Nationals, bodies corporate or shipping entities from an EU or EEA state, including their overseas territories, qualify to own a Cayman registered vessel.  Bodies corporate and shipping entities must be established in, and maintain a place of business in, any of the above territories. 

For the avoidance of doubt, the UK and its possessions qualify.  Possessions include Crown Dependencies and UK Overseas Territories.  However, British Dominions [Australia, Canada, New Zealand etc.] and British Commonwealth states do not qualify.  The march of history thus gives rise to the curious anomaly that whilst long-time adversaries such as East Germans now qualify to own a British ship, nations spawned by and still with allegiance to the Crown do not [i.e. the British Dominions which are constitutional monarchies recognising the Queen as Head of State].  A current list of British Possessions can be supplied on request.

There are no nationality restrictions as to who can own shares in a corporation that qualifies to own.  Thus, it is the nationality of the corporation that counts, not the nationality of the underlying shareholders.

All British ships are registered with 64 shares in the ship.  A non-qualifying individual or corporate person may own up to 31 shares in a British ship provided the remaining 33 shares are in the name of a person who does qualify to own. 

Foreign Corporations
A foreign corporation registered in the Cayman Islands as a foreign company qualifies to own a Cayman registered vessel.  In cases where the owner is precluded from forming subsidiary companies outside the parent jurisdiction, perhaps as a Stock Exchange condition on a bond issue, then registration of that parent company in the Cayman Islands as a foreign company is a useful remedy.  The foreign corporation may be incorporated in any jurisdiction save those that appear from time to time on the list of countries under sanction, typically the UN list.  There must be a representative office in the Cayman Islands which, amongst other things, will be required to carry out due diligence on the foreign corporation to the same extent as if it were formed in the Cayman Islands.

EU/EEA
On January 1st 1994, a number of member countries of the European Free Trade Association (EFTA) joined with the European Union member states to form the European Economic Area (EEA).  Some of these EFTA countries later became members of the EU.  At the time of writing, the EEA comprises all EU member states plus Iceland, Liechtenstein and Norway.  The total list of EEA countries is as follows:

*Includes Gibraltar but excludes the Channel Islands, Isle of Man and all other UK overseas territories.

The EU was enlarged from 15 to 25 states on May 01, 2004 and then to 27 states with the addition of Bulgaria and Romania on January 01, 2007. 

A current list of dependencies or overseas territories of the member states can be supplied on request.

Shipping Entities
Shipping entities embrace ownership structures such as limited and general partnerships, hybrids such as the Danish parten rederai, and groupings structured on civil law such as the European Economic Interest Group (EEIG) which, in some parts of Europe, may not be formed as a limited company with legal personality separate and distinct from its members. 

Shipping Entities do not embrace trusts.  The law does not allow any trust, whether express, implied or constructive, to be registered.  However, the law does not preclude a trustee from being registered as owner.  In this way, the Registry will not be involved in any dispute over the legitimacy of an alleged trust.

Shipping Entities without a registered office in the Cayman Islands will need to have a representative person resident in the Cayman Islands who will usually be from a licensed professional financial service company.  Again, the representative person will need to carry out due diligence on the shipping entity to the same extent as if it were formed in the Cayman Islands.

Where a ship is owned by a shipping entity without distinctive legal personality, ownership of fractional parts of shares can be registered, provided the total number of shares add up to 64. 

The registered owner on the Certificate of Registry will be in the name of the shipping entity.  Entries on the Register may either be the shipping entity owning 64 shares or individual names entered as Members of the shipping entity together with their fractional interest. 

Without fractional shares, we have a problem transferring accurately a decimal based ownership interest into 64 shares or parts.  There is also the question of the nature of ownership of shares in British ships, which comprise two types. 

Co-ownership = tenants in common = several interests or undivided interests in the whole.
Joint ownership  =  joint tenants = joint interest, unity of title with no distinction of interest.

The rule of survivorship exists with joint ownership but not with co-ownership. 

The rule of survivorship is incompatible with the civil law concept of proportional ownership.

Traditionally, ownership of any share, if divided, can only be under joint ownership subject to a maximum of five joint owners.  Undivided fractional interest in shares is not traditionally allowed.

Hence, if a partnership interest, when transferring to the Cayman Islands, requires some of the shares to be divided, a partner may then own some shares outright (with undivided interest) and some shares jointly with other partners (with joint and several liability).  This may be incompatible with a typical civil law parten rederai agreement limiting liability to the extent of each member’s interest.

By introducing the possibility for undivided interest in fractions of shares (only in the case of Shipping Entities) we resolve both the liability and compatibility issues.  This arrangement also enables transfers that precisely preserve proportionate holding and therefore avoid the possibility of triggering a taxable event.