Sector

 

Thanks to a strong political intent to diversify the economy and an overall favorable business climate, Luxembourg has become, over the years, an attractive and flourishing location for shipping businesses. Meanwhile, a broad range of companies active in the maritime branch have already been established.

The flag and the register – New impetus for European shipping

Combining a good reputation and a good track record with high administrative and operational standards and reasonable competitiveness, the Luxembourg flag fills a gap in the European maritime world:  this is the main reason why it was created in 1990. At that time, traditional national flags swiftly ran out of steam in favour of cheaper, less demanding non-European registries. In order to prevent ship-owners from abandoning the EU area and relocating to far-away places, some European governments supported and promoted Luxembourg’s project of creating a national shipping register. Although the initiative came as good news for the European maritime sector in all respects, for Luxembourg’s banks, insurance companies and real estate, i.e. the “flagship sectors” of the Grand-Duchy, some local doubts and reluctance had to be overcome in the beginning years. But most of the opponents changed their minds when considering all the safeguards being put in place by the Luxembourg Government and the ship-owners. From the Maritime Authority to the Minister, all persons involved are dedicated to quality shipping.

Furthermore, the Minister of the Economy and Foreign Trade issues the business licences for the shipping companies.

Revenues created by this activity go far beyond the registration fees paid by ship-owners and the overall benefits for the country are considerable in terms of job creation and wealth production.

Jobs, wealth and opportunities

Given the global character of the maritime trade and the various business lines, it is not very easy to assess the genuine value and weight of the Luxembourg maritime sector on the one hand and its exact scope on the other hand. Nevertheless, the Luxembourg Maritime Cluster started to collect data in December 2012 by questioning its members representing nearly the whole maritime activity and tallying it with available information.

It is estimated that about 1,000 jobs in Luxembourg are linked directly or indirectly to the maritime sector. Indeed the ship owners established in the Grand-Duchy provide jobs to some 400 highly-skilled employees on shore and around 4,000 at sea; and a further (approx.) 600  maritime related jobs are located in insurance companies, banks, law firms, consultancy groups and last but not least maritime logistics operators.

The number of jobs directly or indirectly linked to the sector tends to rise in Luxembourg. In the past years CLdN – Cobelfret and Jan de Nul Group, two major players of the European maritime sector, moved their headquarters to Luxembourg boosting the employment and investment figures.

Luxembourg’s favourable business climate and the customer-minded maritime authority are two good reasons for new ship-owners to relocate or for existing ones to extend their activities there.

Whether in ships or in real-estate, huge investments are made by Luxembourg ship-owners. Through a system of investment related tax incentives, ship- owners are encouraged to invest in new vessels or other fixed assets, which results in a renewal of their fleet on a regular basis thereby  making Luxembourg one of the youngest registries worldwide with an average age of ships of 6.3 years.

Luxembourg investments in new ships also sustain the European industry, i.e. the shipyards and its suppliers facing a fierce competition from Asia. The shipyards of Flensburg or Bilbao have received significant orders from Luxembourg ship-owners that preserve jobs and knowledge in Europe on one hand and strengthen Luxembourg’s position in bilateral relations on the other hand.

In the fields of telecommunications, two major Luxembourg companies - SES ASTRA and Luxspace – already supply the shipping sector with geolocation infrastructure (satellites) and services.

Business case: Establishment of a one-ship company

When operating a ship, many Luxembourg ship owners opt for the typical one-ship-company model. This basically means that they establish one society for each ship they hold.

By the establishment of a one ship-company following services providers are involved and costs incurred (estimation for a new 15000 Gross Tons vessel, approximate purchase price 50 000 000 EUR, crew: 20 seafarers):

Ship owners needs

Service provider in Luxembourg

Incurred Costs EUR

First registration of the vessel

Enregistrement – Bureau des Hypothèques

14 000 (one-of)

Registration costs after the 1st year

Enregistrement – Bureau des Hypothèques

8 000 EUR (annual)

Crew salaries withholding tax (Non-EU seafarers)

Administration des Contributions

50 000 (annual)

Crew documentation and certificates

Commissariat aux affaires maritimes

5 000 (annual)

Legal documents (Mortgage, etc.)

Notary public,  Lawyer

8 000 (one-of)

Bank costs

  • Operational
  • interest costs

Banks

 

5 500 (annual)

1 000 000 (depending on interest rate level)

Certified Shipping company

Commissariat aux affaires maritimes

1000 (one-of)

Accredited shipping management

Commissariat aux affaires maritimes

1000 (one-of)

 

Maritime Logistics

No country can afford to ignore the sea or be denied access to the high seas:  that is the spirit in which the United Nations Convention on the Law of Sea (Montego Bay, 1982) was drafted. Since 90% of the European Union’s external trade and 40% of its domestic trade go by sea, Luxembourg too promotes its maritime interests and is active in maritime logistics in order to secure its import-export trade. The logistics hub of Bettembourg operated by CFL Multimodal and the Port of Mertert are two privileged points of entry and exit by rail and river for the goods departing from or going to the ports of Rotterdam, Antwerp, Hambourg, Zeebrugge and Lübeck). The presence of ship owners in Luxembourg is a great help to foster the ties of the Grand-Duchy and its expertise within the whole European logistics network.

In conclusion,

Luxembourg’s maritime sector is an ever-growing innovative business with opportunities. It is also worth supporting its development and getting involved. Banks, insurance companies, lawyers can all benefit from an increase of maritime activities in Luxembourg. Through the Luxembourg Maritime Cluster, the sector has a dynamic network at its disposal where strategic options may be discussed in order to support the Luxembourg Government promotion efforts.

The maritime sector at a glance

State-of-the-art infrastructure at the heart of Europe

Multimodal transport infrastructures: Connect the country to the seas
At the core of major maritime decision centers
ICT pioneers

The ship register is a success story

An increasing number of ship registrations
Major flagships companies established in Luxembourg
State-of-the-art vessels
Recognized quality flag

Luxembourg maritime authority : a customer-minded one-stop shop

ISO 9001 certified
Easy access to decision makerS

Single window for maritime affairs

Technical expertise at its best

Luxembourg is committed

Willingness at the highest level to develop the Blue Economy

Integrated with the logistics sector

The maritime sector - A supported niche market

All areas of expertise accessible in Luxembourg

Marine Merchant, Dredging, Offshore Supply, Finance, Insurance, Consulting, Audit, Law, Rail and

Maritime Logistics, Counter-piracy

Five goods reasons to be part of Luxembourg

1. Business-friendly legal and regulatory framework

2. Rewarding tax environment for investors

3. Political stability

4. Peace of mind regarding your investments

5. Highly skilled and multilingual service providers


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