More UAE vessels opt for open registries

An increasing number of vessels from the UAE are registering with open registries which offer competitive fee structures.

A rising interest among shipping companies in the UAE and the region to register their vessels with International Registries Inc (IRI), a Marshall Islands-based maritime registry company, has prompted the company to open its office in Dubai, senior officials from the company said.

This is the first such office of its kind in Dubai. About a hundred vessels from the region are registered with IRI. The company that is ranked fourth in the list of such companies globally (the list is topped by Panama) now pins hope on the Middle East to edge towards the first slot.

"The Marshall Islands Registry currently has more than 80 vessels that are owned or operated out of the Gulf. More than one third of these vessels are part of the Qatar gas field project of which the Marshall Islands Registry was chosen as the key registry for this project. In 2009, nine vessels have been registered that are owned or operated out of the Gulf with additional registrations scheduled throughout the year," said John Ramage, the company's director for worldwide operations.

An open registry refers to a system of registration where the nationality of the ship owner is different from the country where his ship is registered. The country of registration determines the laws under which the ship is required to operate. About half of the world's merchant ships today are registered with such open registries.

Traditional reasons for choosing an open register include protection from income taxes, wage scales and regulations.

A specific example of the advantage of flying a flag of onvenience is bypassing the 50 per cent duty that the US Government charges on repairs performed on American-flagged ships in foreign ports.

Captain Sanjay K Maini the company's country head for India earlier told Emirates Business that an increasing number of vessels from the UAE are registering with IRI.

An IRI registered vessel carries the Marshall Islands flag. An IRI brochure says that registering with the IRI brings several benefits to the ship owner or operator and this includes zero tax jurisdiction, low costs of registration and confidentiality.

Marshall Islands provides a neutral domicile for parties of a different citizenship and all non-resident Marshall Island entities are statutorily exempted from the Marshall islands taxes, the brochure adds.

A UAE vessel or that from any other country registering at the Marshall Islands does not put the country in competition with the country concerned, Ramage said.

"The Marshall Islands Registry is not in competition with the UAE flag nor any other national flag. An owner will choose a national flag for a number of different reasons against some of which an open registry cannot compete.

"However, the Marshall Islands does however compete against the other open registries by providing first class service in the client's own time zone supported by a global network of 20 offices located in the world's major shipping centers," Ramage said.

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