Wednesday, July 1, 2009

FISCAL REGIMES TO PROMOTE FLEET DEVELOPMENT

Norwegian Kommandittselskap (“KS”) Scheme

Securitization of debt

Securitization of debt is a financing scheme which facilitates the acquisititon of funds from individual investors who in turn enjoy tax concessions relating to personal and corporate tax.

Funds are collected from individual investors (partners) through the formulation of a consortia (limited partnership.) Once the consortia purchases the vessels it is leased or chartered to prospective shipowners/operators.

The scheme which was first designed in Norway is referred to as K/S (Kommanditt -selskap). Each consortia partner need only contribute a small amount of capital while the tax benefits would be substantial.

German Kommanditgesellchaft (“KG”) Scheme

A similar type of scheme has also been in operation in Germany and its structure is illustrated below. The KG scheme as it is known has been utilized to acquire new full container vessels from Korean shipyards and has been reputed to be a successful portfolio investment.

Read more here.

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