ASSUME NOTHING!
Security of Raffles ownership
Recognising that providing a carefree and luxurious life style, combined with world class financial and legal security is essential, Raffles is unique in that its 122 owner / occupants really do legally purchase outright, and thereafter own and control the vessel (their individual apartment), and do not just lease it. Your ownerships starts at 51% from the beginning of its construction and continues through it until on Raffles delivery you own it 100%.
To provide unambiguous and easily understood legal and financial security and protection the ownership of Raffles (the ship) is by a single purpose, Isle of Man private limited liability (single) ship owning company provisionally named Raffles Limited Company (Raffles Ltd). This company is finally capitalised at about €272 million or the total cost of all apartments or (at owners' option) an independent market valuation, whichever is the higher value.
When it is first established the IoM ship owning company Raffles Limited will initially be wholly owned by FVH (the builders) and with a paid up capital of about €17,000 @ €1 per share or the m2 amount of all apartments available on Raffles. Immediately it is established all the 17,000 shares will be deposited in a special escrow / trust account that is established with The Bank for this sole purpose.
At the time actual start of construction is authorised and concurrent with receipt of the first stage payment 51% of shares will be automatically transferred from FVH to the owners by The Bank but will remain in the special escrow / trust account with the bank.
During the construction period of about 2 years The Bank will then be solely responsible for automatically transferring ownership of shares from FVH to owners as their subsequent stage payments are made into Raffles Ltd. account in about 5 separate transactions.
The ownership of shares by the 122 owners will thus increase in stages to 100%, meaning that at the time of Raffles legal delivery FVH ownership is reduced to zero (0%).
The 100% of shares that the owners acquire from FVH will remain in the escrow / trust account managed by the Bank until final settlement of all outstanding financial / legal matters relating to the ship itself, technical / legal transfer after which they will be automatically released to the owners by The Bank.
The 122 individual apartment owners as sole shareholders then control and own this company (and with it Raffles) giving them thereafter the ability, without any problems, to will their ownership or to sell it by a simple transfer of their shares in accordance with the company's laws.
Most legal and accounting matters will be handled by international lawyers in Bermuda, Alexanders, plus accountants Ernst & Young who are appointed as initial legal advisors / auditors for the 2 years construction period and the minimum 1 year guarantee period following it, with this arrangement also providing legal and financial protection for the builders / FVH.
As added protection for both buyers and builders an independent Chairman (satisfactory to The Bank) with long term experience / expertise in finance, shipping and international business will be appointed to Raffles Ltd. board with his main role to advise owners on all matters to do with Raffles acquisition and then its initial operation. His appointment will be for the 2 years construction period and 1 year guarantee period and designed to protect both owners and builders as an unbiased expert positioned between the two parties.
Alexanders / The Bank, both during the planned 2 years of Raffles construction, and later when it is put into operation may employ as needed additional consultants such as Lloyd’s Register to advise them (at the ship's cost) on technical matters, and Marsh on insurances, but always with the owners notified in advance.
Separately the owners / the Chairman can appoint their own technical / legal consultants (also at their cost) but similarly have to advise FVH / AMS of this in advance.
This high level of financial, legal security, control, oversight planned and advice available is provided by the simple structure / method of legal operation described that has been developed in cooperation with the aforementioned professionals.
The structure shown in the organigram or flow diagram below also shows the special escrow / trust account in Bermuda or IoM that only during the construction period holds in trust all of the shares of Raffles Limited.
Separately to any corporate advisory or trust / escrow duties above, The Bank / Alexanders / Ernst & Young are also available to provide advice to individual owners on personal financial / legal matters, (not necessarily only related to Raffles), including the possibility as shareholders of an IoM Company of financial / legal domicile in Isle of Man or Bermuda, (not residency) with the many advantages this may bring to non US / Australian citizens.
Recognising also that 122 owners of different nationalities may all have different wealth planning needs particularly with respect to personal tax and inheritance issues The Bank can also propose an additional offshore Bermuda trust structure that can provide an extra layer of protection, if this is needed. However if the option to do this is exercised it should ideally be before construction starts.
The optional trust / and private trust company structure in Bermuda shown in the second organigram at the end of this section will be finalised only if required and only after all the 122 owners nationalities are confirmed and if / when any special needs or desires in terms of the individual(s) owner(s) legal, financial security are established. The Bank / Alexanders may then tailor or modify the trust structure shown to meet the majority of owners needs always recognising that due to multiple nationalities potentially being involved it may not be totally to the satisfaction of all owners.