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.
FREEDOM TO OPT FOR YOUR OWN FLAG
A bareboat chartered vessel, that is chartered to a Faroese company does not need to fly the Faroese flag. In this case, the flag state, where the ship is registered has to accept that the management of the ship is transferred to another country. Furthermore, a charterparty has to exist.
Vessels that are registered in the bareboat register cannot be mortgaged in the Faroe Islands.
By combining the Tonnage Tax System (TTS) with the “Wage Refund System”, a company may increase its earnings, as the tax paid by the seamen will be repaid to the company and this will not affect the income statement for tax purposes according to the TTS.