Everyone who buys or builds a yacht sooner or later are thinking about the registration and obtaining the right to property of vessel.
Registration of yacht or another type of vessels, gives the right to navigate under the flag of the State in which the boat is registered, as well as the property right over it, which means that it must be registered in the Register of Shipping of some concrete state. At the same time it must be remembered that from the moment registration of ship, in some concrete country, on board of the vessel acting law of this state, including the international principle of extraterritoriality.
And here arises the main question, – the flag of which country is better for your vessel?
According to the international classification, all state Ship registers are divided on the so-called “open” and “national” or “closed” registries.
“National or closed” registries – are the State Registers of Ships in which may be registered vessels that belonging to only the residents of this country (individuals or juridical entities).
“Open” registries – are the State Registers of Ships in which may be registered vessels owned by foreign individuals or juridical entities.
Thus, if the vessel owner is not satisfied, of some reason by the flag of its country of residence, he can choose for his vessel any “Open” flag.
And then, the procedure of choosing of a specific “open” flag should be based on several major criteria, such as:
1. the cost of vessel’s registration under the flag;
2. cost of vessel’s maintenance under the chosen flag;
3. the cost of all commercial transactions fulfillment with the vessel, such as the mortgage registration, the transfer of property rights, etc.;
4. minimum requirements for the technical condition and documents of the ship;
5. terms of execution of all necessary documents,
In some cases, besides the above principles should be takes into account the foreign relationships of the chosen country with the world community, and if more specifically, we should pay attention to the absence of conflicts of this country with other States in whose ports probably would enter vessel. Usually, we must pay attention to small countries that have the status of neutrality or the countries that in general don’t have access to the sea.
Flags (State Ship Registers) of countries, much as possible corresponding at the same time to all of these criteria in the international maritime practice, are called “flags of convenience “.
Based on the above principles and taking into account that:
• all vessels owned by individuals or legal entities, whether resident or non-resident can be registered in Republic of Moldova;
• all owners and charterers of vessels registered in Moldova are exempt of tax payments and customs duty;
• there are no restrictions on registration of sea, river and sea-river vessels of all ages and types;
• favorable tariffs for the registration of ships;
• quick registration procedure,
• the neutral status of Moldova,
The flag of the Republic of Moldova can be, no doubt, called “convenient” for the registration of any vessel.
Author: Viorel Furtuna
The above is intended to provide a brief guide only. It is essential that appropriate professional advice is obtained. Our office will be glad to assist you in this respect. Please do not hesitate to contact us.