What you need to know about ship investments
Ship projects
When you invest in a ship project you invest in one or more ships. The overall purpose of the investment is to become part of a profitable shipping company offering a good return on the capital employed.
EXPRESS SHIPPING A/S' ship projects are put up for sale as PLC’s.
The ship project can be sold to a predefined number of investors (the number of investors depends on the scale of the project). The investors can choose to pay tonnage tax instead of ordinary corporation tax. Choosing tonnage tax usually involves financial benefits. There are, however, certain requirements concerning tonnage tax that need to be taken into consideration beforehand. EXPRESS SHIPPING A/S can assist you with the establishment and administration of investment related companies.
Advantages
Ship investments are advantageous because:
- You can benefit from the tonnage tax system.
- You can expect a good return on the capital employed.
Risks
The primary risks of ship investments are:
- Decreasing freight rates.
- Incidental expenses in connection with e.g. engine failure or shipwreck.
- Increasing interest rates (can be avoided)
- Fluctuations of currency (can be avoided)
Security
EXPRESS SHIPPING A/S always focuses on projects where the rate of return on investment matches the risks involved. We always aim to:
- Sign long-term charter contracts to reduce the risk of decreasing freight rates.
- Draw up budgets that are based on years of shipping experience with similar ships.
- Take out loans in the same currency as the revenue to avoid being influenced by fluctuations in the exchange rates.
- Take out fixed-interests loans to avoid being influenced by increasing interest rates.
- Minimize other significant risks by taking out relevant insurances.
Capital requirements?
Share capital: 25 % of the total sum of the project.
- Security: Max. 20-30 % of the financing.
Time scale
We have learned by experience that a long-range time scale is of paramount importance if your ship investment is to become profitable. That is why we generally recommend at least a 5 – 10-year time scale. However, if you invest in an EXPRESS SHIPPING A/S ship project, it is always up to you and your co-investors to decide when the ship is to be realized. You and your co-investors are free to sell the ship at any time when you consider a sale to be profitable. EXPRESS SHIPPING A/S is always at your service offering our expertise and advice in close co-operation with professional shipping consultants.
Can I leave the project?
It is possible for you to sell your share anytime. However, you need to be aware that a share holders’ agreement is made to protect the investors. The share holders’ agreement specifies the terms and conditions that regulate the withdrawal of an investor.
Administration
EXPRESS SHIPPING A/S manages the administration of the company. You and your co-investors are, however, free to terminate the administration contract and assign a new administrator.
