There are various reasons why it might make sense for an owner or manager to run certain accounting operations from an offshore jurisdiction.

Tax
For crewmembers of certain nationalities that spend time predominantly outside their taxable residence, it often makes sense for their pay to emanate from outside their jurisdiction of residence.  This would constitute foreign source income in respect of the home country and, in many countries, foreign source income paid to nationals who are living outside the territory beyond a certain threshold is either not subject to tax or subject to beneficial tax exclusions. 

If, for example, a vessel is registered in the Cayman Islands, and owned by a Cayman company, then it is perfectly reasonable for crew to be paid from the Cayman Company.  Of course, it would somewhat defeat the object if the paying country itself imposed taxes or levies such as national insurance, pension or other contributions, either unilaterally or under the provisions of a tax treaty with the home country.  The Cayman Islands does not have such provisions and is thus a good candidate.  This leaves each crewmember free to establish and continue to contribute to his or her own health and pension plans.

In turn, this can assist owners seeking to offer good terms to attract and retain preferred crew.

Crewmembers who are residents of the EU and certain other countries should be aware that there are reporting requirements in respect of interest or earnings on overseas accounts.

Privacy
For some owners, it is very important to establish privacy and this objective creates a privacy impact on all links in the chain of owning and operating a ship or yacht, particularly the financial links.  In the Cayman Islands, privacy is protected by law.  This makes it possible to create a measure of disconnection to help protect privacy.

Flexibility
Getting pay to the crew can sometimes be difficult.  Such difficulties can be reduced or avoided through the establishment of a crew account coupled with individual crew debit cards that limit the amount they can draw to the balance on account.  The cards can be issued with PIN numbers so as to draw cash from ATM machines in most places in the world. 

Alternatively, payments can be transferred to crew employment companies for onward distribution.

Some crew are employed through special purpose companies that hold reserves and make limited payments into credit and debit card accounts for various protective reasons.  Sometimes, individual crew members set up these companies to employ one or more of themselves.  It is then the Company that contracts with the owner to supply crewing services rather than a direct contract. 

From an owner’s perspective, this can be a good thing since, in the event of an incident such as a collision, the crew member can be kept “onside” rather than being forced to become an adversary under the adversarial legal system. 

Services
We can do as much or as little as an owner or manager may require.  Typical services include:

1. Crew pay and accounting.
2. Assisting with crew bank accounts together with credit/debit cards.
3. Forming companies for crew employment and pay.
4. Crew investment.
5. Project accounting.
6. Operating accounting.

Amongst our staff, we have a qualified banker, accountant and trust officers so are well equipped to transact such services.

There is no VAT, GST or other tax on services in the Cayman Islands that we have to levy and account for.  This, coupled with the exchange rate, makes us very competitive, particularly for owners based in such taxable jurisdictions such as Europe Canada, Australia and New Zealand.

For more information, Contact Us.