Moore Stephens: Shipping Pools – Potential Traps for the Unwary

Illustration; Image Courtesy: MOL

Pressured by difficult markets and periods of economic uncertainty, shipping companies often turn to pool arrangements, not being aware of the financial, tax and jurisdictional implications of participating in such deals.

As “shipping pools can be an attractive option,” the international accountant and shipping adviser Moore Stephens has warned ship owners and operators to check all the implications of taking part in these arrangements.

“Interest in the concept generally is increasing as a way to leverage money and maximise economies of scale. But while it might make good commercial sense for like-minded shipping interests to pool their resources to mutual advantage, traps may lie in wait for the unwary,” Michael Simms, shipping partner, said.

Simms notes, “historically, tax-friendly offshore jurisdictions have been a natural fit for many shipping pools, but the recent increased focus on general tax transparency and on proper governance and reporting procedures may serve as a catalyst for change in this regard.”

Moore Stephens has advised on a number of pool agreements during the past 12 months. There are a range of tax issues to consider when setting up, amending or joining a pool. In the case of a new pool, it will be necessary to consider the tax position of each entity within the pool structure.

Other important considerations include the terms of the pool agreement itself, the status of the pool under competition law, the effectiveness of the marketing strategy, and the way pool accounts are prepared and submitted.

“Shipping pools have clear advantages for some. But it is a challenging market, and one subject to increasingly stringent evaluation. It would be a mistake to just dive in without careful consideration,” Simms said.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Sep 2017 >>
MTWTFSS
28 29 30 31 1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 1

INMEX SMM India 2017

Combining the forces of Maritime industry’s two biggest events, the unified edition of INMEX SMM India brought together the most exclusive…

read more >

LIQUEFACTION OF BULK CARGOES SEMINAR

GET TO GRIPS WITH:
– Mechanisms behind liquefaction
– Guidelines and regulations for bulk cargoes prone to liquefaction…

read more >

Seatrade Offshore Marine & Workboats Middle East

The largest event for offshore marine and workboat sectors in the region, Seatrade Offshore Marine & Workboats Middle East will, once again, serve as a meeting point for international industry professionals to come together and do business. Our 2017 show promises a wealth of networking opportunities, high-level discussions in our conferences on important industry trends, […]

read more >

The Future-Ready Shipping Conference 2017

The Future-Ready Shipping Conference 2017 – the joint Singapore-IMO International Conference on Maritime Technology Transfer and Capacity-Building…

read more >