Luxembourg is uniquely positioned to meet the needs of shipowners and shipping investors
A reliable legal framework for perfecting and enforcing vessel securities makes Luxembourg a trustworthy jurisdiction in which to register internationally-mobile vessel assets.
Diligent regulatory compliance monitoring by the Luxembourg flag helps mitigate operational disruptions that may negatively impact vessel profitability and residual value. A clean performance record can notably help extend a vessel’s commercial life and protect its resale value.
Luxembourg is a preferred jurisdiction for institutional and private investors, including private equity and hedge funds. It provides shipowners access to both international capital markets and innovative investment products to finance fleet renewal and expansion.
Luxembourg is a quality white-listed flag committed to high safety, security, environmental and crew welfare standards. Its global network of 400+ flag state inspectors in major ports around the world perform flag state inspections to monitor on-board regulatory compliance.
Luxembourg’s modern fleet boasts one of the lowest detention rates and deficiency ratios among EU Member States. Luxembourg vessels are considered “Low Risk” by the Paris MoU and benefits from lower ship inspection priority and higher inspection intervals. This mitigates the risk of important financial and commercial consequences which vessel detentions and serious deficiencies can occasion.
Luxembourg is a politically stable jurisdiction with an international focus. The Luxembourg government is efficient and responsive with a proven track-record of promoting business-friendly policies to attract foreign investment.
Responsible fiscal policies and strong macroeconomic climate have earned Luxembourg a triple A rating from the major credit rating agencies.
Luxembourg vessel registration affords EU shipowners the ability to maintain or increase their EU flag share in accordance with the objectives of the European Commission’s Community Guidelines on State Aid to Maritime Transport without sacrificing efficient regulatory vessel oversight.
Luxembourg is also the flag of choice for owners seeking to satisfy charterer and creditor demands for an EU flag and those with vessels involved in intra-Community trade.
Luxembourg is committed to a legislative framework established upon European and international standards.
This pragmatic regulatory approach avoids additional compliance costs and safeguards global competitiveness.
Home to leading funds and over 140 international banks, Luxembourg is a known and trusted jurisdiction for investors. A reliable public register and robust legal framework for perfecting and enforcing securities provide strong creditor protection. Luxembourg also recognizes the use of security trustees, fleet mortgages and private sales.
Luxembourg boasts one of the world’s youngest fleets. The low average fleet age reflects creditor confidence in Luxembourg as a trustworthy jurisdiction in which to register valuable new tonnage. It also contributes to Luxembourg’s “Low Risk” PSC inspection priority in major MoUs.
Luxembourg’s predictable tax regime is one of the most competitive within Europe. Luxembourg accredited shipping companies can benefit from attractive investment tax credits when acquiring vessels operating in international maritime traffic.
Luxembourg has concluded over 80 double taxation treaties with another 16 currently under negotiation.
Access to international capital markets is essential to fleet renewal and expansion driven by market and regulatory demands. Luxembourg has established itself as the premier financial center in Europe through its pragmatic, business-friendly transposition of relevant European and international regulations.
Ranked as the second largest global fund center, Luxembourg is a preferred jurisdiction for institutional and private investors, including hedge funds and private equity investors which play an increasingly prominent role in ship finance.
Its modern regulatory framework promotes the design, development, administration and cross-border distribution of innovative investment products and strategies with strong investor protections adaptable to ship finance. Luxembourg is also a leading domicile for Environmental, Social and Governance funds as well as Sharia-compliant funds.
Given the increasing role of Chinese actors in ship finance, Luxembourg’s privileged access to Chinese capital markets represents an attractive draw for shipowners looking to diversify and expand their investor base.
Luxembourg serves as an entry point for Chinese actors looking to invest and issue bonds abroad, particularly within the Eurozone, and foreign actors looking to do business in China. Luxembourg continues to play a key role in facilitating the global expansion of the offshore RMB market, increasing RMB liquidity internationally and promoting its acceptance as a trade and settlement currency.
Using RMB as a trade finance currency can be useful for shipowners seeking to mitigate currency risks of foreign exchange transactions and reducing payment processing delays.
Luxembourg is the European leader in cross-border insurance and captive re-insurance, serving as a centre for distribution of insurance products to the European and international market. Over 100 international insurance companies and 250 reinsurance companies are domiciled in Luxembourg, including prominent maritime insurance mutuals.
All Luxembourg marine insurance contracts are subject to fiscal neutrality. The applicable fiscal regime is in principle the state in which the subscriber and beneficiaries reside.