Activities of the shipping fund registered by Cyprus Securities and Exchange Commission (CySEC), demonstrates growing profitability of the entire company (ship owner) driven primarily by two factors contributing to reduction of expenses. It is a preferential taxation in the segment of shipping and absence of capital gains tax and dividend tax, Natalia Sakharova, representative of AGW Investment Fund RAIF VCIC Plc, said at the 3rd “LNG Fleet and LNG Bunkering in Russia”.
According to the speaker, the advantages of this financing model for ship owners is in the ability to replace bank capital with the fund resources and to unpledge ships. “That makes the jurisdiction attractive for both a ship owner and an investor and we get two-in-one – preferential taxation and control of the fund activities by a financial regulator”, she emphasized.
This model is attractive for an investor in various respects. Considerable initial investments are required even for a purchase of a single working vessel. The fund lets consolidate resources of several investors, register the share of assets held by each of them and, consequently, the share of profit to be received by them. “If the resources are sufficient for the purchase of only one vessel while the investor’s risk profile does not allow to ‘put all eggs in one basket’, membership in a shipping fund lets buy two vessels. Besides, a shipping fund licensed by a securities and exchange commission has much more chances to sign a bareboat charter allowing for acquisition of not one but two vessels for the same amount and for mitigation of risks”, explained Natalia Sakharova.
The fund’s license ensures a complete transparency of accounting, targeted use of resources and compliance with the announced risk level, which a key factor of investor’s interest protection.