It
has now become the norm for ships to
be registered in International Offshore
Financial Centres (IOFCs) and there has
been intense competition between some of
the IOFCs to offer the most advantageous
operating and fiscal regime. Owners are
concerned with labour regulations and manning
scales, as well as with the more obvious
tax advantages.
Ownership,
registration, administration and operation
of ships are four different activities,
and are often situated in two, three or
four different jurisdictions in order to
achieve an optimum result. Thus, an owner
in a high-tax, non-maritime country might
register his ships in
a low-tax jurisdiction, operate them from
there, but administer them from a European
port city.
It
is normal to create a company
in the low-tax jurisdiction for each ship,
in order to provide insulation in the event
of problems. In addition to ship ownership,
other maritime activities sometimes conducted
from IOFCs include container leasing and
ship chartering. Private groups with their
own aircraft sometimes use an IOFC to create
a 'captive' aircraft operating company which
can charge market rates and make a profit
in the IOFC.
Liberia and
Panama
were for a long time the best-known 'flags
of convenience', but a number of other countries
offer or are about to offer shipping registries,
including Cyprus,
Bahamas,
Cayman
Islands,
Malta,
Madeira,
and The
Netherlands Antilles.
A
study by the Center for Freedom and Prosperity
Foundation released in August, 2004, analyzed
the impact of open registries on the global
shipping market. These registries, maintained
by about 30 countries, are open to shipowners
from all nations and the study finds that
they have boosted international trade and
the world economy by reducing shipping costs
and increasing efficiency in the industry.
The
study was written by Heritage Foundation
Senior Fellow Daniel Mitchell. Commenting
on his study, Mitchell stated, "Unlike
monopolistic national registries, open registries
use a market-based model. And since they
compete with each other to attract ships,
this has led to better service for shipowners
and more rational tax and regulatory systems."
The
OECD has targeted open registries as part
of its anti-tax competition campaign and
the International Transport Workers' Federation
(ITF) has been fighting against so-called
flags-of-convenience since 1948. The International
Maritime Organization, with the support
of the United States government, has rejected
these efforts to hinder international trade.
Veronique de Rugy of the American Enterprise
Institute warned that the anti-competition
agendas of the Organization for Economic
Cooperation and Development (OECD) and the
(ITF) are contrary to the interests of all
trading nations. "Restricting open
registries and returning to the days of
high-cost, over-taxed national registries
would throw sand in the gears of the global
economy," she explained.
In the Lowtax.net
jurisdictions section, information is
given about business activities in each
of the following completed jurisdictions:
Andorra,
Anguilla, Aruba,
Bahamas,
Barbados,
Belize,
Bermuda,
British
Virgin Islands,
Cayman Islands,
Cook Islands,
Costa Rica, Dubai,
Cyprus,
Gibraltar,
Grenada, Guernsey,
Hong Kong,
Ireland,
Isle
of Man, Jersey,
Labuan,
Liechtenstein,
Luxembourg,
Madeira,
Malta,
Mauritius,
Monaco,
The
Netherlands Antilles,
Panama, Seychelles,
St Vincent
and the Grenadines, Switzerland,
Turks & Caicos
Islands and Vanuatu.
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