As a marine profit centre, the Cayman Islands are most attractive, given their infrastructure of professional services, combined with freedom from tax and exchange controls.

The shipping registry operates to a high quality standard, in line with the Islands' overall philosophy on quality services, and yet retains the maximum possible flexibility.  The perception of "red tape" often associated with the registration process in other jurisdictions may be avoided through Cayman Islands registration. 

Most of the 33 international maritime conventions applicable in the Cayman Islands were extended between 1988-1990.  At that time, there was some local debate as to whether the imposition of quality would impede the registry’s ability to attract ships.  The argument for quality prevailed and that decision has been well borne out by the ever-increasing quality standards mandated through the international maritime conventions. 

As for the ability to attract ships, during the calendar years 1998 to 2003, the registered tonnage of commercial ships grew at a compound rate of 26% per annum, or a quadrupling of registered tonnage over the six-year period.  From 2004 to date, tonnage has more or less held steady with new tonnage approximately in balance with natural attrition.  In respect of yachts, since 1996, the Cayman Islands has ranked  as the world’s number one registry for megayachts with about 15% of the world market of yachts over 30m or 100ft and more than 30% of the world market of yachts over 45m or 150ft in length.  Most of the world’s largest yachts over 60m or 200ft are Cayman registered, some in excess of 7,000 GT.  Most of these are registered or operated as commercial vessels, some of which are built to passenger ship standards.

Opting for quality has had other rewards, one of which is insurance.  Over the years, the reputation of a vessel's chosen flag has had an increasingly significant effect on insurance costs.  This has arisen partly out of the US 1990 Oil Pollution Act (triggered by the Valdez incident) and the overall plight of the insurance industry.  The net effect is that choice of flag can have as much as a 2-3% impact on a vessel's running costs.  By choosing a quality register, this cost saving alone can far outweigh most other cost considerations associated with choice of flag.  As legislation develops globally, this "quality gap" can only broaden, since underwriters rely on good surveys for their protection. 

A quality registry is also attractive to financiers since it upholds standards for maintenance and outfitting.  This, in turn, helps underpin a ship’s resale value.  If the resale value of the ship dips below the outstanding balance of the loan, then the financier becomes exposed.  Where collateral for the loan is solely the vessel itself, then a financier will always seek measures to ensure that he does not become exposed. 

The US Oil Pollution Act, 1990 and the Maritime Transportation Security Act, 2002 confer considerable powers on the US Coast Guard to intercept, inspect, restrict, turn away or arrest sub-standard vessels or vessels posing a security risk entering US territorial waters.  Ships on the less well regulated registers risk an increased possibility of costly delays and inspections when in waters patrolled by the US Coast Guard.

On the other side of the Atlantic, the EU continues to demand more regulation in its "common policy on safe seas".  It actively monitors ships that enter its ports, to collate information on sub-standard vessels, and to take appropriate action to guard its shores.

It thus becomes evident that there will continue to be ever increasing pressure on sub-standard registries, arising from worldwide ecological concerns, sanctions by the large trading blocks, maritime security issues, regulation by the IMO, regulation by the ILO [including the looming Maritime Labour Convention], resultant regulation by flag states, and pressure from port states, insurers, classification societies, unions and responsible shipowners looking for protection under a quality flag.  Although there is always more that can be done, pressure to improve quality has already had a significant effect on ship safety.  In the Caribbean region, from 1997 to 2004 the Cayman Islands acted as founding chairman of the Caribbean MOU on Port State Control, helping to inculcate standards for the region whilst trying to achieve a fairer appeals/arbitration system than was experienced by owners dealing with PSC regimes in other regions.  Thus it can be seen that, from a variety of aspects, the Cayman Islands registry is well placed to act as a leader rather than a follower of global trends. 

Ship Registration Procedure
The documentation and procedure for registering commercial ships is set out under the section: Registration Procedure.  Of course, in addition to registration there are the survey and other regulatory requirements and these will vary depending on the type of ship. 

We have registered many commercial ships in different registries and are familiar with the process.  Our normal procedure is to consult with the owner or his representative in respect of the specific ship or ships he is looking to register.  In this way, we can deal with the issues specific to the application rather than to produce myriad lists for different classes of vessel in different situations.

For more information on any specific aspect of registration, please Contact Us.