By Tony Laguette, Associate Director, Business Development, IQ-EQ, and Nicolas Richard, Managing Partner, Juristconsult Chambers
Mauritius has long been known as a maritime hub used by former colonial powers on their route to the Indian peninsula, with Port Louis serving as one the main ports in the Indian Ocean. Fast forward to today, the Exclusive Economic Zone (EEZ) of Mauritius is one of the largest in the world and attracts ships exploiting the resources present in the waters of the island nation and its dependencies. However, surprisingly, shipping registration in Mauritius hasn’t yet gained momentum.
With 2.2 million square kilometres of EEZ extending 200 nautical miles from the country’s coast, Mauritius has significant potential to develop its blue economy and the registration of vessels could be a key element to this strategy. This article will explore the opportunities that the jurisdiction has to offer compared to other traditional ship registration hubs, as well as the legal framework in place to attract ship owners to the Mauritius International Financial Centre (IFC).
Advantages of using Mauritius for shipping registration
Mauritius is an integral member of the International Maritime Organisation (IMO) and has ratified most of the international conventions on maritime safety, pollution prevention and training and certification of seafarers. Not only does the country benefit from a favourable central time zone, but it also has a solid infrastructure and a good communications system, making it an ideal location for registering vessels.
The country is considered as a safe stopover between Asia, Southern Africa and South America for bunkering, maintenance and other services. Through its stable social, political and economic model, Mauritius benefits from an undisputable good reputation with international organisations and regulators. Historically Mauritius has always kept its neutrality regarding global conflicts, thus strengthening its flag in relation to other countries.
Mauritius boasts a favourable tax regime that not only benefits international ship owners but also offers advantages to seafarers. As registered owners of foreign vessels are exempted on income derived from their operations, seafarers working on vessels registered in Mauritius are also exempted from income tax, there are no restrictions on the nationality of the crew and work permits are not required. Moreover, no capital gains tax is payable upon the sale or transfer of a ship or of the shares in a shipping company. There will be no withholding tax on dividends paid to shareholders of a company registered in Mauritius as well as no estate duty payable on the inheritance of shares.
A robust legal framework consisting of the Merchant Shipping Act 2007 and accompanying regulations such as the Merchant Shipping (Registration of Ships) Regulations 2009 and the Merchant Shipping (Fees) Regulations 2009 ensure that Mauritius can compete with jurisdictions such as Panama, Liberia or the Marshall Islands, which are well recognised as for shipping registration.
From Mauritius, ship owners have the possibility of sourcing not only financing through financial institutions but also marine insurance.
Requirements for the registration of vessels
To compete with experienced jurisdictions in shipping registration, stakeholders within the Mauritius IFC must adopt a flexible approach to streamline the registration process.
The law allows for the permanent, provisional and parallel registration of vessels. Vessels of different types are eligible for registration in Mauritius including barges, lighters, dredgers, mobile dredging units, high speed crafts or air-cushion vehicles however propelled, intended for use in navigation.
Registering a ship in Mauritius requires the establishment of a Global Business Licence (GBL) company and completion of the registration process with the Ministry of Blue Economy, Marine Resources, Fisheries and Shipping.
Requirements for ownership of a Mauritius registered ship
A person is qualified to be the owner of a Mauritius registered ship where they are:
- A citizen of Mauritius
- A body corporate incorporated in Mauritius with director meetings regularly held in Mauritius
- A maritime entity including a foreign maritime entity, partnership, société, association or other body of persons classed as a business entity, or
- Where the holders of the majority interest in the ship are not resident in Mauritius but are represented by an individual or body corporate that is resident in Mauritius in relation to the ship and who may be the managing owner of that ship so nominated for that purpose. For this purpose, “majority interest” means where the person or persons hold legal title to 51 or more of the shares of the ship.
The representative may either be an individual residing in Mauritius or a body corporate incorporated under the laws of Mauritius.
Registration of vessels
A ship is first registered provisionally under the Mauritius flag. The provisional registration is valid for up to three months and may be subject to extension upon justification provided. During this period all documentation needs to be finalised and duly submitted to the Registrar of Ships (“Registrar”). Once all the required documents have been examined and found in order, the ship will be permanently registered.
The ship must satisfy the following requirements:
- Age: At the time of first registration, it must not be more than 15 years old from completion of first construction. The Registrar may, on such conditions as they think fit, accept a ship of more than 15 years of age
- Size: A ship needs to be not less than 24 metres in length (other than a fishing vessel) to be eligible for registration
- Class: Every vessel of 500 gross tonnes or more seeking registration must maintain class with a recognised classification society
- International conventions: Every ship seeking registration must have valid certificates evidencing compliance with the International Maritime Conventions to which Mauritius is a party.
Mauritius permits parallel registration in Mauritius of a vessel that is already registered on a foreign register. The Mauritius register also allows for ships that are still at a construction stage to take the Mauritius flag.
How can DLA Piper and IQ-EQ can help in Mauritius
Juristconsult Chambers, part of DLA Piper Africa, can assist with the registration process of a vessel, right from the establishment of the GBL company up to the permanent registration of the vessel with the Ministry of Blue Economy, Marine Resources, Fisheries and Shipping. For many years, the firm has acted on behalf of domestic and international ship owners for matters relating to the financing, purchasing, importing, registration and chartering of vessels. It also regularly acts for P&I clubs and bunker suppliers.
IQ-EQ can assist with the onboarding and review of documentation required for ship registration, the licencing and administration of structures to hold the registration of the ship, compliance with the licencing requirements, and accounting reports.
For more information, please get in touch.
About the authors
Tony Laguette is Associate Director for Business Development at IQ-EQ in Mauritius. With nearly 20 years’ experience in the industry, he has specialist expertise in financial data analysis, market research, banking, relationship management, and business development and sales.
Nicolas Richard has been the Managing Partner of Juristconsult Chambers since 2015. Before that, he was an associate/director of the Mauritius office of Conyers Dill & Pearman and was the founder of one of the first law firms to be registered in Mauritius. Nicolas specialises in shipping and aircraft and has been involved in a number of important projects including the financing and construction of the island’s largest dockyard, the launch of Mauritius’ first private airline and several cross-border financing transactions using Mauritius special purpose vehicles (SPVs).
