Liberia: offshore business sectors

Liberian corporations, limited partnerships, registered business companies, foundations and LLCs are free of taxation if non-resident, i.e. not beneficially owned by a resident of Liberia, or with income earned in Liberia or repatriated to Liberia, and are used for a variety of purposes from holding entities, through property and portfolio owning to trading corporations quoted on the World's major stock exchanges. Of these entities a foundation cannot trade but is particularly useful for holding together a complex structure of other entities for long term development. Liberian corporations are particularly favoured for the ownership of vessels, whether or not registered in the Liberian Registry.

Liberia Maritime Registry

57 years ago Liberia's maritime program opened its doors to the world's shipping community, and within 3 months the 29,000dwt tanker World Peace, a large vessel by the standards of her day, had become the first ocean going merchant vessel to fly Liberia's star and stripes.

Now the Liberian registry is the second largest registry in the world: in 2004 came news that the total number of ships in the registry had passed 2,000. By 2008, the Liberian-flagged fleet consisted of 2,600 vessels of more than 80 million gross tons. Liberia's fleet is made up of nearly every type of ship, with large concentrations of oil, chemical and gas tankers, followed closely by both dry bulk carriers and containerships. The Registry clearly has experience with special purpose vessels and large passenger ships.

Owners come from more than 50 countries, with Germany, Greece, Japan, Russia, Taiwan, the UK and the USA figuring prominently.

The success of the Liberian registry is due to the high standards set and maintained over a long period of time. The registry has a reputation for quality, efficiency, safety, and service. Liberia also offers one of the most convenient, efficient, and tax effective offshore corporate registries in the world. The registry is operated by LISCR, LLC (The Liberian International Shipping and Corporate Registry) , which has offices in the USA (Vienna, Virginia, and New York), Piraeus, Hamburg, Hong Kong, London, Monrovia, Zurich and Tokyo. LISCR has made significant investments in new computer and communication technologies in order to meet the demands of today's shipping industry.

A recently-opened office in Hamburg testifies to Germany's maritime importance. It has been estimated that sixty per cent of all international ship finance originates in the German market. The Liberian Registry has over 54 clients, 400 ships and 10 million gross tons controlled from Germany alone.

Liberia has active governmental representatives at the IMO who are permanently stationed in London to provide full time flag state voice on the issues effecting safety and environmental protection on the IMO agenda. Professional staff from LISCR Vienna, New York and London offices participate to augment the official delegation in the numerous working groups, sub-committees and committee meetings.

Liberia is signatory to the major international maritime conventions and works with the class societies to ensure full and fair compliance and enforcement of the international rules and codes. As a consequence of the close cooperation between the Registry's technical staff and the class societies, Liberia has implemented consistent interpretations of international rules and regulations to facilitate clear and unambiguous technical information for use in new vessel construction by major shipyards around the world and to ensure continued compliance and safe operation of existing vessels under the Liberian flag.

Such examples of this include Marpol Annex VI and the International Ship and Port Security (ISPS) Code. Liberia was the first major registry to ratify the air pollution prevention code, known as Marpol Annex VI. With respect to the ISPS Code, Liberia worked closely with shipping and security experts in late 2001 to develop an effective model security plan. This plan was later delivered to the IMO for consideration and adoption. Likewise, Liberia also pioneered the world's first seafarers' biometric identification document. Liberia's design was ultimately adopted in principle at the International Labour Organization.

In April, 2006, the Liberian Registry was admitted to the United States Coast Guard’s Qualship 21 quality incentive program, which covers only about 10% of foreign-flagged ships calling at US ports.

A Liberian Registry statement says: “This recognition of Liberia’s commitment to quality shipping comes at a time of growth and expansion for the registry, which has grown by more than 500 vessels under the management of the US-based Liberian International Ship & Corporate Registry (LISCR).”

The US Coast Guard said: “Liberia’s commitment to quality shipping was evident as Liberian-flag vessels calling on US ports compiled an excellent 2005 port state control record. As a result, the three-year detention percentage for Liberian vessels fell to 0.94 per cent, which is below the cut-off for inclusion in the Qualship 2 programme".

Scott Bergeron, Chief Operating Officer of LISCR, said: “We are delighted to have been included in the Qualship programme, because this provides further confirmation of Liberia’s pre-eminent position in terms of safety and quality-driven shipping. Further recognition of this commitment to safe and secure shipping, coupled with the growth in the size of the fleet, is good for the ever-increasing numbers of shipowners who operate their ships under the Liberian flag, and for international shipping generally. Any register can grow in size, but to do so while maintaining the highest standards of safety is more difficult, and must be the aim of any responsible ship registry.”

Benefits of the Qualship 21 program include reductions in port state control examinations and streamlined inspection procedures.

Liberia The Registration Process

The Liberian Registry is open to any ship owner in the world. In order to enter the Liberian registry a vessel must be owned by a Liberian legal entity (corporation, etc.), be less than 20 years of age and must meet high safety standards.

The Republic of Liberia recognizes the following classification societies for conducting surveys and issuing statutory certificates of behalf of Liberia:

American Bureau of Shipping (ABS)
Bureau Veritas (BV)
China Classification Society (CCS)
Det Norske Veritas (DNV)
Germanischer Lloyd (GL)
Korean Register of Shipping (KRS)
Lloyd's Register of Shipping (LR)
Nippon Kaiji Kyokai (NK)
Registro Italiano Navale (RINA)
Russian Maritime Register of Shipping

All of the above listed class societies are full members of International Association of Classification Societies (IACS). The Office of the Deputy Commissioner of Maritime Affairs maintains continuous contact with these recognized class societies.

The Application for Registration is a two-sided single page document. The registration process begins with the submission of this application with the following supporting documents:

Proof of Ownership: Demonstrated by the Bill of Sale transferring title to the present owner, or for a new building a Builder's Certificate or Master Carpenter's Certificate.
Authority of Agent or Officer: This document is usually submitted in the form of a Power of Attorney, or Secretary's Certificate of Corporate Resolutions, authorizing one or more named persons to act for or on behalf of the owner in making application for registration of the vessel and to perform all acts necessary to accomplish the registration.
Oath of Owner: If the vessel owner is not an incorporated company, it should also submit an oath of a Managing Owner or Part Owner (or Agent of Owner, Managing Owner or Part Owner).
Confirmation of Class: A Certificate of Confirmation of Class for an existing vessel, or a Certificate of Seaworthiness, or an Interim Certificate of Class for a newbuilding, dated not more than ten (10) days prior to registration, must be submitted at time of registration.
Statement or Affidavit: This Statement or Affidavit needs to be submitted in addition to the confirmation of class and is given by the Classification Society with which the vessel is classed at the date of registry. Such statement must indicate:
(a) all conditions of classification, outstanding classification recommendations and/or outstanding deficiencies;
(b) the relevant statutory certificates, which the Society is prepared to issue on behalf of the Administration when all statutory surveys have been satisfactorily carried out;
(c) the current status of all classification and relevant statutory surveys setting forth the dates of completion of each; and
(d) to the extent known by the Society, any reasons why the vessel is presently not fit to proceed to sea prior to the completion of outstandings as noted above.

Vessels that are 15 years of age or older must also submit copies of the reports of the most recent surveys. Vessels older than 20 years may be granted a waiver for registration on application by the owner accompanied by an advice from the vessel's Classification Society confirming that the vessel is in class and that the Society is willing to issue all statutory certificates to the vessel.

A vessel registered in the Republic of Liberia may only be owned or bareboat registered by one of the following:

a corporation formed under the Business Corporation Act;
a company formed under the Registered Business Company Act;
a limited partnership formed under the Partnership Act;
a limited liability company formed under the Limited Liability Company Act;
a Foreign Maritime Entity (a legal entity formed and existing in another jurisdiction and registered in Liberia for the purpose of owning a ship) qualified to own a vessel as provided in Chapter 13 of the Business Corporation Act, and Sections 51(6)(c) of the Maritime Law.

Further details of the registration process are available from registration@liscr.com or from any LISCR office.

Liberia Registration Fees And Charges

Where a ship is to be registered upon transfer from a foreign flag, or is a newbuilding, both registration fees and the first year's Liberian tonnage taxes and annual fees are payable prior to registration.

Annual tonnage taxes become due and owing in full on January 1 of a given year. Where ownership of a vessel is to be transferred shortly after the commencement of a calendar year, the buyer and seller should take particular care, in advance of the closing, to provide for payment of those taxes.

The Registry reduced its fees and tonnage taxes, as of July 1, 2000, and now provides two standard pricing options:

For ships of 14,000 or more net tons, tonnage taxes are US$ 0.10 per net ton, plus a flat annual fee of $3,800.00 per vessel. There are separate fees for inspections and MIIPS contributions, to cover IMO dues and marine investigations.
For ships of less than 14,000 net tons, tonnage taxes are US$ 0.40 per net ton, plus MIIPS charges and a $1,200.00 inspection fee.

In 2000, the Registry waived registration fees until further notice, and guaranteed that fees would not be increased for at least five years.

Liberia Maritime Safety

The Liberian ship registry is recognized as the leading open registry in terms of safety and quality. Service and efficiency in response to owners' needs is a primary attraction as responsiveness and high level of service often surpasses that offered by many national flags. The fleet average age is by far one the youngest of all flags, national and open.

The excellent record of the fleet can be attributed to many factors including; delegation of statutory surveys to the leading classification societies, a worldwide network of nautical inspectors who perform annual safety inspections and well qualified and documented professional seafarers who meet the highest standards of training, experience and certification. The Registry regulates Liberian flagged ship from a basis of well-documented maritime laws, regulations, and Marine notices to enforce the Registry's maritime safety, security and pollution prevention programs.

LISCR uses a worldwide network of nautical inspectors to conduct annual safety inspections, which complement the surveys conducted by the classification societies. These inspections are focused on operational, manning, training and safety management issues. This program is critical to maintaining the quality of the ship registry.

LISCR tracks and reports to the IMO on all Port State Detentions of Liberian Flag vessels, although there have been very few of these. The nautical inspectors have come to the aid of detained vessels and the registry by using their expertise to help correct the deficiencies identified by the Port State Inspector or, in some cases, removing the record of Port State detention when the reported deficiency was not found to be applicable to the particular vessel or operation.

As evident by the attack on the MT Tanker LIMBURG in October 2002, commercial ships and their crews are not only targets of crimes such as robbery, piracy and hostage taking, but are now also potential targets of terrorist attacks. The Liberian Administration believes the new International Ship and Port Security (ISPS) Code, when properly implemented onboard and in conjunction with a vessel's shore-side organization , can reduce the threat of crimes or attacks against Liberian vessels and their crews, and minimize the potential vulnerability of neighbouring environments.

Liberia has taken a clear industry lead in terms of carrying out certifications and audits for the ISPS Code, which entered into force on July 1 this year. Despite widespread concerns of slow implementation throughout the industry, Liberia was the pacesetter in terms of ISPS plan approvals and onboard audits and certification. For example, by early May 2004, 95% of Liberian security plans had been approved and nearly two-thirds of the mandated ISPS Audits had either been completed or scheduled. Liberia was also the first registry to partner with the United States' Proliferation Security Initiative. Working together with US officials, Liberia helped to draft a bilateral agreement, which addresses the threat of transportation of weapons of mass destruction by sea. Other maritime nations are now signing the very same agreement, which was pioneered by Liberia and the United States.

Many shipowners acknowledged Liberia's professional and efficient implementation of the ISPS Code. In fact, two-thirds of Liberia's fleet chose LISCR to conduct their security audits, over and above other Responsible Security Organisations approved by the Registry.

Liberia Seafarers

There are no citizenship requirements for officers or seafarers but the Registry's administration of seafarers' identity, qualifications and experience is extensive, including a trial program of biometric identification. Manning requirements are dependent on type, size and route of vessel. The Office of the Deputy Commissioner may grant temporary waivers from its Operations Center in Virginia.

The Seafarer's Department at the Liberian Registry certifies and documents officers and ratings that sail aboard Liberian registered ships. This department is responsible for issuing Seafarer Identification and Record Books, special qualification certificates and all officer certificates.

The Seafarer's Department was the first department to benefit from one of LISCR's high tech computerized systems. The Seafarers Electronic Application (SEA) System is currently available to all of LISCR's filing agents. The system allows agents to transmit all applications for seafarer documents electronically through a secure e-commerce system. By using this electronic application system, agents will receive the documents requested in a matter of days, rather than weeks. Further benefits include cost savings to the owners/agents and a better way to manage applications sent for processing.

LIBERIA: OFFSHORE BUSINESS SECTORS

On this Page: