Bermuda
Shipowner Eligibility
The ownership of a Bermuda ship is divided into 64 shares which are, themselves, indivisible. It is a requirement that a majority of the shares (at least 33) are owned by "qualified" persons. In general a person is a qualified person if they are:
A British citizen
A British Dependent Territories citizen
A British Overseas citizen
A British citizen under the 1981 Act
Citizen of the Republic of Ireland
A body corporate registered in the UK or in a UK dependent territory.
A body corporate registered in the EU or the EEA.
The relevant overseas territories are: Anguilla, Bermuda, Cayman Islands, Channel Islands, Falkland Islands and Dependencies, Gibraltar, Isle of Man, Montserrat, Pitcairn Islands, St. Helena and Dependencies, Turks and Caicos Islands, and the British Virgin Islands.
Owners of vessels of 24 meters or more in length who are not resident in Bermuda are required to appoint a representative person who is resident in Bermuda. This person, typically a law firm, is nominated at the time of application. Minority foreign ownership is permitted up to 31 of 64 shares.
About the Flag
Bermuda is a UK Overseas Territory which has its own Parliament and which makes its own national laws. The UK extends international maritime and other conventions to Bermuda where they are enacted into Bermuda law for Bermuda ships. The territory has a sound legal framework for company law and shipping law, based on UK practice and is a reputable jurisdiction for carrying out ship registry and finance transactions. Bermuda offers the option to set up exempt companies to carry on international trade and is a base of choice for a great many well known large shipping interests.
The Bermuda Ship Registry is based in Hamilton in Bermuda but also has a team of experienced surveyors based in the UK, Croatia and Spain who are available to attend ships easily and quickly for surveys and audits when required. The registry is a UK category 1 register which means it is authorised to register ships of all types and sizes.
Currently the makeup of the register shows high percentages of passenger cruise ships, LNG tankers, bulk carriers and tankers, with a number of very large commercial yachts. The new Passenger Yacht Code is available for owners wishing to register such craft in Bermuda. Facilities exist to legally empower ship's captains to perform legal marriages on board ships.
The Merchant Shipping Act of 2002 provides the primary legislation for merchant shipping practices in Bermuda. The port of registry for Bermuda ships is Hamilton. The registry of ships in Bermuda is governed by the Bermuda Merchant Shipping (Registration of Ships) regulations 2003 which define who can be a qualified owner and the processes for registry. Priority of mortgages and related matters follow UK practice and are well understood. The registry is able to accept demise registry both "in" and "out."
The registry charges an annual tonnage fee based on net tonnage plus charges on an hourly basis for the attendance of surveyors. The registry is available, with notice, 24 hours per day and 365 days per year for registry transactions and has an emergency telephone cover 24 hours per day for survey emergencies.
Bermuda enjoys a high reputation in the various Port State Control areas and is currently the highest ranking flag on the Paris MOU "White List." The territory has completed its voluntary IMO flag state audit which will make Bermuda a "low risk" flag in the Paris MOU.
The Bermuda Ship Registry has existed since 1789 and in its present form it has been an internationally successful registry since the 1980s.
Bermuda ships are British ships and fly the red ensign although they are not UK ships and Bermuda is not an EC flag. The Bermuda Ship Registry is a part of the wider Red Ensign Group which includes the Isle of Man, Gibraltar, Cayman Islands and the UK. This group collectively provides high quality ship registry services to discerning clients.
Company Formation
The ownership of a Bermuda ship is divided into 64 shares which are, themselves, indivisible. It is a requirement that a majority of the shares (at least 33) are owned by qualified persons, with criteria explained in the Shipowner Eligibility section.
If the owner is not incorporated in Bermuda, a Bermuda representative person, typically a law firm, is nominated at the time of application. Minority foreign ownership is permitted up to 31 of 64 shares.
Taxation
There is no personal taxation in Bermuda. Revenue is generated by means of importation tax on essential and luxury goods destined for the retail trade. Bermuda has no corporate or income taxes, capital gains tax, or withholding tax. Revenue from international companies based in Bermuda is derived from a specified initial and annual tax based on the type of company business.
An agreement between the United States and Bermuda awarded "Equivalent Exemption Status" under the 1986 US Tax Code. This classification allows Bermuda registered ships and shipping companies to apply to the United States Internal Revenue Service for exemption from the 4% freight tax levied on all goods imported into the United States. Bermuda is included in the United States list of status-holding countries which do not impose tax on nonresident shipping operations. Vessels registered in Bermuda are covered by any bilateral taxation treaties to which the United Kingdom is a signatory.
Registration and Documentation
The process for registry in Bermuda is simple and straightforward.
There are a number of standard forms to be completed and these are all available on the Bermuda registry website.
Typically the process is:
Reserve a name,
Submit the application to register,
Submit the details of the owner and manager (confirming that the owner is a qualified owner).
Registrar issues a carving and marking note which states the agreed name, tonnages, numbers etc.
Application to the Telecommunications Department for Radio License, callsign, MMSI number.
Registrar appoints a Class surveyor to confirm the details at registry and sends the essential ship certificates and documents out to the class surveyor prior to registry.
Attending class surveyor verifies that the name and numbers are correctly marked.
Copy of the builder's certificate or bill of sale is verified and confirmed to the registrar,
Ship is registered, and the Class surveyor dates and hands over the certificate of registry and the ship's certificates.
The process can be completed very quickly.
In extenuating circumstances the ship owners can obtain provisional registration for their ships through British Consular offices in consultation with the Department of Maritime Administration, Bermuda.
Bareboat Charter Registration
Bareboat charter registration into and out of Bermuda is allowed between Bermuda and certain other states whose national law permits such arrangements. Ships on bareboat charter registration would be subject to the safety, manning, and antipollution requirements of the secondary flag state and would carry that state's documentation. The primary registration would be suspended except in so far as it relates to title transactions (bills of sale or mortgages).
A ship is eligible to be entered on the Bermuda Demise Charter Register only if it is not a fishing vessel; is not less than 24 meters in length; is registered in a compatible register; is chartered by a demise charter to a person qualified to be the owner of a ship registered in Bermuda; and if the charterer is not resident in Bermuda but has appointed an individual or a body corporate who is resident in Bermuda to be the ship's representative.
Applications for demise charter registration should be made to the Registry of Shipping in Hamilton. The following documentation in addition to the standard application form should be submitted to the Registrar:
Certified copy of the bareboat charterparty
Certified transcript of the entries in the underlying registry including details of ownership and any mortgages, charges, or liens registered against the ship
Written consent of the appropriate maritime authorities of the country of underlying registry to the demise charter registration
Current International Tonnage Certificate and Certificate of Survey
Written consent of any mortgagees and of every owner to the demise charter registration
Name and address of the individual or body corporate appointed as the representative person
Form DC3 (Charterer's Appointment of a Manager)
Such supplementary information and evidence relating to the ship and the ownership thereof as the Registrar may require
The ship would retain her original name unless there is a clash with an existing ship's name. The port of registry to be marked on the stern will be Hamilton, and the ship would fly the Red Ensign. A Certificate of Demise Charter Registration DCR 1 will be issued on completion of registration. On the issuance of the same, the charterer is to surrender to the underlying registry authorities all certificates previously issued by them and make a declaration to that effect to the Bermuda Registrar of Shipping. The registration will endure for five years which may be extended on application by the charterer.
Additionally, vessels registered on the main Bermuda Register are permitted to bareboat charter register to compatible foreign registries provided that the Bermuda Registry of Shipping has given its consent in writing, and the mortgagees, if any, have consented to the registration. The owners are required to surrender the Bermuda Certificate of Registry and other statutory certificates issued by Bermuda. The charterer must make a written undertaking not to fly the Red Ensign during the period of the foreign demise charter registration. The ship would retain her original name unless the Bermuda Registry of Shipping gave its permission for the name to be changed. On registration in the foreign registry, the owner is required to notify the Bermuda Registry and provide the Registrar with a transcript of the registration. The foreign registry will issue the Convention Certificates (SOLAS, Load Line, etc.) to the ship. Liability to pay annual tonnage fees and fees for any transactions remains unaltered while the ship is foreign registered. The maximum period allowed for a bareboat charter registration out of Bermuda is five years.
The ship would retain her original name unless there is a clash with an existing ship's name. The port of registry to be marked on the stern will be Hamilton, and the ship would fly the Red Ensign. A Certificate of Demise Charter Registration DCR 1 will be issued on completion of registration. On the issuance of the same, the charterer is to surrender to the underlying registry authorities all certificates previously issued by them and make a declaration to that effect to the Bermuda Registrar of Shipping. The registration will endure for five years which may be extended on application by the charterer.
Additionally, vessels registered on the main Bermuda Register are permitted to bareboat charter register to compatible foreign registries provided that the Bermuda Registry of Shipping has given its consent in writing, and the mortgagees, if any, have consented to the registration. The owners are required to surrender the Bermuda Certificate of Registry and other statutory certificates issued by Bermuda. The charterer must make a written undertaking not to fly the Red Ensign during the period of the foreign demise charter registration. The ship would retain her original name unless the Bermuda Registry of Shipping gave its permission for the name to be changed. On registration in the foreign registry, the owner is required to notify the Bermuda Registry and provide the Registrar with a transcript of the registration. The foreign registry will issue the Convention Certificates (SOLAS, Load Line, etc.) to the ship. Liability to pay annual tonnage fees and fees for any transactions remains unaltered while the ship is foreign registered. The maximum period allowed for a bareboat charter registration out of Bermuda is five years.
Vessel and Yacht Eligibility & Survey Requirements
There are no absolute restrictions on the age of a vessel applying for registration. However the age of vessel is one of a number of considerations that are taken into account in deciding if a vessel is to be registered. It general Bermuda operates a fleet with a low average age and intends to maintain this. Any vessel proposed for registry will be assessed taking into consideration age, port state control record, manager record, vessel type, class record and a number of other factors before the Administration will make a final decision on acceptability.
Except for United Kingdom registered vessels, all other ships must undergo a flagging-in survey by a surveyor from Bermuda prior to acceptance into the register. A Bermuda surveyor will also carry out a mandatory five yearly safety equipment survey and vessel inspection. All other surveys are carried out in accordance with the requirements of the applicable international conventions by any of:
American Bureau of Shipping
Bureau Veritas
Det Norske Veritas
Lloyd's Register of Shipping
Registro Italiano Navale
Pleasure yachts of any size may also be registered under the Bermuda flag. Owners intending to engage their large pleasure vessels on commercial activities are permitted to do so under the UK's Mega Yacht Code Provisions. Vessels over 400 GRT must comply with the provisions of the International Convention on Marine Pollution, MARPOL 73/78 as amended.
Crewing
In general there are no restrictions on officer nationality on Bermuda vessels.
Pursuant to the 1995 Amendments to the STCW Convention, Bermuda requires all watchkeeping officers and ratings to hold Bermuda Administration issued "endorsements". To obtain Bermuda endorsements, applications and supporting documents should be forwarded to the Registry of Shipping in Bermuda. For the purpose of issuing Endorsements, the Certificates of Competency issued to seafarers by the national administrations of the British Commonwealth countries, Ireland, a member state of the EU or NATO, and countries whose names have been identified on the IMO white list will be considered as acceptable.
Minimum manning requirements are guided by the IMO Resolutions A481 (XII) and ILO Standards Convention No. 147 which are reflected in the Bermuda Merchant Shipping Certification, Manning, Watchkeeping Regulations 1998.
Mortgages
Ship mortgages are governed by the conditions set by the United Kingdom. The protection of mortgagors and mortgagees is covered by the British legal system. Mortgages rank in priority according to the date and time of acceptance for registry, not according to the date of the mortgage deeds themselves.
The mortgage must be in the form acceptable to the Registrar of Shipping for recording. Different forms may be used according to the nature of the mortgage (account current or principal sum). In order to record a mortgage, one original Mortgage Deed and its supporting documents must be submitted to the Registrar of Shipping. If executed outside Bermuda, the Deed must be notarized, and if executed under a Power of Attorney, the original Power of Attorney must be available for sighting and endorsing. It is advantageous to forward a draft copy of a Mortgage Deed to the Registrar in advance of the closing date.
Mortgages may be transferred by execution by the mortgagee. When a transfer or discharge of a mortgage is executed, the original deed should be delivered to the Registrar for recording as soon as possible. Three classes of persons may be entered as mortgagees: individuals, joint mortgagees, and bodies corporate. Foreign individuals and bodies corporate may act as mortgagees.
Costs depend on the type of vessel from $220 (for pleasure vessels) - $440 (for ships).
With prior verification of documentation, mortgages can be registered within one hour.
Fees
For further information, contact the registry.
Contact
Bermuda Shipping and Maritime Authority
Mr Taran Card
PO Box Hm1628
Hamilton HM GX
Bermuda (United Kingdom)
Phone
+1 441 295 7251
Email
survey@bermudashipping.bm
Fax
+1441 295 3718
Stockholm Agreement 96
IMO Convention 48
* IMO amendments 91
* IMO amendments 93
SOLAS Convention 74
SOLAS Protocol 78
SOLAS Protocol 88
LOAD LINES Convention 66
LOAD LINES Protocol 88
TONNAGE Convention 69
COLREG Convention 72
CSC Convention 72
CSC amendments 93
SFV Protocol 93
STCW Convention 78
STCW-F Convention 95
SAR Convention 79
STP Agreement 71
STP Protocol 73
IMSO Convention 76
INMARSAT OA 76
INMARSAT amendments 94
INMARSAT amendments 98
IMSO amendments 2006
IMSO amendments 2008
FACILITATION Convention 65
MARPOL 73/78 (Annex I/II)
MARPOL 73/78 (Annex IV)
MARPOL 73/78 (Annex V)
MARPOL Protocol 97 (Annex VI)
London Convention 72
London Convention Protocol 96
INTERVENTION Convention 69
INTERVENTION Protocol 73
CLC Convention 69
CLC Protocol 76
CLC Protocol 92
FUND Convention 71
FUND Protocol 92
FUND Protocol 2003
NUCLEAR Convention 71
MARPOL 73/78 (Annex III)
PAL Protocol 76
PAL Protocol 90
PAL Protocol 02
LLMC Convention 76
LLMC Protocol 96
SUA Convention 2005
SUA Protocol 2005
SALVAGE Convention 89
OPRC Convention 90
HNS Convention 96
OPRC/HNS 2000
BUNKERS CONVENTION 01
ANTI FOULING 01
BALLASTWATER 2004
NAIROBI WRC 2007
HONG KONG CONVENTION
HNS PROT 2010
Cape Town Agreement 2012
SUA Convention 88
SUA Protocol 88
IMO Conventions
Status of Conventions Bermuda (Member of the Red Ensign Group)
IMO Convention 48 x
SOLAS Convention 74 x
SOLAS Protocol 78 x
SOLAS Protocol 88 x
SOLAS Agreement 96 x
LOAD LINES Convention 66 x
LOAD LINES Protocol 88 x
TONNAGE Convention 69 x
COLREG Convention 72 x
CSC Convention 72 x
CSC amendments 93
SFV Protocol 93
Cape Town Agreement 2012
STCW Convention 78 x
STCW-F Convention 95
SAR Convention 79 x
STP Agreement 71 x
Space STP Protocol 73 x
IMSO Convention 76 x
INMARSAT OA 76 x
IMSO amendments 2006
IMSO amendments 2008
FACILITATION Convention 65 x
MARPOL 73/78 (Annex I/II) x
MARPOL 73/78 (Annex III) x
MARPOL 73/78 (Annex IV) x
MARPOL 73/78 (Annex V) x
MARPOL Protocol 97 (Annex VI) x
London Convention 72 x
London Convention Protocol 96 x
INTERVENTION Convention 69 x
INTERVENTION Protocol 73 x
CLC Convention 69 d
CLC Protocol 76 d
CLC Protocol 92 x
FUND Protocol 76 d
FUND Protocol 92 x
FUND Protocol 2003 x
NUCLEAR Convention 71
PAL Convention 74 d
PAL Protocol 76 d
PAL Protocol 90
PAL Protocol 02 x
LLMC Convention 76 d
LLMC Protocol 96 x
SUA Convention 88 x
SUA Protocol 88 x
SUA Convention 2005
SUA Protocol 2005
SALVAGE Convention 89 x
OPRC Convention 90 x
HNS Convention 96
HNS PROT 2010
OPRC/HNS 2000
BUNKERS CONVENTION 01 x
ANTI FOULING 2001 x
BALLASTWATER 2004
NAIROBI WRC 2007 x
HONG KONG CONVENTION
x= ratification
d=denunciation