Hong Kong’s big attraction for shipowners

Ms Maisie Cheng, Director of Marine presents Outstanding Performance Award in Port State Control Inspection to Anglo-Eastern Ship Management Ltd. (Marcel Liedts COO)

From small beginnings in 1990, the Hong Kong Shipping Register is now the largest national register in the world

In 1987, The Hong Kong Government (at that time under British rule) appointed a Steering Committee to advise the Government on the establishment of an independent shipping registry. The Merchant Shipping (Registration) Ordinance (Cap 415), which came into effect on 3 December 1990. Until then, the United Kingdom Merchant Shipping Acts applied to registration of ships and to mortgages of ships in Hong Kong. A ship registered at the Port of Hong Kong was, therefore, a British ship.

1997: Registered tonnage on the Hong Kong Ship Register 5.65m GT

By 1997, when the sovereignty of Hong Kong was handed back to China, the British Hong Kong Register boasted a modest 5.65m GT registered. At this point Section VIII of Annex I to the Sino-British Joint Declaration of the transfer of sovereignty came into affect allowing Hong Kong to continue to maintain register under its own legislation in the name of “Hong Kong, China”. The change unleashed massive pent up demand from Mainland Chinese shipping operators who sought to enjoy the advantages of registering their ships in Hong Kong in the same way local and other international shipowners had been enjoying.

The factors that have lured Chinese owners and others since 1997, include:

Hong Kong has one of the lowest tax regimes in the world and imposes no profits tax on overseas trade;

double taxation relief arrangements are in place with 42 trade partners. Hong Kong-registered ships also enjoy preferential taxation arrangement and a 30% reduction in dues in Chinese ports;

the HKSR operates with a simple fee structure and the costs for ship registration are low;

there is no nationality restriction on manning;

Hong Kong boasts a wealth of excellent ship management, financial, communication, legal and other supporting facilities, as well as an independent and well-established legal system; and

Hong Kong-registered ships can obtain assistance from the Chinese embassies and consulates of the People’s Republic of China worldwide.

An independent and well-established legal system

Low tax regime and a world-class financial centre

Over the past 20 years, the Hong Kong Register has built upon the advantages it had inherited through its location, with the introduction of a raft an array of measures to enhance the quality services it provides.

As early as 1999, the HKSAR Government simplified the relevant fee structure, reduced the ship registration fees and streamlined the registration procedures with a view to making the HKSR more attractive and user-friendly. It also implemented the Flag State Quality Control system, which has since ensured the quality of Hong Kong-registered ships.

In 2002, the registration procedures were further improved with the introduction of the one-stop-shop service to handle all registration-related matters, ranging from applications for maritime radio communication station licence to the issue of minimum safe manning certificates.

2007: Registered tonnage on the Hong Kong Ship Register 35.79m GT

Later in 2008, the HKSR introduced the Electronic Business System (also known as “eBS”), which provides prompt services to shipowners requesting transcripts of the Certificate of Registry.

To keep pace with technological advances and the development of e-service in the maritime industry, the HKSR has also developed an authenticity checking system for certain certificates issued by the Marine Department (e.g. Bunker Certificate and seafarers’ certificates/licences).

As the next step in the evolution of the HKSR’s service, the aforementioned checking service will be extended to cover the Certificate of Registry issued by the HKSR in the near future.

The HKSR is rightly proud of the services it offers to shipowners. And it is equally reasonable for the HKSR to be highly satisfied with the quality of the ships entered in the register. In the context of its port state control role, the “White List” features quality flags which consistently perform well in terms of ship detention records. The HKSR takes pride in the fact that it has achieved the “White List” status in both Tokyo MoU and Paris MoU since 2002.

Ships registered into the HKSR enjoy low detention rate in ports and are among the best performers in the world, with a Port State Control detention rate of 0.81% against a world average of 3.13% in 2016.

As the HKSR is a national flag and not a flag of convenience, it never goes out in a search for new business. But bearing in mind Hong Kong’s position as an international maritime centre, the HKSAR Government will ensure that the strengths of the HKSR are sufficiently conveyed to the trade through suitable channels, so that shipowners and operators may make informed decisions having regard to the consistent and quality service provided by the HKSR.

The Maritime and Port Board was set up in April 2016 to advise the Government on strategies and measures to further develop Hong Kong’s maritime and port businesses. One of its committees is Promotion and External Relations Committee, which maps out strategies, plans and programmes to promote and publicize Hong Kong’s shipping and port services, including HKSR services. Since its establishment in April 2016, it has sent promotion delegations to Mainland cities, the UK, Germany, Greece and Japan.

July 2017: Registered tonnage on the Hong Kong Ship Register 111.00m GT

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