Malaysia
Shipowner Eligibility
Vessels should be owned by a Malaysian citizen or a corporation with the following characteristics:
• Incorporated in Malaysia
• Principal office of the corporation is in Malaysia
• Management of the corporation is mainly in Malaysia
• Majority of the directors and shareholding (including voting share) of the corporation is held by
Malaysians free from any trust or obligation (Majority in this instance means 51% subject to such changes by the Minister).
If the shipowner wishes to engage in domestic shipping, a Domestic License must be obtained. All of the following conditions must be satisfied prior to the license approval:
• Majority shareholding of the corporation must be held by Malaysia citizens
• Minimum of 30% of the shareholding must be bumiputras
• Minimum of 30% of the directors of the corporation must be bumiputras
• Minimum of 30% of the employees of the corporation must be bumiputras
• Minimum of 75% of the ratings must be Malaysia citizens
About the Flag
Located in southeastern Asia, Malaysia is a federation of thirteen states comprising eleven from Peninsula Malaysia and two from the island of Borneo (Sabah and Sarawak). The capital city is Kuala Lumpur, and the official language is Malay. Malaysia was a colony of the British Empire until 1957. Today it is a constitutional monarchy. The Paramount Ruler is the Chief of State and the Prime Minister is the Head of Government. There is a bicameral parliament. The legal system is based on English common law. Malaysia is a member of the Commonwealth, ASEAN, the UN, and the IMO.
The Malaysian economy is a mixture of private enterprise and a well-managed public sector. Chief trading partners are Singapore and the United States. Principal exports are electronic equipment, petroleum and petroleum products, palm oil, and wood and wood products. The currency is the ringgit.
Registration of ships in Malaysia follows an almost identical practice as in the United Kingdom from which most of the existing Malaysian maritime laws and administrative practices are derived. The law governing ship registration is the Merchant Shipping Ordinance 1952.
The Directorate General of the Marine Department oversees the Malaysian Ship Registry, the Malaysian International Ship Registry, as well as the Langkawi International Yacht Registry.
Company Formation
The Companies Act 1965 is the principal legislation governing companies in Malaysia. The Act provides for three types of companies: companies limited by shares, companies limited by guarantee, and unlimited companies. The most common type of business organization in Malaysia is a company limited by shares ("limited company"). A limited company can be classified as a private, exempt company private, or public. A private limited company is classified as an exempt private company if it limits the number of its shareholders to 20 and no corporation holds any direct or indirect beneficial interest in the company.
An exempt private company does not have to file its accounts with the Registrar of Companies.
Registration usually takes about six to eight weeks. Already incorporated ("shelf ") companies, which are commonly used in Malaysia, are also available. The minimum number of founders is two. A company must have at least two shareholders. Directors must be natural persons, and a company must have at least two directors who are ordinarily resident in Malaysia. The minimum paid up capital is RM 2.00. Labuan has been designated the offshore center of Malaysia. Before forming an offshore company, a person must obtain approval of the proposed name of the company from the Regional Registrar of Companies in Labuan.
Taxation
Ships above 26 GRT are exempted from import duty; an import duty of 30% is imposed on ships less than 26 GRT. Dredges, floating or submersible drilling or production platforms or inflatable rafts are liable for an import duty of 5%. The import duty on warships is also 5%. Accelerated depreciation on ships is allowed with an initial first year capital allowance of 20% and a further special allowance of 6-10%. Statutory income of a shipowning company from the business of transporting passengers, mail, livestock, or goods by a sea-going Malaysia ship is tax exempt. Any dividend paid out of such exempt account is also exempt from tax. There is tax exemption to any person, whether local or foreign, for income derived from employment on board a Malaysian ship.
Registration and Documentation
The ports of registry in Malaysia are Kuching, Kota Kinabalu, Penang, and Port Klang. Vessels are generally first registered on a provisional basis by the Registrar of Ships at one of these four ports or a Malaysian diplomatic or consular officer. The following documents must be presented for provisional registration of a vessel:
• Bill of Sale or Builder’s Certificate
• Certificate of Survey
• Confirmation of Carving
The following documents must be submitted for permanent registration of the vessel:
• Application form
• Statutory declaration on ownership which must include the following details (forms are available):
i) Name of the ship and its existing tonnage
ii) Statement of the date when and place where the vessel was built, or if the date and place of building are not known, a statement that the declarant does not know the date and place of the building of the ship
iii) Statement as to the owner of the ship and the citizenship of such owner, and if the vessel is owned by more than one person, the number of shares to which each is entitled
iv) Statement of the name of the master of the vessel and his citizenship
v) Statement that no other person (other than those declared) is entitled as owner of any legal or beneficial interest in the ship or any share thereof
vi) Except where the operator and the owner of the ship are the same person, the name and citizenship of the operator of the ship
vii) Declaration that the particulars stated in the form are true to the best of the applicant’s knowledge and belief
• Notes of Name Proposed (form wherein the applicant must indicate whether the vessel is newly built or previously registered under another flag)
• If owner is an individual, a photocopy of the Citizen Certificate
• If owner is a corporation, a certified true copy of the Memorandum and Articles of Association and Certificate of Incorporation; a certification under common seal that the majority shareholding including voting share of the corporation is held by Malaysian citizens free from trust or obligations in favor of non-Malaysians; and an Authority Form appointing a public officer authorized to make declarations on behalf of the owner
• Builder’s Certificate or Deletion Certificate
• Original Bill of Sale duly authenticated
• Certificate of Survey issued by the Surveyors of Ships, Malaysia
• Memorandum as to registration of the managing owners (forms available)
• Certification from Customs Department that import duty has been paid, if applicable
Upon due acceptance of the above documents by the Registry, the Registrar will allocate an official number to the vessel and will issue a Carving and Marking Note.
Bareboat Charter Registration
Shipowners with a Domestic Shipping License may charter a vessel out for coastal shipping. However, Malaysia does not allow parallel registration into or out of the flag.
Vessel and Yacht Eligibility & Survey Requirements
There is no restriction on the age of a vessel for registration. The survey of ships is conducted by the Office of the Surveyor of Ships who may designate authorized classification societies to survey the vessel on behalf of the Government of Malaysia. In addition, the vessel must be classed with one of the following classification societies:
• American Bureau of Shipping
• Bureau Veritas
• Det Norske Veritas
• Lloyd’s Register of Shipping
• Nippon Kaiji Kyokai
• Korean Register of Shipping
• China Classification Society
• Indian Register of Shipping
• Russian Maritime Register of Shipping
• Registro Italiano Navale
• Ship’s Classification Malaysia
Crewing
There are no nationality restrictions for crewmembers on vessels trading internationally. Every foreign-going ship must have officers duly certified under the Merchant Shipping Ordinance 1952 as follows:
• Every ship must have a master holding a Certificate of Competency as Master of a foreign-going ship
• If the ship is 5,000 GRT or more:
o The Chief Officer must hold a Certificate of Competency not lower than that of First Mate of a foreign-going ship
o The Second Officer must hold a Certificate of Competency not lower than that of Second Mate of a foreign-going ship
o The Third Officer must hold a Certificate of Competency not lower than that of Third Mate of a foreign-going ship
• If the ship is less than 5,000 GRT
o The Chief Officer must hold a Certificate of Competency not lower than that of First Mate of a foreign-going ship
o The Second Officer must hold a Certificate of Competency not lower than that of Third Mate of foreign-going ship
Mortgages
From the Merchant Shipping Ordinance:
A registered ship or a share therein may be made in security for a loan or other valuable consideration, and the instrument creating such security shall be in the form, as may be prescribed by the Minister of Shipping. On production of the instrument to the registrar of the ship’s port of registry he shall record such instrument in the register book; and when there are more mortgages than one, record them in the order in which they are produced to him and by memorandum notifying each mortgagor of the mortgage recorded by him.
Where a registered mortgage is discharged the registrar shall make an entry in the register book to that effect and the property (if any) shall revest in the mortgagor.
If there are more mortgages than one registered in respect of the same ship or share, the mortgages shall have priority in the order of the date on which the mortgage is recorded in the register book.
The mortgagee shall not by reason of the mortgage be deemed to be the owner of the ship or the shareholder, nor shall the mortgagor be deemed to have ceased to be the owner thereof except as far as may be necessary for making a mortgaged ship or share available as a security for the mortgage debt.
Every registered mortgagee may on the foreclosure of the mortgage dispose of the ship or the share in respect of which he is registered, and to give effectual receipts for the purchase money. Where there are more persons than one registered as the mortgagees of the same ship or share, a subsequent mortgagee shall not, except under the order of a court of competent jurisdiction, sell the ship or share without the concurrence of every prior mortgagee.
A registered mortgage of a ship or share shall not be affected by the mortgagor having been adjudicated bankrupt after the date of the record of such mortgage, notwithstanding the ship or share is in the possession of the mortgagor at the date of adjudication. The mortgagee shall have preference over any right, claim, or interest therein of any creditor, trustee or assignee.
A registered mortgage of a ship or share may be assigned to any person and the deed affecting the assignment shall be in the form as may be prescribed by the Minister. On production to the registrar the deed of assignment, he shall record it in the register book the name of the assignee of the mortgage and certify the entry on the deed of assignment. The assignee shall have the same right of preference as the assignor.
Where the interest of the mortgage in a ship or share is transferred, otherwise than by a transfer under this Ordinance, the person to whom the interest of the mortgage in the ship or share is transferred shall make a declaration in a manner as may be prescribed by the Minister, supported by the same evidence as required by the Ordinance. The registrar shall on receipt of the declaration and the evidence enter the name of the person entitled under the transmission in the register book as the mortgagee of the ship or share.
Fees
Initial Registration
Scale Fee
Vessels up to 50 tons gross RM 10.00
Vessels over 50 to 100 tons RM 15.00
Vessels over 100 to 200 tons RM 20.00
Every additional 100 tons or fraction of 100 RM 5.00
Annual Tonnage Fees
An annual tonnage fee of RM 0.30 per gross tonnage shall be paid by the owner of a ship at the time of the initial registration or renewal of registration of the ship and thereafter annually on or before the anniversary date of the initial registration or renewal of registration, as the case may be.
Transfer and Mortgage
On transfer, transmission, registry a new, transfer of registry, mortgage and transfer of mortgage:
According to the gross tonnage represented by the ships or shares of ships transferred etc.
Scale Fee
Under 10 tons RM 1.00
10 tons and under 20 ton RM 2.00
20 tons and under 30 tons RM 4.00
30 tons and under 40 tons RM 5.00
40 tons and under 50 tons RM 6.00
50 tons and under 75 tons RM 7.00
75 tons and under 100 tons RM 9.00
100 tons and under 125 tons RM 10.00
Every additional 50 tons, or part of 50 tons RM 1.00
Incorporation of Companies
The registration fee, which is in addition to document filing fee, depends on the amount of authorized share capital of the proposed company.
Scale Fee
Under 10 tons RM 1.00
10 tons and under 20 ton RM 2.00
20 tons and under 30 tons RM 4.00
30 tons and under 40 tons RM 5.00
40 tons and under 50 tons RM 6.00
50 tons and under 75 tons RM 7.00
75 tons and under 100 tons RM 9.00
100 tons and under 125 tons RM 10.00
Every additional 50 tons, or part of 50 tons RM 1.00
Certificate of Survey (COS)
The following fees are charged for the issuance of a Certificate of Survey:
Item Fee
Issuance of Certificate of Survey RM 100.00
Inspection of the carving and marking RM 30.00
Any other charges incurred directly by the Surveyor of Ships on inspection of the vessel if the inspection is conducted outside Malaysia RM 230.00 per day or part of the day
The fees charged are as per The Merchant Shipping (Surveyors of Ships and Radio Surveyors) (Fees) 1960 Rules in force.
Contact
Ministry of Transport Malaysia
No. 26, Tun Hussein Road,
Precinct 4,
62100 Putrajaya, Malaysia.
Tel: 03-8000 8000
Fax: 03-8888 0158
Website: www.mot.gov.my
Minister of Transport: YB. Loke Siew Fook
MARINE DEPARTMENT MALAYSIA
Ibu Pejabat Laut,
Peti Surat 12,
Jalan Limbungan,42007,
Pelabuhan Klang, Selangor. Malaaysia
Azham Bin Abd Razak
603-3346 7620 / 7766/ 7777
603-3168 5289
khidmatpelanggan@marine.gov.my
Webpage: http://www.marine.gov.my
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 Malaysia
IMO Convention 48 x
SOLAS Convention 74 x
SOLAS Protocol 78 x
SOLAS Protocol 88 x
SOLAS Agreement 96
LOAD LINES Convention 66 x
LOAD LINES Protocol 88 x
TONNAGE Convention 69 x
COLREG Convention 72 x
CSC Convention 72
CSC amendments 93
SFV Protocol 93
Cape Town Agreement 2012
STCW Convention 78 x
STCW-F Convention 95
SAR Convention 79
STP Agreement 71
Space STP Protocol 73
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
London Convention Protocol 96
INTERVENTION Convention 69
INTERVENTION Protocol 73
CLC Convention 69 d
CLC Protocol 76
CLC Protocol 92 x
FUND Protocol 76
FUND Protocol 92 x
FUND Protocol 2003
NUCLEAR Convention 71
PAL Convention 74
PAL Protocol 76
PAL Protocol 90
PAL Protocol 02
LLMC Convention 76
LLMC Protocol 96 x
SUA Convention 88
SUA Protocol 88
SUA Convention 2005
SUA Protocol 2005
SALVAGE Convention 89
OPRC Convention 90 x
HNS Convention 96
HNS PROT 2010
OPRC/HNS 2000 x
BUNKERS CONVENTION 01 x
ANTI FOULING 2001 x
BALLASTWATER 2004 x
NAIROBI WRC 2007 x
HONG KONG CONVENTION
x= ratification
d=denunciation