An important form of shipping finance directly
related to a specific country is the German limited
partnership, commonly known by its acronym KG
(Kommanditgesellschaft). In the 1970’s, the KG model
was established in Germany to raise private equity as a
form of financing for projects. KG funds are tax-driven
structures in the form of a German limited partnership
that acquires funds from private investors participating
in single-purpose companies and leveraged by bank
loans. The KG structure is exempted from corporate
tax and thus considered to be a cheaper source of
financing than banks.