Singapore’s Maritime Port Authority has issued new incentives for Singapore-flagged ships that undertake decarbonization efforts.
The incentives include a reduction in the initial registration fees of between 20 to 100 percent for new ships registering on Singapore’s Registry of Ships as well as tax rebates on the annual tonnage tax.
Singapore’s maritime industry is vital to its economy, as the country is strategically located near the Straits of Malacca, one of the world’s busiest shipping lanes. Singapore already handles over 600 million tons of cargo annually, showcasing the importance of the country’s maritime industry and its ports to global trade.
On April 22, 2022, Singapore’s Maritime Port Authority (MPA) issued new incentives for Singapore-flagged ships under the Green Ship Program (GSP). The program offers discounts on initial registration fees (IRF) of between 20 and 100 percent for existing ships and those about to register to Singapore’s Registry of Ships (SRS).
The GSP was first commenced in 2011 and is designed to reward ship owners who voluntarily modify their vessels to exceed the environmental standards set by the International Maritime Organization (IMO). The new incentives are available from May 1, 2022, until December 31, 2024.
The MPA will provide incentives to Singapore-flagged ships that fulfill one of the following conditions:
A new ship that exceeds the IMO’s Phase 3 EEDI requirements by the 10 percent margin or more will enjoy a 50 percent reduction for the IRF. Further, the ship will enjoy a 20 percent rebate on the Annual Tonnage Tax (ATT) that is payable every year. Shipowners should refer to Annex B in the incentive for the ship size and the timeline the financial incentives will be applied.
Existing ships already on the SRS will not be eligible for the 40 percent reduction in the IRF but will be eligible for the 20 percent ATT rebate.
Finally, ships using zero-carbon fuels as their primary fuel will enjoy a 100 percent reduction in the IRF and a 100 percent rebate on the ATT.
This article was first published by AseanBriefing which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, India, and Russia. Readers may write to [email protected]
About the author
ASEAN Briefing features business news, regulatory updates and extensive data on ASEAN free trade, double tax agreements and foreign direct investment laws in the region. Covering all ASEAN members (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam)