal@dixcart.com  

The Benefits of Ship or Yacht Registration in Portugal, with the International Shipping Register of Madeira (MAR)

Posted on | by Akiko Design | Leave a Comment on The Benefits of Ship or Yacht Registration in Portugal, with the International Shipping Register of Madeira (MAR)

Ship or Yacht Registration in Portugal

The International Shipping Register of Madeira (MAR) was established in 1989 as part of the Madeira International Business Centre (“MIBC”) “package” of taxation benefits. Portugal is an attractive jurisdiction for ship or yacht registration, with over half a million vessels are now registered with MAR. It is also ranked the fourth international shipping register in the EU. If you are in the process of deciding where to register your vessel, Portugal should be considered.

Vessels registered with MAR carry the Portuguese flag and are subject to the International Treaties and Conventions entered into by Portugal. The register is of a high standard, has EU credibility, is not regarded as a flag of convenience, and is whitelisted in both Paris MoU and Med MoU. Moreover, it has never been regarded by the ITF as a flag of convenience.

It is important to note that the Portuguese Government is determined to boost the maritime economy, taking concrete steps to put MAR among the leading European flags. In this context we must point out that MAR is one of the first flags to fully introduce an efficient digital system, allowing for the dematerialisation of all procedures and the issuing of electronic certificates following the IMO Guidelines for the use of electronic certificates.

In the words of MAR’s Technical Commission, “Portugal considers digitalization in the maritime transport as a very relevant development, namely in respect to expediting sharing of information, improving security and traceability of documentation and reducing administrative burdens.”

It is therefore clear that MAR is offering the best quality package to owners worldwide, as any individual or entity can register a vessel with MAR. There are no nationality requirements for ship-owners of vessels registered in MAR and they are not required to have their head office in Madeira. In addition, if the entity is registered with the International Business Centre of Madeira (MIBC), and undertakes maritime transportation, it can enjoy specific tax incentives provided by the MIBC.

Advantages of Ship or Yacht Registration in Portugal

Yacht Registration with MAR:
  • EU register – yacht registration in MAR provides unrestricted access to EU waters.
  • Yacht owners are not required to have their head office in Madeira (it is sufficient to have local legal representation with adequate powers).
  • Low levels of taxation.
  • The yacht does not have to sail or be moored in Madeira.
  • No citizenship requirements for the crew of commercial yachts and a flexible social security regime.
  • The existence of a flexible mortgage system which allows the mortgagor and the mortgagee, by written agreement, to choose the legal system of a particular country that will govern the terms of the mortgage.   
  • Reduced costs of registration.

Advantages of Ship Registration in MAR:

  • EU Flag – the register is of a high standard and has complete EU credibility, with access to continental and island cabotage.
  • The register is included in the Paris MoU Whitelist.
  • Competitive registration fees, there are no annual tonnage taxes.   
  • Only 30% of the safe manning must be “European”. This includes nationalities such as Polish, Russian, and Ukrainian, as well as citizens of Portuguese-speaking countries. This requirement may also be derogated if duly justified. This allows for flexible manning.
  • Crew wages are exempt from income tax and from social security charges in Portugal.
  • If an MIBC company is formed, with the object being maritime transportation, there is no share capital requirements.
  • Shipping companies licensed to operate within MAR benefit from a corporate income tax rate of 5% until 2027. They also enjoy:
    • automatic VAT registration,
    • access to the Portuguese double taxation treaty network,
    • exemption from withholding taxes on the distribution of dividends,
    • exemption from withholding taxes on interest, royalties and service fees paid to non-residents,
    • and exemption from capital duty, notary, and registration fees.
    • If certain requirements are met, shipping companies may also be exempt from capital gains tax when subsidiaries are sold.
  • The existence of a flexible mortgage system which allows the mortgagor and the mortgagee, by written agreement, to choose the legal system of a particular country that will govern the terms of the mortgage.   
  • Eight International Classification Societies are recognised in Portugal. MAR can delegate some of its functions to these societies. This can be simpler and more convenient for ship owners.          
  • Temporary registration is allowed by law (bareboat charter: “In” and “Out”).
  • Vessels under the Portuguese flag are included in the Qualship 21 Index of the United States of America. This certificate recognises the exceptional standards of the Register.

Summary

If you are interested in finding out more about Ship or Yacht Registration in Portugal and would like to take advantages of the benefits listed within this article, please contact: advice.portugal@dixcart.com, or your usual Dixcart contact. 

Portuguese Tonnage Tax

The Portuguese Tonnage Tax and All The Benefits it Offers

Posted on | by Karolis Surkus | Leave a Comment on The Portuguese Tonnage Tax and All The Benefits it Offers

The Portuguese tonnage tax and seafarer scheme was approved by the European Commission on 6 April 2018. This was in line with EU State aid rules, in particular the Guidelines on State aid to maritime transport. The Portuguese measures will enhance the competitiveness of the Portuguese shipping sector. Simultaneously, they will protect know-how and jobs in the EU maritime transport sector.

The law proposal had been presented by the Portuguese Government to Parliament before this date, and enactment is anticipated in the near future.

Portuguese Tonnage Tax System: Eligibility

The tonnage tax is not a tax but rather a means to determine relevant taxable income.

Entities liable to corporate income tax, carrying out eligible shipping activities, with a registered head office or place of effective management in Portugal, may opt to be taxed under this new tonnage scheme.

Application to the tonnage scheme will be subject to certain legal requirements as follows:

  • at least 60% of the respective net tonnage must fly a flag of a European Member State (EU) or an Economic European Area State (EEA) and be managed from an EU or EEA State;
  • in terms of chartering, the net tonnage of the ships under a charter cannot exceed 75% of the total fleet of the charterer and must comply with the flag and management requirements detailed above;
  • at least 50% of the crew of the relevant ships must be nationals from EU, EEA or Portuguese-speaking countries, except for very limited exceptional cases.

Tax Details: Portuguese Tonnage Tax Regime

Taxable income is calculated as a lump sum, depending on the size (net tonnage) of the ships, independent of the actual earnings (profit or loss), as per the schedule below:

Net TonnageDaily taxable income for each 100 net tonnes
Up to 1,000 net tonnes€ 0.75
1,001 – 10,000 net tonnes€ 0.60
10,001 – 25,000 net tonnes€ 0.40
Over 25,001 net tonnes€ 0.20

The tonnage tax can be applied to a shipping company’s:

  • core revenue from maritime transport activities, such as cargo and passenger transport;
  • certain ancillary revenue closely connected to shipping activities (which is capped at a maximum 50% of a ship’s operating revenue); and
  • revenue from towage and dredging, subject to certain conditions.

For more environmentally-friendly ships, companies can achieve an additional reduction of 10% to 20% of tax under the tonnage tax scheme.

Taxable profit assessed, as per the above schedule, is then subject to the standard rate of 21% corporate income tax (municipal surtax and state surtax also apply). No deductions can be offset against the taxable profit assessed under this scheme.

The proposed tonnage tax regime will be optional. However, participation in the scheme must be for a minimum 3 years, if commenced within the first 3 fiscal years of the introduction of the tonnage regime. After this initial period, subsequent participation must be for a minimum 5 years.

Scheme to Support Crew

The scheme exempts crew members employed on vessels eligible under the tonnage tax regime from paying personal income tax (IRS). A minimum of 90 days on board the vessel is required in each tax year, as well as meeting a number of other conditions.

The new scheme also allows the crew to pay reduced social security contributions; total rate of 6%, 4.1% paid by the employer and 1.9% by the member of the crew.

MAR – Madeira International Shipping Register

MAR is the fourth largest EU international shipping register. Ships registered with MAR qualify for the tonnage scheme. Madeira is an integral part of Portugal. In other words, Companies registered there enjoy a number of tax benefits which are guaranteed until at least the end of 2027.

MAR also permits bareboat charter registration. Therefore, MAR is very likely to be the preferred option for ship owners wishing to reflag their fleet in order to benefit from this new tonnage system.

In addition, the Madeira International Business Centre, of which MAR is a part, also offers several tax advantages to shipping companies, which can be combined with the benefits of this new scheme.

Additional Information

If you require additional information on this topic, please speak to your usual Dixcart contact, or to Catarina Sardinha at the Dixcart office in Madeira: advice.portugal@dixcart.com

Shipping

Shipping Advantages in Cyprus, Madeira (Portugal) and Malta

Posted on | by Karolis Surkus | Leave a Comment on Shipping Advantages in Cyprus, Madeira (Portugal) and Malta

Dixcart can provide clients with a number of alternative ship registration solutions. This note provides a brief overview of the regimes in Cyprus, the Isle of Man, Madeira (Portugal) and Malta and the shipping advantages they offer. More detailed information is available on request regarding shipping in each of the jurisdictions considered in this Information Note.

Shipping Advantages by Jurisdiction:

Cyprus

Cyprus is a major ship management centre attracting foreign ship owners through the highly favourable tax provisions available for shipping companies on the island. It is recognised as one of the most accessible registries in the EU.

The Cyprus shipping registry has not only grown in size in the last two decades but has also made a considerable effort to increase the quality of its fleet and related services. As a result the Cyprus flag is now classified on the white list of the Paris and Tokyo MOUs*.

Key shipping advantages relating to the shipping sector in Cyprus include:

  • A competitive tax regime for shipping companies, with an EU approved Tonnage Tax System (TTS) that is based on the net tonnage of the vessel rather than the corporation tax on the actual profit. This allows for mixed activities within a group, shipping activities are subject to TT and other activities are subject to 12.5% corporation tax.
  • Competitive operating costs, ship registration costs and fees.
  • The income of officers and crew on Cypriot registered vessels is not subject to income tax.
  • There are no nationality restrictions for officers or crew.
  • Cyprus also offers a series of tax advantages which are applicable to ship and ship management companies: exemption from tax of dividend income (subject to limited conditions), exemption from tax on profits from foreign permanent establishments, and exemption from withholding tax on the repatriation of income (dividends, interest and nearly all royalties).
  • More than 60 Double Tax Treaties.
  • No estate duty on the inheritance of shares in a Cyprus shipping company and no stamp duty is payable on ship mortgage deeds.

Madeira (Portugal) Shipping Advantages

The International Shipping Register of Madeira (MAR) was established in 1989 as part of the Madeira International Business Centre (“MIBC”) “package” of taxation benefits. Vessels registered with MAR carry the Portuguese flag and are subject to the International Treaties and Conventions entered into by Portugal.

The key shipping advantages of ship registration in MAR are detailed below:

  • The register is of a high standard, has EU credibility, is not regarded as a flag of convenience and is included in the Paris MOU white list.          
  • There are no nationality requirements for ship-owners of vessels registered in MAR. They are not required to have their head office in Madeira. It is sufficient to have local legal representation with adequate powers.      
  • Only 30% of the safe manning must be “European”. This includes nationalities such as Polish, Russian and Ukrainian, as well as citizens of Portuguese-speaking countries. This requirement may also be derogated if duly justified. This allows for flexible manning.
  • Crew wages are exempt from income tax and from social security charges in Portugal.        
  • The existence of a flexible mortgage system allows the mortgagor and the mortgagee, by written agreement, to choose the legal system of a particular country that will govern the terms of the mortgage.   
  • Competitive registration fees, there are no annual tonnage taxes.   
  • Eight International Classification Societies are recognised in Portugal. MAR can delegate some of its functions to these societies. This can be simpler and more convenient for ship owners.          
  • Temporary registration is allowed by law (bareboat charter: “In” and “Out”).        
  • Shipping companies licensed to operate within MAR benefit from a corporate income tax rate of 5% until 2027. They also enjoy automatic VAT registration and have access to the Portuguese double taxation treaty network.

Malta Shipping Advantages

Malta provides a reputable flag and ensures compliance with international and European standards. Registration of vessels under the Maltese flag take place in two stages. A vessel is provisionally registered for a six month period. During this provisional registration period, the owner is required to submit additional documentation and the vessel is then permanently registered under the Maltese flag.

There are a number of attractive tax reasons and shipping advantages to consider ship registration in Malta:

•       The standard corporate tax rules do not apply to shipping activities in Malta, due to a specific exemption. No tax on profits from shipping activities is therefore due. Following recent amendments this exemption has also been extended to ship management companies.          

•       Shipping operations are subject to an annual tax comprising an annual registration fee and a tonnage tax based on the net tonnage of the vessel. The rates of tonnage tax are reduced according to the age of the vessel.

•       There is an exemption from stamp duty in Malta on the registration or sale of a ship, shares relating to a licensed shipping organisation and the registration of a mortgage relating to a ship.

•       Individuals not resident in Malta who are officers or employees of a licensed shipping organisation, and the organisation that they work for, are exempt from social security contributions.     

Dixcart Shipping Services and Additional Information

Dixcart can assist in all aspects of registering a ship in Cyprus, the Isle of Man, Madeira and Malta.  

Services include the incorporation of the owner entity, coordinating the appropriate corporate and tax compliance, and registration of the vessel.

If you would like additional information on this topic, please speak to your usual Dixcart contact or to:

*White List Paris and Tokyo MOUs: Flags securing the highest rating in relation to the Memorandum of Understandings on Port State Control.

Dixcart Management (IOM) Limited is licensed by the Isle of Man Financial Services Authority

Why Use The Azores

Why Use The Azores (Portugal) for Yacht Importation?

Posted on | by Karolis Surkus | Leave a Comment on Why Use The Azores (Portugal) for Yacht Importation?

Background

The Archipelago of the Azores is composed of nine volcanic islands and is situated in the North Atlantic, about 1,500 kilometres west of Lisbon. These islands are an autonomous region of Portugal.

What Advantages are Offered by the Azores for Yacht Importation into the EU?

  • The standard rate of Portuguese VAT is 23% but the Azores benefits from a reduced VAT rate of 18%.

In relation to the EU as a whole, the Azores has the second lowest rate of VAT within the EU (equal to Malta), with only Luxembourg enjoying a lower rate at 17%.  The low rate of VAT is a major reason why the Azores continues to be a popular location for yacht importation into the EU.

The Azores also provides a geographical advantage as it is on the route used by yachts crossing the Atlantic, from the US and the Caribbean, to Europe.

Dixcart: Yacht Importation Services Using the Azores

Dixcart has extensive experience importing yachts through the Azores.

The yacht must physically travel to the Azores and it must  be moored there for two to three working days, to enable customs clearance to take place.

Dixcart undertakes the preparation work at their office in Madeira and then organises for the appropriate professionals to travel to the Azores, to be there at the correct time and for the relevant number of days. These professionals assist with the customs clearance procedures and payment of VAT.

Steps and Procedures

Four steps take place:

Step 1: Application for a VAT number for the yacht owning company, as a Portuguese taxpayer

Requirements:

  1. Relevant documents to prove the yacht owner’s identity.
  2. Power of Attorney from the yacht owner in favour of the relevant Dixcart company. This company will apply for a VAT number and will be registered as the yacht owner’s fiscal representative, for VAT purposes, with the Portuguese Tax Authorities.

Step 2: Preparation of the relevant VAT and other customs forms

Requirements:

  1. ‘Declaration of Conformity’.
  2. ‘Bill of Sale’ and related invoices.
  3. Customs in the Azores will make their own evaluation as to the value of the yacht.

Step 3: Importation

The Azores Customs Authority will:

  1. Survey the yacht.
  2. Calculate the applicable VAT on importation, and any other relevant charges.
  3. Implement the customs clearance.

Step 4: VAT payment

The Portuguese tax representative of the yacht owner (provided by Dixcart) will pay the VAT applicable on the yacht importation and will receive the following items:

  1. ‘Declaration of Importation’. This document confirms customs clearance for the yacht and details of the relevant VAT payment. It must be kept on board the yacht at all times.
  2. Receipt of payment.

Additional Information

If you require additional information regarding yacht importation using the Azores, please speak to your usual Dixcart contact or to Catarina Sardinha at the Dixcart office in Madeira: advice.portugal@dixcart.com.

Portugal Armed Guards

Portugal Armed Guards Allowed Onboard Portuguese Flagged Vessels, Where Piracy is Prevalent

Posted on | by Karolis Surkus | Leave a Comment on Portugal Armed Guards Allowed Onboard Portuguese Flagged Vessels, Where Piracy is Prevalent

New Law

On 10 January 2019, the Portuguese Council of Ministers approved a law to allow armed guards to sail on Portuguese flagged vessels.

This measure is long-awaited by the International Shipping Registry of Madeira (MAR) and by ship owners registered within it. The increase in financial loss due to hijackings and ransom demands, and the risk to human lives, as a result of hostage taking has led shipowners to demand such a of measure. Ship owners prefer to pay for additional protection rather than being potential victims of piracy.

Measures to Address the Increasingly Frequent Problem of Piracy

Unfortunately, piracy now constitutes a major threat to the shipping industry and it is recognised that the use of armed guards on board vessels is crucial to the decrease the number of piracy incidents.

The regime to be established by this law enables shipowners of Portuguese flagged vessels to hire private security companies, employing armed personnel to be on board ships, in order to protect these vessels when operating in areas of high piracy risk. The law also provides for the option to hire security contractors headquartered within the EU or EEA to protect Portuguese vessels.

Portugal will be joining the increasing number of ‘Flag States’ that allow the use of armed guards on board. This step is therefore logical and consistent with the actions being taken by a number of other countries.

Portugal and Shipping

As recently as November 2018 the Portuguese tonnage tax and seafarer scheme was enacted. The objective is to encourage new shipping companies by offering tax advantages, not only to shipowners, but also to seafarers. For more information regarding the advantages of the new Portuguese tonnage tax, please refer to the Dixcart Article: IN538 The Portuguese Tonnage Tax Scheme For Ships – What Benefits Will It Offer?.

The Madeira Shipping Registry (MAR): Other Advantages

This new law is designed to enhance Portugal’s shipping registry and Portugal’s second shipping register, the Madeira Registry (MAR). It is part of a comprehensive plan to develop the country’s entire maritime industry. This includes companies and individuals owning ships, shipping related infrastructure, maritime suppliers and those working in the maritime industry.

The Madeira Registry is already the fourth largest international shipping register within the EU. Its registered gross tonnage is over 15.5 million and its fleet comprises vessels from the largest shipowners such as APM-Maersk, MSC  (Mediterranean Shipping Company), CMA, CGM Group and Cosco Shipping. Please see: IN518 Why the International Shipping Register of Madeira (MAR) is so Attractive.

How Can Dixcart Help?

Dixcart has extensive experience working with the owners and operators of commercial vessels as well as pleasure and commercial yachts, registered with the Portuguese Registry and/or MAR. We can assist with the permanent and/or bareboat registration of vessels, re-flagging, mortgages and the establishment of corporate owning and/or operational structures for the holding or management of vessels.

Additional Information

If you require additional information on this topic, please speak to your usual Dixcart contact, or to Catarina Sardinha at the Dixcart office in Madeira:

advice.portugal@dixcart.com.