In this post, we share the requirements of Vessel/ Ship in Nigeria and how to register Vessel/ Ship as a Nigerian or a Foreigner. Also, the registration of foreign owned vessel under the Nigerian Cabotage Act 2003. It is also interesting to know that Aziza Nigeria, a registered compliance and business support service company will help you to complete your Vessel/ Ship and NIMASA registration.
In shipping terms, the concept of ownership has two levels. The first is ownership in the sense of title to the vessel which is individual, joint, or corporate. The second is national ownership in the context of state responsibility to ships having its national character. The first sense of ownership is acquired by purchase while the latter is acquired by registration. Therefore, “national ownership” comes only after “individual ownership” or title is perfected under contract. This article focuses on “national ownership” which is conferred by registration and the contractual processes for purchasing the vessel are not within its scope.
Foreign Owned Vessel Under the Nigerian Cabotage Act 2003
The primary objective of the Nigerian Coastal and Inland Shipping (Cabotage) Act1 (the Cabotage Act) is to restrict the use of foreign vessels in domestic coastal trade within the Nigerian coastal and inland waters and also promote indigenously built Vessels wholly owned, registered and manned by Nigerians. The Cabotage Act therefore restricts foreign participation in Nigeria’s domestic coastal trade.
There are however exceptions to this exclusion of foreigners to trade within Nigerian waters subject to the procurement of a waiver, license or exemption from the Federal Ministry of Transport (FMOT). Foreign-owned vessels can obtain a license from the Minister of Transport to qualify for registration in the Cabotage Register. In certain prescribed circumstances, vessels both foreign and Nigerian can be granted a waiver by the Minister of Transport in respect of the prohibitions contained in the Cabotage Act.
The power to grant Vessel/ Ship registration waiver in Nigeria is wholly vested to Minister of Transport. Click to read more on Vessel/ Ship Waiver.
Maritime Statutory Framework & Administrative Agency
The Merchant Shipping Act of Nigeria, 2007 is the primary legislation for the registration of ownership in ships in Nigeria and the law is administered by the Nigerian Ship Registration Office (or ‘Ship registry’) under the Nigerian Maritime Administration and Safety Agency (NIMASA), which was established under Section 28(2) of the Nigerian Maritime Administration and Safety Agency Act 2007.
Vessel Ownership Structure in Nigeria
Under the act, there are three different ways to structure the ownership of a vessel in Nigeria and they are:
- Sole Owners:An individual may be registered as the sole owner of a ship in his own name
- Joint Owners:This is where one or more persons (not exceeding 5) acquire a ship. Historically, a ship could be notionally divided into parts known as ‘shares’, and contributors to its purchase were regarded as co-owners of shares in the ship. Each interest of a co-owner was particularly recognized and registrable. However, 17(2)(b) Merchant Shipping Act in Nigeria abolished the registration of owners of the fractional parts of a share in a ship.
Instead, any number of persons not exceeding five may be registered as joint owners of a ship or of any share therein. Joint owners will be considered as constituting one person only for the purpose of registration, and they are not entitled to dispose of their fractional interest in a ship or any interest in it. In other words, a joint owner cannot sell or mortgage only his own interest. The interest must be jointly disposed of.
- Corporations: Due to the cumbersomeness of joint ownership, the most preferred option of ownership by more than one individual is corporate ownership. A corporation may be registered as owner in its corporate name and the joint owners will be made shareholders in the entity. Each shareholder may then be entitled to sell off their respective shares in the company subject to the Articles.
However, for all the forms listed above, persons seeking to be registered as owners must be persons qualified to own a registered Nigerian ship.
A ship shall not be registered in Nigeria unless the Ship is owned wholly by the following qualified persons:
(a) Nigerian citizens;
(b) Bodies corporate and partnerships established under and subject to Nigerian laws, having their principal place of business in Nigeria;
(c) Such other persons as the Minister may, by regulations prescribed.
Therefore, foreigners can only register a vessel in Nigeria by incorporating a Nigerian company holding registrable ownership of the vessel. See. Section 18 of the MSA.
Under international and municipal law, Ships are required to be registered in other to have the national character to permit their movement in territorial or international waters. Such registration significant and some of its functions include:
(a) Registration gives protection of the title to the registered owner;
(b) Registration of interests determines priorities between persons holding security interests in the vessel;
(c) Registration is a basis for determining the jurisdiction to which the vessel is subject e.g. for the purpose of payment of certain levies, taxes or liabilities (See. Article 5 of the 1958 Geneva Convention);
(d) Registration gives the ship a right to fly the national flag i.e. attributes national character to the vessel. Therefore, when in international waters, the vessel is treated as a ‘national’ of its fag state and afforded diplomatic protection by the flag state, such as naval protection, etc. This is why the process of national ownership registration is also referred to as “flag state registration”.
Requirements for Vessels Registration in Nigeria
- Formal letter of application for registration by the owner or the ship. Usually on Company’s stationery.
- Copy of Certificate of Incorporation (Where applicable).
- CTC of Memorandum and Articles of Association (Where applicable).
- CTC of Form CAC 7 (Particulars of Directors).
- CTC of CAC 2 (Allotment of Shares). Note that for a ship owning company the authorized share capital must be a minimum of N25million.
- Copy of the Company’s Current Tax Clearance Certificate.
- Copy of Bank Reference Letter.
- Duly Completed Declaration of ownership form with passport photograph attached (Ship registry form).
- Duly Completed Application for approval of ship’s name form (Ship registry form)
- Duly Completed Application for registration of ship form (Ship registry form)
- Expired Provisional Certificate of Registry (Where Applicable)
- Copy of Vessel Insurance Policy
- Copy of Certificate of Registration as a Shipping Company with NIMASA
- Copy of Class Certificate (Where applicable)
- Copy of Bill of Sale with warranty against encumbrances and liens from the seller
- Copy of Deletion Certificate (Foreign flagged vessel)
- Copy of Builders Certificate (for new builds only)
- Certificate of approved Plan specifications and drawings (for new builds only)
- Certificate of Tonnage Measurement
- Condition Survey Report
- Photographs of the now and stern of the vessel showing her name and port of registry duly marked permanently and conspicuously and the official number and registered tonnage
- Letter of Assurance (Fishing vessel).
The process and procedure for registration of ships in Nigeria transcends the texts and letters that a typical research would suggest. It is way beyond this brief note! It is always better to seek professional help and Aziza Nigeria is your reliable partner to do your business registrations and obtaining license/ permits in Nigeria