Banking and finance

Singapore citizens and permanent residents can register ships, as can companies incorporated in Singapore that meet a minimum paid-up capital requirement. Every Singapore ship also needs a manager who lives in Singapore. A ship can be registered provisionally first, but must move to permanent registration within one year.

A mortgage over a Singapore-registered ship is made in the form prescribed under the Merchant Shipping Act 1995 and registered with the Singapore Registry of Ships. Where the owner is a company, the charge must usually also be lodged with ACRA within 30 days. Lenders normally take other security, such as assignments of insurances and earnings, alongside the mortgage.

The shipowner sells the vessel to a leasing company and charters it back, usually on a bareboat basis, paying hire over the lease term. The lessor owns the ship while the shipowner keeps operating it, often with an option or obligation to buy it back. Because the lessor holds title, the lessee should negotiate protections a borrower would not need.

A refund guarantee is usually a bank's promise to repay the buyer's pre-delivery instalments if the shipbuilding contract is cancelled and the yard does not refund them. It protects buyers who pay large sums while the ship is being built. How easily it can be called depends on its wording, so it should be reviewed as carefully as the contract itself.

Most secondhand ship sales are documented on a standard memorandum of agreement, usually the Norwegian Saleform. The buyer pays a deposit to an escrow holder, inspects the ship and its records, and the seller gives notice of readiness when the ship is ready at the delivery place. The price is paid and title passes at a closing where both sides exchange the agreed documents.

A scheme of arrangement is a court-approved compromise between a company and its creditors that binds all of them, including those who voted against it. A company planning a scheme can apply for a moratorium to hold off creditor action while it prepares. Approval normally needs a majority in number representing three-quarters in value of creditors voting in each class.