Dual registration
In some circumstances it is possible for a shipowner to register a ship under two
flags. The ship is first registered in country A. A bare boat charter is then granted
and this is registered in country B which accepts this structure for registration
purposes. This device may be used to circumvent certain restrictive regulations in
country A, for example crewing regulations.
Company structures associated with ship registration
The use of open registers in shipping has given rise to a distinctive structure of
company organization designed to protect the ‘beneficial owner’. A typical company
structure is shown in Figure 12.3. There are four active components:
1 The beneficial owner. The ultimate controlling owner who benefits from any
profits the ship makes. He may be located in his home country or an international
centre such as Geneva or Monaco.
2 One-ship company. A company, usually incorporated in an open registry
country, set up for the sole purpose of owning a single ship. It has no other
traceable assets. This protects the other assets of the beneficial owner from
claims involving the one ship company.13
3 Holding company Holding companies are often incorporated in a favourable
tax jurisdiction for the purpose of owning and operating ships. The only assets
of this company are the shares in each one-ship company. The shares in this
company are held by the beneficial owner, which could be a company or an
individual.
4 Management company. Day-to-day management of the ships is carried out by
another company established for this purpose. Usually this company is located
in a convenient shipping centre such as London or Hong Kong.