Luxembourg as a platform for shipping investment - An ocean of opportunities | Brochure
Being ranked amongst the strongest financial centres in the world, Luxembourg has something to offer most to investors. For shipping investors in particular, the Luxembourg shipping regime has evolved and become a strong niche market since its origins in 1990 and the issuance of the Maritime Act.
Further to the Maritime Act of 1990 as amended in 1994, vessels with a tonnage of at least 25 tons used or intended for use in the transport by sea of persons or things for any gainful seafaring activity may be entered into the Luxembourg Shipping Register.
The Luxembourg Shipping Register offers three types of registration provided by the Maritime Act: full registration, bareboat in registration and bareboat out registration. Generally vessels exceeding 15 years of age from the date when the keel was laid may not be registered in Luxembourg, however an exception applies to vessels that have been subject to major transformations.
The maritime services in Luxembourg are governed by the Commission for Maritime Affairs (Commissariat aux Affaires Maritimes, CAM), which is in charge of the guidance and correct application of the Maritime Act as amended. The Public Shipping Register, a register which today encompasses over 200 registered vessels, also falls under the surveillance of the CAM.
Today the Luxembourg shipping regime should be considered as providing a compelling reason and attractive option to establish shipping business in Luxembourg through the manner in which it is respecting high technical standards and is striking a unique balance between regulation and flexibility.
The prosperous development of the Luxembourg shipping regime is also due to the work of the Luxembourg Maritime Cluster, an industry association formed by shipping actors, auditors, lawyers as well as other economic players, ensuring a constant development of the Luxembourg shipping regime.
One of the most interesting advantages of the shipping regime is indeed its efficient tax regime. Luxembourg does not apply a tonnage tax regime which is of significant importance in these times of economic instability. Luxembourg shipping companies fall under the general tax laws relevant to resident companies and have the possibility to apply for a tax credit on investment in respect of assets operated on Luxembourg territory. This investment tax credit may reduce the Luxembourg taxation to nil.
Through the budgetary law of 23 December 2005, this tax credit has been extended to shipping companies and is available for investments in both new and previously used ships. As the tax law is applicable based on activity, this enables the same application for accredited shipping companies both with vessels flying the Luxembourg flag and also with vessels flying a different flag.
This brochure is focused on tax aspects linked to shipping activities complemented by an overview of the general tax regime applicable to Luxembourg resident companies of international groups. The aim of the brochure is to provide firstly a summary of the main aspects of the Luxembourg shipping tax regime and secondly an insight in the various possibilities offered in Luxembourg to efficiently combine maritime activities with other activities performed by international groups with an interest to establish in Luxembourg.
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