SAUDI ARABIA Law and Practice Contributed by: Faisal Daudpota, Daudpota International (in alliance with Khalil Aljehani Law Firm)
1.5 Temporary Registration of Vessels Saudi Arabia’s Commercial Maritime Law permits the temporary registration of vessels, including bareboat charter registration for up to two years. Dual regis - tration (dual-flag flexibility) is also allowed, enabling foreign vessels chartered by Saudi entities to fly the Saudi flag while suspending their original registration, and vice versa. Key details regarding vessel registration in Saudi Ara - bia are as follows. • Temporary registration: Foreign vessels under a bareboat charter to a Saudi party can be registered temporarily. A temporary certificate can be issued for one or more voyages, or for up to six months (renewable up to two years). • Dual registration/flagging: The law permits a for - eign vessel chartered bareboat to a Saudi entity to be registered in Saudi Arabia, treating it as a Saudi vessel during the charter term. Conversely, a Saudi vessel chartered to a foreign party may suspend its Saudi registration and fly the foreign flag. • Requirements: Vessels must be registered with the Saudi maritime authority (Public Transport Author - ity) to operate within the Kingdom’s waters. • Ownership: Generally, to fly the Saudi flag, a vessel must be owned by a Saudi national or entity (at least 51% share for corporate ownership). • Temporary foreign entity registration: Foreign companies newly operating in the Kingdom may receive temporary registration for their vessels while establishing a permanent commercial regis - In Saudi Arabia, the ship ownership and mortgage registry is managed by the TGA and relevant mari - time authorities, which serve as the central, albeit not entirely open, repository for legal ownership and ves - sel encumbrances. Registration is required for legal recognition and priority of mortgages. tration, typically valid for one year. 1.6 Registration of Mortgages 1.7 Ship Ownership and Mortgages Registry While not a public, free-search database like some land registries, information can be verified by inter - ested parties through specific legal processes and official enquiries.
• the Ministry of Transport (MoT) and logistics ser - vices – often works in conjunction with TGA in the registration process. 1.4 Requirements for Ownership of Vessels Vessels registered in Saudi Arabia must generally be owned by Saudi nationals or companies with at least 51% Saudi ownership, requiring registration with the TGA. While foreign ownership is restricted, joint ven - tures or specific corporate structures may be permit - ted. Vessels under construction can be registered, as the law recognises ship construction contracts. The requirements for vessel registration in Saudi Ara - bia are as follows: • ownership – a vessel must be owned either entirely by a Saudi national or by a company where the Saudi capital share is at least 51%; • registration – all vessels must be registered with the TGA to establish identity, nationality and legal ownership; and • documentation – owners must provide documents proving ownership and the vessel’s technical specifications. Regarding foreign ownership and registration, the fol - lowing applies. • Restrictions: Full foreign ownership of a vessel is generally not permitted for registration under the Saudi flag; it requires majority Saudi ownership. • Foreign entities: While 100% foreign ownership is allowed in some sectors, it is not universal. Howev - er, foreign entities can own/operate vessels, though they may not be able to flag them as Saudi-owned, or they must operate through a locally incorporated company meeting the 51% threshold. • Bareboat charter: A foreign party may charter a vessel under a bareboat charter arrangement. Regarding vessels under construction, it is possible to register a vessel that is still under construction. The Commercial Maritime Law requires that ship construc - tion contracts be in writing.
521 CHAMBERS.COM
Powered by FlippingBook