Portugal in bid to boost its register
HONGKONG shipowners will find Portugal's new Madeira international shipping register (MAR) attractive after it undergoes some legislative amendments by June, says a Madeira Development Co spokesman.
Mr Jorge Veiga Franca, executive senior manager of the Madeira Development Co, said the legal amendments, which had been agreed in principle by the Portuguese government, had to be endorsed by the Council of Minister before they were published.
''The amendments deal with four main issues of nature and purpose of entities that are able to register ships in MAR, citizenship requirements for crew, social security and mortgage laws,'' he said.
Besides MAR, Portugal is also promoting Madeira island as a new international business centre, a fast developing free-trade zone and an up-and-coming offshore financial centre and international services centre.
Mr Franca admitted that MAR was not the best shipping register, but it would be one of the best in the European Community after June.
The changes to the present mortgage laws, which were not considered favourable to bankers in case of shipping lines facing bankruptcies, would be the most attractive to shipowners, he said.
Mr Franca said the proposed legal amendment provided that the mortgagor and mortgagee could choose the legal system of a particular country to govern the terms of the mortgage.
This could be set down in a written agreement and registered under MAR to protect the bankers, he said.
Only in cases when such an agreement was not reached would Portuguese law be applicable to the mortgages, he added.
Mr Franca said all tax incentives applicable within the legal framework of the Madeira Free Trade Zone would be extended to shipowners registered in the MAR.
The incentives include: Exemption until 2011 from corporate income taxes and municipal property taxes on the income from operations in the centre.
A complete exemption from withholding and income taxes on dividends, interest on shareholders' loans and any type of income received by the investors from these companies.
Exemption from transfer tax, gift and inheritance tax for all transfers of shares or other forms of participation in the capital of the companies operating exclusively in the centre, and on the acquisition of real estate for the purpose of setting up inthe centre.
Exemption from rates and local taxes.
Exemption from the obligation to withhold tax from interest on loans from foreign banks and on bonds issued by the companies provided the funds borrowed in both cases were used exclusively for investment or to finance opportunities in the centre.
No exchange controls.
Mr Franca said another area of the register which would be amended was the citizenship requirements.
According to existing legislation, the captain and 50 per cent of the crew of each registered ship must be Portuguese citizens, but, judged on a case by case basis, this situation could be eliminated by the decision of Portuguese shipping authorities.
The law would be amended in order that citizenship requirements would be that the captain and 50 per cent of the crew be citizens of any of the member countries of the European Community, he said.
Crew members of any ships registered in MAR would be considered as non-residents in Portugal but would be licensed to operate within the framework of the Madeira Free Trade Zone, he added.
