FAS in General
The Faroe Islands is a modern society with a stable and liberalised economy. The Faroese flag, Merkið, is internationally recognised and incorporates the cross like the other Scandinavian flags.
The Faroese International Register of Shipping (FAS) was established in 1992 and has proven to be an excellent alternative to other similar international registers. FAS aims to be a quality register. It offers a number of financial advantages and, due to its simple organisation, it is administratively uncomplicated and practical.
Legislation
The most significant IMO/ILO conventions are in force in the Faroe Islands, including SOLAS 74; COLREG; STCW 78 as amended in 1995; MARPOL 73/78; Prevention of Occupational Accidents to Seafarers, 1970; and Minimum Standards in Merchant Ships, 1976.
Technical Issues
Ships registered in FAS shall comply with all regulations stupulated in the internationals codes and conventions. The Faroese Maritime Authority does not impose any additional national requirements beyond the requirements of the IMO/ILO conventions.
Ownership
The owner of a vessel registered in FAS must be Faroese. Limited companies and other corporate entities registered in the Faroese Company Registry are considered to be Faroese owners. There is no limit on the share of foreign capital in a company registered in the Faroe Islands.
The most common company forms implemented by the Faroese business community are P/F and SP/F. Those are business ventures with limited liability, and the main difference between the two forms is generally the size of the equity capital, being a minimum of DKK 500,000.- for a P/F and DKK 125,000.- for a SP/F.
Registration Fee
Registration fee for new constructions is DKK 3.- per thousandth of the contract price up to but not exceeding DKK 100,000.-. Registration fee for second-hand tonnage is DKK 3.- per thousandth of the value price of second-hand tonnage up to but not exceeding DKK 100,000.-.
Tonnage Certificate
The Faroese Maritime Authority shal issue all tonnage certificates on Faroese flagged vessels.
The tonnage measurements shall be performed by one of the recognized organisations recognized by the Faroese Maritime Authority.
The tonnage certificate fee is DKK 2 per gross ton.
No annual registration fee
No annual registration fee is to be paid.
Company Tax Rate
Faroese companies enjoy a 18% taxation rate.
Personal Tax Rate
The personal tax rate on seamen's wages is 35% of gross wages. Shipping companies registered in FAS are repaid 100% of the personal tax on these wages.
No Social Taxes
Non-Faroese crew members pay no social taxes in the Faroe Islands.
No Nationality Requirements to Crew
There are no requirements of nationality to the captain or any of the crew members, if only their certificates are recognised pursuant to the STCW convention.
The FAS Administration
FAS is administered by the Faroese Maritime Authority.
The Bareboat Register
A foreign vessel can be registered in the Bareboat Register, if it is bareboat chartered to a company on the Faroe Islands. Bareboat registered vessels do get access to the wage refund system.
A bareboat chartered vessel that is chartered ti a Faroese company does not need to fly Faroese flag.
The Tonnage Tax System
A company covered by the Tonnage Tax System will not be taxed based on its net income but on its available tonnage.
The Faroese Tonnage Tax System is a voluntary system, but companies transferring from the general tax system to The Tonnage Tax System may not switch bach to the general tax system for a periode of 3 years.
