Setting up a Maritime Company

merlion

Singapore’s importance as an international maritime center is growing in importance with the economic center of gravity shifting towards east and the resultant spike in trade volumes.Singaporehas a strategic location along the confluence of major global shipping routes and is a world leader in terms of shipping container volume.Singaporegovernment also extends very attractive incentives to draw shipping companies from around the globe to set up shop here. Major reputable international shipping groups from leading maritime countries have made Singapore their shipping hub forAsia. As a result,Singapore’s maritime sector is an important part of its economy and the cluster comprises of more than 5000 maritime establishments.

The Maritime and Port Authority of Singapore (MPA) is entrusted with the mission to develop Singapore as a premier global hub port and international maritime centre (IMC), and to advance and safeguard Singapore’s strategic maritime interests. MPA takes on the roles of Port Authority, Port Regulator, Port Planner, IMC Champion, and National Maritime Representative.

The following is a guide to the licensing & permit procedures for setting-up a shipping establishment in Singapore. This is not a comprehensive guide and readers are advised to refer to the MPA’s site at www.mpa.gov.sg for latest updates.

Registering the company

Registering the company with Accounting and Corporate Regulatory Authority of Singapore is the foremost requirement. This is a statutory prerequisite to conduct any form of business activities inSingapore. Incorporating aSingaporecompany is a simple process and can be done within the same working day if all papers are in order.

Licensing of Crafts

Licenses are needed for plying vessels or craft in the Singapore port waters, including permission for activities associated with such vessels.

Harbor Craft License

The Maritime and Port Authority (Harbour Craft) Regulations states that no vessel shall be used as a harbour craft within theport of Singapore without a harbour craft license. Harbour Crafts ply only within the Port Limits of Singapore or places within the port limit as stipulated in the craft license certificate. Every harbour craft proceeding outside Port Limits must possess a valid port clearance certificate.

Harbour craft licenses are issued by the Maritime and Port Authority ofSingapore(MPA) to vessels used for commercial purposes within the port. There are six categories of licenses issued depending on the purpose and type of craft, such as bum boat, passenger boat tug boat etc.

How to Apply for License

  1. Submit Application & Supporting documents
    An applicant is required to submit the duly completed Application Form for a Harbour/Pleasure Craft Licence (PM74), along with the originals and copies of the following supporting documents at the MPA’S One-Stop Document Centre (OSDC)
    • NRIC(s) for licensing in the name of one or more individuals
    • Instant Information Printout from the Accounting and Corporate Regulatory Authority (ACRA) for licensing in the name of a corporate body.
    • Proof of ownership – Bill of Sale, Charter Agreement, Builder’s Certificate, Hull Receipt or Invoice, etc
    • Proof of origin of vessel – Launching Permit, Import Permit, General Arrival Declaration, whichever is applicable;
    • Insurance Policy – A marine policy covering third party liabilities including wreck removal and personal/passenger injuries
    • Craft’s manning – MPA Manning license
    • Letter of approval for use of pier/landing places where applicable issued by the owner/manager of the facilities;
    • Any other documents or requirements as required by the Port Master.
  1. Inspection of the craft

Every vessel should pass a compulsory inspection of her hull, equipment and appliances for the licensing as a harbour craft. Arrange with the One-Stop Document Centre (OSDC) for the place, date and time of the inspection in person at least one week in advance. It should be noted that such inspection is to be carried out every 12 months before its license is renewed.

  1. Obtaining License

The applicant will be issued a Craft Inspection Report once the craft passes the inspection. Payment must be made towards the dues and fees, within seven days from the date of inspection. The craft license must be displayed in a conspicuous place on board at all times. The license number must be Carved-on or cut-in into the main beam of the vessel and must be legible and visible on the vessel and its portable lifesaving and firefighting appliances at all times.

Port Limit Manning License

All crew working on board a harbour craft are required to possess a valid Port Limit Manning License. There are different types of Manning Licenses.

Application for Port Limit Manning License must be made within 6 months of the passing date of examination/ COC or expiry of the manning licenses. Duly completed Port Limit Manning License application form must be submitted along with the following documents to the MPA’s One Stop Document Centre

  • Certificate of Competency or Result slip from MPA’s Maritime and Port Training Section
  • Identity Card/NRIC (for locals) and Passport (for foreigners)
  • Certificates of relevant additional courses attended
  • Work Permit /EmploymentPass(for foreigners only)
  • 1 recent passport-sized photograph
  • Existing license (for Renewals only) – To be surrendered to MPA. A police report is to be made and submitted if this is lost

Upon payment of fees the MPA will review the form and documents submitted and will issue the Port Limit Manning License.

Permit to Launch a New Vessel in the Port

Regulation 52 of the Maritime and Port Authority of Singapore (Port) Regulations states that Vessels more than 15 meters long require written permission from the Port Master before they can be launched in port.

A “Permit to Launch a New Vessel” must be obtained from the Port Master before the vessel can be launched, by submitting two copies of the completed, signed and stamped Permission to Launch a Newly Constructed Vessel into the Waters of the Port Form to MPA’s One-Stop Document Centre (OSDC). The submission must be made within 3 working days prior to the launching of vessel.

Permit to Lay-Up a Vessel in Port

A vessel, which is not under repair or not actively employed, to be laid-up in the port requires a prior written permission of the Port Master and subject to such conditions as he may impose.

The owner / agent must submit the following to MPA’s One-Stop Document Centre (OSDC):

  1. 2 copies of duly completed Permission to Lay up a Vessel in the Port form
  2. Original of valid Ship’s Registry, Safety Construction, Safety Equipment, Loadline and International Oil Pollution Prevention Certificates, or Certificate of Fitness (fit to be lay-up) issued by the recognized Classification Society, ISM Code (DOC & SMC) and ISPS Code (ISSC).
  3. Letter from local P & I Club Representative confirming that the vessel is entered with the Club and insured for Port Risks (i.e. Oil Pollution, Wreck Removal Salvage Costs);

In the absence of P & I Club coverage, the vessel must be insured for similar risks by an Insurance Company having a representative office inSingapore. A copy of the Cover Note issued by that office is to be submitted. The insured value for oil pollution risk – $450/-per GT, Wreck removal, salvage and salvage cost – $250 /- per GT of Hull value whichever is greater.

  1. 1 copy of the Crew List according to minimum manning requirement. Qualification of Officers & Crew should be as those acceptable to MPA Shipping Division orPortofRegistry.
  2. In the case of Tankers, Chemical / Bulk Carriers and Oil Barges, Original of recent “Certificate of Freedom from Flammable Goods”
  3. Original of Fire-fighting Certificates (issued by the competent Fire Authorities) held by the Officers & Crew

The “Temporary Permit to Lay-Up a Vessel in Port” is granted based on the expiry dates of the certificates submitted along with the form. An extension of the Permit must be obtained if the vessel is still inactive at the end of the expiry date. The extension is subject to renewal of the expired certificates.

Ship Registration Certificate

Registration is open to all types of ships except fishing vessels, hydrofoils and wooden vessels. Vessels can be registered under foreign flag or Singaporeflag. Some inherent benefits of registering ships under Singapore flag are discussed later in this article. The process of registering a ship with Singapore Registry of Ships (SRS) is straightforward and easy, but before registering, a vessel must satisfy the following prerequisites:

  • Generally, ships less than 17 years will be considered for registration
  • OnlySingaporecitizens, permanent residents orSingaporeincorporated companies (foreign owned or locally owned) can be registered as owners ofSingaporevessels.
  • In case of a foreign-owned company – a company incorporated inSingaporeand has more than 50% of its equity owned by foreigners- the vessel may be registered inSingaporeunder the following conditions
    • The company must have a minimum paid-up capital of S$50,000.
    • The vessel must be at least 1,600 GT and be self-propelled.
    • The Registrar may in his discretion, waive the minimum paid-up capital and gross tonnage conditions on a case-by- case basis depending on certain conditions. Owners must apply to the Registrar for such waivers.
  • In case of a locally owned company – a company incorporated in Singapore and has more than 50% of its equity owned by Singapore citizens or another locally owned company – the vessel may be registered in Singapore if the company satisfies the minimum paid-up capital requirement.
  • For tug- and barge-owning local companies and their holding companies, the paid-up capital will be pegged to 10% of the value of the first tug or barge registered or S$50,000, whichever is the lesser, subject to a minimum of S$10,000.
    • Write in to Registrar of Ships
      If the above prerequisites are met, then write in to the registrar seeking approval of vessel name and apply for an official number for the vessel and Call Sign Number/Signal Letter.
  • Submit Application form and Supporting Documents
    A Vessel maybe registered provisionally or permanently. Provisional registration is valid for a maximum period of one year with no possibility of any extension. The vessel must be transferred to the permanent register before the end of this period. The transfer will be effected when all the outstanding documents for permanent registration are submitted and there is no fee for this transfer.
  • In order to register the following must be submitted:
    Duly completed Registration Application Form
    • Appointment of Agent Form – an agent may be appointed to sign the declaration in the registration application in lieu of the individual owner or Director/Secretary the company. This form is applicable in such cases only.
    • Appointment of Manager Form – The vessel manager is responsible for the operations of the vessel, for all matters related to the crew, safety and prevention of pollution. All communication relating to the vessel will be directed to the manager
    • Supporting Documents
      • Business Profile Printout from ACRA
      • Copy of certificate of Incorporation
      • Proof of ownership – Builder’s certificate in case of new vessels or in the case of existing vessel, a copy of the Bill of Sale or the transcript of its former registry to establish ownership
      • Value of the vessel – The owner must declare the value of the vessel inSingaporedollars on the company’s letterhead if this is not reflected in other documents submitted
      • A tonnage certificate issued by the MPA’s Shipping Division or any of the classification societies authorized by the MPA.
      • Copy of the vessel’s classification certificate issued by any of the authorized classification societies
      • Other statutory compliance certificates
      • Where the vessel has, at any point in time, been registered in another country or struck off the register an evidence of cancellation of former registry.
  • Pay Fees and Receive registration
    Upon submitting the forms and supporting documents and payment of the fees as applicable, a Certificate of Registry and a Carving and Marking Note will be issued. The Carving and Marking Note has to be certified by a surveyor from the MPA’s Shipping Division or one of the authorized classification societies and returned to the Registry within 30 days of its issuance date.

Benefits of registering ships under Singapore flag

Administered by the Maritime and Port Authority of Singapore (MPA), Singapore Registry of Ships (SRS) is internationally recognised for its efficient services, high operational and pollution control standards, and good safety record. It ranks among the top ten largest registries in the world, with more than 3,000 registered vessels, totaling 43.7 million gross tons, and is the preferred choice of flag for many international ship owners. Some of the benefits of registering vessels under Singapore flag are

  • Adoption of international standards
    Singapore is a party to all the major International Maritime Organization (IMO) conventions on ship safety and marine pollution prevention.
  • Good safety record
    The SRS is on the White List of key port state control regimes, with a dedicated flag state control unit (FSCU) that actively monitors, identifies and regularly penalises any non-conforming ships in the SRS.
  • Experienced and responsible administration
    The SRS is a hands-on and efficient administration, quick to respond to the needs of the shipping community with diligence and high quality of service. With over 30 years of experience, it is recognised as a non flag of convenience (FOC) registry by both the United Nations Conference on Trade and Development (UNCTAD) and the International Transport Workers’ Federation (ITF).
  • Choice of classification societies
    Nine internationally recognized classification societies, in addition to MPA, are authorized to survey and issue tonnage, safety and pollution prevention certificates to Singapore ships
  • Flexibility on crew nationality
    As There are no restrictions on the crew’s nationality. Foreign officers and ratings may sail in Singapore ships within the capacity they are qualified to sail in. In order to maintain quality and competence, all crew must meet the standards of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) 1978. This is a definite advantage because qualified seafarers are a rare talent pool.
  • Recognition of foreign certificates of competency
    Singapore allows foreign officers and engineers who hold valid and relevant foreign certificates of competency (COC) to serve onboard Singapore ships. No prior approval is required. Owners simply need to apply for a Certificate of Endorsement (COE) for their crew who hold foreign COC.
  • Tax exemption
    Profits derived from the operation of a Singapore vessel are exempt from Singapore income tax.

Applying for surveys and certification of Singapore-registered ships

Surveys and certification of Singapore-registered ships may either be carried out by the MPA Ship Safety Department or any one of the classification societies authorized by the MPA as recognized organizations (RO). For list of RO, please refer MPA’s website.

Owners or companies of Singapore-registered ships who wish to have a radio survey carried out by a radio surveyor appointed by the MPA should apply directly with any of them. MPA will review the radio survey report submitted by the radio surveyor before issuing or endorsing the Cargo Ship Safety Radio Certificate. For a list of appointed radio surveyors, please visit MPA’s website.

Manning Requirement for Singapore- Registered Ships

Owners and masters of Singaporeregistered ships have to meet certain manning requirements.

There are no restrictions on the crew’s nationality. Foreign officers and ratings may sail inSingaporeships, within the capacity they are qualified to sail in.

Singaporeships need to be manned by a minimum number of qualified officers in accordance with the scales stated under the Merchant Shipping (Training, Certification And Manning) Regulations 1998 .The key requirements include:

  • At least three certificated deck officers (master, chief officer and second officer) are required for ships above 3,000 GT.
  • At least three certified engineers (chief engineer, second engineer and other engineer) are required for ships above 3,000 kW.
  • There is no minimum number for ratings. The ship-owner or ship-manager should propose to the Shipping Division of the MPA such number which will be subjected to approval.

AllSingaporeships need to be safely manned and hold a Safe Manning Document (SMD) issued according to the SOLAS Convention and the principle contained in the IMO Resolution A.890 (21). Application for the SMD should be made to the Shipping Division of the MPA.

As regards qualification of officers, MPA recognizes foreign Certificates of Competency (CoC).The CoC must be issued by an administration whose certificates are recognized by MPA. An officer who holds a foreign CoC needs to be issued a COE by MPA to serve on aSingaporeregistered ship. The COE is strictly issued to officers holding a CoC from countries that have signed agreements with the MPA. A COE is valid for five years from the date of issue. The COE will not be valid once the applicant’s CoC expires. Ratings do not require COE.

Port Clearance Certificate

For Departing Vessels

  • An owner, agent or master must make a declaration before the vessel’s departure from Singapore and obtain a Port Clearance Certificate from the Maritime and Port Authority. For this purpose, two copies of the completed General Declaration Form must be submitted to the MPA’s One Stop Document Centre with the supporting documents. MPA accepts certified true copies of the supporting documents endorsed by the proper issuing Authorities in the absence of the originals.
  • Upon proper review of the documents submitted and manning inspection of the vessel, MPA issues Port Clearance Certificates to vessels that have met the requirements above and paid the port dues. The agent should ensure receipt of all the vessel’s documents before leaving the counter at OSDC.
  • A vessel must leave the port within 48 hours or a shorter period specified by the Port Master after obtaining the port clearance. An agent must return the Port Clearance Certificate to the Port Master within 6 hours after the departure period if the vessel failed to depart during the departure period.

For Arriving Vessels

The owner, agent, master or person-in-charge of Single Hulled Tankers (SHTs) arriving in Singapore must make a pre-arrival declaration before the arrival of the vessels into Singapore port. The owner, agent, master or person-in-charge of these vessels must notify the Port Master in the prescribed format to the Port Master by fax or telex.

  • at least 12 hours prior to the vessels’ arrival inSingapore;
  • once the vessel departs if they come from a nearby port with less than 12 hours steaming time toSingapore; or
  • at least 24 hours in advance if they carry hazardous and noxious substances in bulk

An owner, agent or master must declare the arrival of their vessel within 24 hours upon arrival inSingaporeand the following must be submitted to the MPA’s One Stop Document Centre along with two copies of General Declaration Form

  • Original Port Clearance of last port of call,
  • Certificate of Insurance in respect of Civil Liability for Oil Pollution Damage (if applicable) and
  • IMO Certificate of Fitness for LNG/LPG and vessels carrying dangerous chemicals in bulk

OSDC will allot a GDV Number (General Declaration of Vessel Number) on receipt of the required documents, and stamp the GDV Number on all copies of the General Declaration. The OSDC will retain the original copy of the General Declaration for arrival of vessel and return a copy of it to the shipping agent.

Note: The shipping community may choose to carry out port clearance formalities for vessels at the offices of shipping agencies by using the Electronic Port Clearance (EPC) via Marinet. EPC users can apply and obtain port clearance for vessels when they undertake and declare that their vessels are properly crewed, and possess the valid certificates and documents. EPC users need not present the original certificates for inspection at the OSDC unless there is a change in last recorded data.

Supporting Documents for Port Clearance

  • Certificate of Registry;
  • Load Line Certificate;
  • Passenger Ship Safety Certificate (for passenger vessel only);
  • Cargo Ship Safety Construction Certificate;
  • Cargo Ship Safety Equipment Certificate;
  • Cargo Ship Safety Radio Certificate;
  • Certificate of Insurance or other Financial Security in respect of Civil Liability for Oil Pollution Damage (CLC 92). This applies to a vessel carrying in bulk a cargo of more than 2,000 tonnes of persistent oil;
  • Certificate of Fitness issued pursuant to IMO Codes on vessels carrying liquid bulk dangerous substances (including liquefied gases);
  • Crew List (in duplicate);
  • Passenger List, if applicable (in duplicate);
  • International Oil Pollution Prevention (IOPP) Certificate with approved Shipboard Oil Pollution Emergency Plan (SOPEP) and if applicable, compliance with Regulation 13G and 13H of Annex I to MARPOL 73/78;
  • International Tonnage Certificate (ITC69);
  • Certificate of Insurance for passenger vessel;
  • International Safety Management (ISM) Code with approved Document of Compliance (DOC) and Safety Management Certificate (SMC);
  • International Ship Security Certificate;
  • International Air Pollution Prevention Certificate;
  • International Sewage Pollution Prevention Certificate
  • Bunker Convention Certificate

Incentives for Shipping Companies in Singapore

MPA has in place a growing number of incentives and initiatives to help both new and existing players develop their business inSingapore.

Maritime Sector Incentive – Approved International Shipping Enterprise (MSI-AIS) Award - seeks to encourage international ship owners and ship operators to establish their commercial shipping operations inSingapore. Companies qualifying under the scheme will enjoy tax exemption on qualifying shipping income for either:

  • a 10-year renewable period; or
  • a 5-year non-renewable period, with the option of graduating to the 10-year renewable award at the end of the 5-year period

Maritime Sector Incentive – Maritime Leasing (MSI-ML) Award

Encourages entities to use Singaporeas their capital and funding base to finance their vessels or sea containers. Under this scheme Ship or container leasing companies, funds, business trusts or partnerships will get to enjoy tax concessions for up to 5 years on their qualifying leasing income. Also an approved manager of the asset-owning entity will be awarded a concessionary tax rate of 10% on its qualifying management income.

Maritime Sector Incentive – Shipping-Related Support Services (MSI-SSS) Award

Promotes the growth of ancillary shipping service providers and to encourage shipping conglomerates to set up their corporate services functions in Singapore. Qualifying company will enjoy a concessionary tax rate of 10%, for a period of 5 years, on the incremental income derived from the provision of the following qualifying approved shipping-related support services:-

  • Ship broking
  • Forward freight agreement (FFA) trading
  • Ship management
  • Ship agency
  • Freight forwarding and logistics services and
  • Corporate services rendered to qualifying approved related parties who are carrying on business of shipping – related activities

Withholding tax exemption

Qualifying entities which obtain qualifying loans from foreign lenders are exempted from withholding tax on interests.

In addition to the above, the Maritime Cluster Fund (MCF) facilitates the growth ofSingapore’s maritime cluster by supporting the industry’s manpower and business development efforts.

Concession for Vessels on Maiden Voyage Calls

Vessels on their maiden voyage, calling in Singapore, are eligible for a concession in port dues. 50% one time reduction in rates shall be granted for the maiden voyage call of vessels of 75 GT or more. In order to qualify the vessel should be less than 3 years of age and should be calling inSingapore for the first time.