We look at the third major EU International Registry (along with Gibraltar and Malta) and the benefits of registering a yacht in Madeira.

The International Shipping Register of Madeira (MAR) was established in 1989 as part of the Madeira International Business Centre (“MIBC”) “package” of taxation benefits available to potential investors.

The aim of MAR is to offer a credible alternative to other international registers, maintaining the high quality and safety standards of a conventional register. Vessels registered with MAR have to carry the Portuguese flag and are subject to all International Treaties, Pacts and Conventions entered into by Portugal. Consequently, the Register is of the highest standard and has European Union (EU) credibility. The Register is also not regarded by the International Transport Workers’ Federation (ITF) as a flag of convenience and is included in the Paris Memorandum of Understanding (MOU) White List.

MAR’s purpose is to register all acts and contracts referring to a vessel, and to control the security requirements demanded by International Conventions that apply. Registrations also benefit from the services of the Private Commercial Register and Notary of Madeira’s IBC. It is important to note that MAR is not only a registration entity. MAR additionally provides ship inspections, call sign attribution, ship certifications and recognition of crew services.

Qualified Vessels

• Cargo ships (container/bulk/general cargo carriers) – fishing boats excluded
• Barges
• Tugboats and emergency rescue vessels
• Passenger ships
• Fixed or movable platforms or rigs
• Commercial and pleasure yachts (length equal to or greater than 7 metres)

Qualified Owners

Any individual or entity can register vessels with MAR. There are no nationality requirements for owners of MAR registered vessels. Entities can be companies, branches or corporate representations, which may or may not be operating within the scope of the MIBC.

Entities not operating within the framework of the MIBC have to appoint a local legal representative with the necessary powers to ensure full representation before the State and Regional Authorities.

Entities licensed within the framework of the MIBC, and undertaking maritime transportation, can enjoy the benefits of the tax incentives provided by the MIBC.

Advantages of Ship Registration with MAR

In comparison with other international shipping registers, MAR offers significant advantages:

• EU Flag – with total access to continental and island cabotage within the framework of the EU.
• The Register is of the highest standard, has EU credibility, is not regarded by the ITF as a flag of convenience and is included in the Paris MOU White List.
• There are no nationality requirements for ship-owners of vessels registered in MAR. They are not required to have their head office in Madeira. It is sufficient to have local legal representation with adequate powers.
• If a MIBC company is formed with its corporate object being maritime transportation, no minimum share capital requirements apply.
• The purchase and sale of vessels does not require any prior institutional authorisation. The sale becomes effective through a Bill of Sale with the Seller’s signature certified by a public notary.
• The captain and 50% of the safe manning of the ship must be “European”. This includes nationalities such as Russians, Ukrainians and Poles, as well as citizens of Portuguese-speaking countries. This allows for flexible manning. Such a requirement may also be derogated if duly justified.
• The contracting of crew and their conditions of work are subject exclusively to the rules laid out in the International Conventions current in Portugal, namely the Regulations established at the Labour World Organisation.
• The existence of a competitive social security regime. Crew members of vessels registered in MAR and their respective employers are not obliged to contribute to the Portuguese social security system. However, some form of insurance must be guaranteed.
• The existence of a flexible mortgage system, allowing the mortgagor and the mortgagee, by written agreement, to choose the legal system of a particular country that will govern the terms of the mortgage.
• Temporary registration is allowed by law, as well as the bareboat charter, and may be carried out in Portuguese consulates or in any other departments which have been or could become duly authorised.
• The existence of a network of correspondents in various European countries with the objective of providing local support to ship owners wishing to register vessels in MAR.
• Seven International Classification Societies are recognised in Portugal. MAR can delegate some of its functions to these Societies and the activities of ship owners working through these Societies is made easier.
• Low registration costs.

Advantages of Yacht Registration in MAR

• EU register with full and unrestricted access to navigate in EU waters.
• The yacht-owners are not required to have their head office in Madeira. It is sufficient to have local legal representation.
• Low taxation.
• The yacht does not have to sail to, or be moored in, Madeira. MAR may delegate to Classification Societies, or to other recognised entities, the undertaking of certain tasks and recognise the certificates issued by these Societies.
• No citizenship requirements for the crews of commercial yachts registered in MAR.
• Speed and efficiency of registration.
• Flexible social security regime for the crews of commercial yachts.
• Flexible mortgage system, allowing the mortgagor and the mortgagee, by written agreement, to choose the legal system of a particular country that will govern the terms of the mortgage.
• Reduced costs of registration.

The Advantages of Madeira Companies

Whilst an entity does not necessarily need to be a Madeira company to register a vessel in MAR, as indicated above, Madeira companies do offer several advantages, including:

• Reduced corporate income tax rates ranging from 4% – 5% until 2020.
• No withholding tax on the distribution of dividends, royalties and interest to non-resident entities.
• Crew wages are exempt from income tax.
• Automatic VAT registration. On incorporation, companies are automatically provided with a VAT registration number.
• Exemption from an initial vessel registration fee and a 20% reduction in the annual vessel registration fee.
• Access to the Portuguese double taxation treaty network.
  

Additional Information

For further information regarding ship and yacht registration in Madeira contact Gisela Martins or Nuno Coelho at Dixcart Management (Madeira) Lda.

Dixcart Management (Madeira) Lda
Rua dos Ilheus, 6
9000-176 Funchal
Madeira
Portugal

Tel: +351 291 225019 / 225403
Fax: +351 291 226418
Email: advice.madeira@dixcart.com