Bermuda Shipping Industry
For over 50 years, the shipping industry in Bermuda has played a key role in placing the island into the international business map. Today, Bermuda is a thriving center for international ship financing and registration. As of January 2010, the Department of Maritime Administration (DMA) in Bermuda has 159 commercial vessels registered with them.
This totals to 10.4 million gross tons. There are also 250 yachts registered with DMA with a gross tonnage of over 67,000. It is estimated that by 2012, there will be 200 commercial vehicles registered with the Bermuda DMA.
Over the years, many of the world’s leading ship owners, managers, builders, insurers, lawyers, accountants and bankers have developed close relationships with Bermuda. The collaboration has resulted in creation of financial structures that are tailored to the specific requirements of the shipping industry.
Here is an example of how some companies formed and evolved in Bermuda:
Following the introduction of Oil Pollution Act by the US, two large insurance companies (The Shipowners Insurance and Guaranty Company Ltd. and Shoreline Mutual Bermuda Ltd.) were set up in the island. They provided the guarantees so that Certificates of Financial Responsibility could be issued by the Coast Guard for all ships trading in US waters. This facilitated the trade to continue through the US waters.
There has been two major developments in Bermuda around ship finance:
1. Bermuda has been used increasingly as the base for LNG/LPG and FPSO (Floating Production, Storage and Offloading) ships both in terms of incorporation and management, as well as for registration.
2. Restructuring of the shipping groups (both from corporate and financial perspective).
So why is Bermuda a leading center and a jurisdiction of choice for the shipping industry? There are several reasons:
Bermuda has a sophisticated and stable regulatory framework;
Excellent shipping industry expertise in Bermuda;
A legal system that is mostly derived from the British Law, allowing a final appeal to be made to the Judicial Committee of the Privy Council of London;
An efficient and well-run shipping registry that can operate on a 24-hour basis to accommodate clients. This flexibility makes Bermuda a very user-friendly jurisdiction for the shipping industry;
The lowest port state control detention figures for 2008 and 2009 as recorded by the Paris Memorandum Of Understanding White List. Bermuda ships are considered low-risk vessels and accordingly are inspected less frequently than others, a factor which is quite attractive to potential clients;
Bermuda government is committed to the adaptability of Bermuda’s international laws so that the requirements and demands of international clients are always met.
Bermuda Tax: No income tax or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax is applicable to a Bermuda company;
No exchange controls.
2) Check out Bermuda Economy
to know all about economic factors and trends in Bermuda.