The Dream Factory of China

International cargo ships that are registered in Qianhai will be exempted from paying customs duty and value-added tax, according to a measure in an opinion paper released by the Maritime Safety Administration of the People’s Republic of China in Shenzhen on Jan. 15.

The measure exempting owners of international vessels and cargo ships registered in Qianhai from paying customs duty and value-added tax that would amount to 27 percent of the value of the vessel is aimed at attracting more international cargo ships to register in Qianhai.

Currently, customs duty and value-added tax will be levied on overseas-registered vessels when they apply to change their port of registration to Qianhai as they are regarded as imports. This has prevented many Chinese-funded ships carrying flags of convenience, foreign, Hong Kong, Macao and Taiwan-funded vessels from registering in Qianhai.

The exemption of import taxes for international vessels is one of the 24 measures on maritime services covering six categories to be implemented to facilitate Shenzhen’s drive to become a marine-centered city and to boost the development of the shipping industry in Qianhai during Shenzhen’s efforts to become a pilot demonstration area of socialism with Chinese characteristics.

Qianhai has been positioned as an important base of the global services trade and an international port hub. Previously, Qianhai has rolled out some preferential policies to encourage domestic and overseas shipping companies to have their cargo ships registered in Qianhai, as well as simplifying the registration procedures. However, there are certain restrictions in terms of eligibility, taxes and ship surveying, which have overshadowed Qianhai’s attractiveness and competitiveness to international shipping companies.

Under the new measures, drilling platforms, offshore engineering vessels and private yachts, which previously did not qualify as Qianhai International Registered Ships, are now eligible for the simplified registration procedures.

Qianhai will be authorized by the State maritime authority to gradually open the ship classification survey and statutory survey market, a practice commonly adopted by world-renowned free trade port hubs, and recognize the inspection results and certification by members of the International Classification Society.