(F pg1) Calypso Graphics - 2022

The Rise in Registration of Shipping Vessels in Singapore

Strong Shipping Foundations and Infrastructure

The Singapore Registry of Ships (SRS) is the administration responsible for executing the proper registration of ships sailing under the Singapore flag. With more than 4,400 ships that aggregate over 96 million gross tons (GT), the SRS is amongst the world’s top ten registries with one of the youngest quality fleets. The fleet mainly comprises tankers, bulk carriers and container ships – many of which play a crucial role in moving a staggering 600 million tons of cargo around the world annually.

In addition to this fleet, Singapore has also seen an increase in the registration of offshore vessels such as floating production storage and offloading units in recent years due to the rise in support for the oil and gas industry.

Hong Kong is another option for ship registration in Asia but, according to JTJB Partner Rafizah Gaffoor: “Singapore has a number of advantages for example, it is easier to meet the requirement of a Singapore-incorporated company as owner (it can take as little as a few hours to incorporate a Singapore company), an option for dual registration, and various subsidies and schemes are available such as the Block Transfer Scheme which we often assist clients with.”

Benefits of a Singapore Ship Registration

Singapore is seen as a stable and politically neutral place for ship registration. A range of other benefits exist, including:

  • Recognition of international standards;
  • Strong safety record and mark of quality;
  • Business-friendly environment;
  • Efficient infrastructure and administration;
  • Pro-business schemes;
  • Tax exemptions – profits are exempt from Singapore income tax;
  • Flexibility on crew nationality;
  • Recognition of foreign certificates of officers and crew;
  • No capital gains tax when selling.

One further significant benefit of ships flying the Singapore flag is that it also offers easy streamlined processes for recording a mortgage which in turn may make it more attractive to mortgagee banks for financing.

In this regard, when comparing Singapore to other jurisdictions, Rafizah notes: “Until recently, when registering the mortgage instrument in certain countries, security documents such as the deed of covenants had to be translated into the national language of that country. Some registries also have the provisional vs. definitive mortgage registration process which can be confusing for vessel owners. Singapore offers a straight-forward, streamlined alternative.”

Another reason for considering the SRS is that it is not a flag of convenience. Flags of convenience have in recent times face backlash from  seafarers’ unions like the International Transport Workers’ Federation (ITF).

Rafizah comments: “We have seen a situation where the ITF tried to oppose our clients’ registration with SMOU because our clients’ vessels were registered with flags of convenience. They were placated when our clients committed to registering future vessels with the Singapore ship registry.”

Staying Competitive in Today’s Market and Promoting Greener Shipping

Singapore’s Maritime Port Authority (MPA) has issued incentives for Singapore-flagged ships to undertake decarbonisation efforts, including the Green Ship Programme (GSP). The GSP is one of four programmes offered under the Maritime Singapore Green Initiative (MSGI). The full list of programmes is as follows:

  • Green Ship Programme
  • Green Port Programme
  • Green Energy and Technology Programme
  • Green Awareness Programme

The initiative first launched in 2011 with a mission of encouraging Singapore vessels to reduce carbon emissions, whilst the GSP operates on one key principle – rewarding ship owners who voluntarily adopt solutions that enable ships to exceed environmental regulatory standards mandated by the International Maritime Organisation (IMO). Due to popular demand and positive feedback, the GSP has been extended until 31st December 2024.

The MPA is continually looking at how Singapore can remain both innovative and competitive. In line with this, GSP offers the following attractive incentives to shipowners:

CriteriaReduction on Initial Registration FeeRebates on Annual Tonnage Tax
Adoption of zero-carbon fuelled engine100%100%
Adoption of engine capable of using low-carbon fuels75%50%
EEDI reduction factor exceeds IMO’s Phase 3 requirements by 10% or more50%20%

Rafizah concludes: With the recent surge in shipbuilding contracts and for the various reasons explored in this article, Singapore’s ship registry should be carefully considered as the best option for shipowners looking to register newbuilds in the future”.

Don’t miss out on the latest legal updates and subscribe to our mailing list for timely insights – subscribe here