Update on Vietnam Ship Registration and Mortgages

In this context, the legal framework governing ship mortgages plays a vital role in protecting the interests of stakeholders and ensuring a stable, predictable environment for maritime financing in Vietnam. This article provides an overview of how Vietnamese law regulates ship mortgages and maritime liens, outlining legal nature, scope, and enforcement, along with practical observations for stakeholders in the maritime sector.

Legal Framework

Ship mortgages in Vietnam are governed by the country’s maritime code, primarily the Vietnam Maritime Code 2015 and civil laws. Under these provisions, both completed vessels and vessels under construction may be mortgaged[1], enabling shipowners to secure obligations to the mortgagee without transferring ownership or possession of the ship.

In addition to registered mortgages, Vietnamese law recognizes several categories of maritime liens, which arise automatically from specific maritime claims and generally enjoy priority over registered mortgages[2].

Ship Registration

In Vietnam, watercraft refers to any means operating on or beneath the water surface, including ships, vessels and boats, and other craft with or without engines, all of which must be registered in the Vietnamese National Ship Register.

Foreign-owned ships that satisfy the statutory conditions may also be registered in the Vietnam National Ship Register. Once registration is completed, the Vietnam Maritime and Waterways Administration (VIMAWA)[3] or other relevant maritime authorities under VIMAWA’s authorization[4] (hereinafter collectively referred to as “Vietnam Ship Registration Authorities”) issues a Certificate of Registration of Vietnamese Ships (the “Ship Registration Certificate”), which serves as evidence that the vessel is entitled to fly the Vietnamese flag and confirms the legal ownership of the ship.[5]

For vessels under construction, successful registration results in the issuance of a Certificate of Registration of Ships Under Construction by the Vietnam Ship Registration Authorities. This certificate is only provisional in nature and does not replace the Ship Registration Certificate. [6]

Ship Mortgages in Vietnam

The registration of a ship mortgage is carried out through the Vietnam Ship Registration Authorities [7] to ensure the priority. Subject to successful completion, a Certificate of Registration of Seagoing Ship Security will be issued[8]. A ship mortgage becomes valid upon its registration in the Vietnam National Ship Register and remains effective until it is formally deregistered.[9] Registration records include details of mortgaged ship, mortgagee and shipowner, secured sums, interest rate and repayment terms.

The mortgaging of a ship held in co-ownership requires the unanimous consent of all owners, unless otherwise agreed by the parties. The mortgagee shall only keep a copy of the Ship Registration Certificate of the mortgaged ship.

The mortgaged ship may secure multiple obligations so long as its value exceeds the total value of the obligations secured, unless otherwise agreed in the contract. The priority of ship mortgages is determined based on the order of registration in the Vietnam National Ship Register. The shipowner must buy insurance for mortgaged ship, unless otherwise agreed upon in the mortgage agreement.

The transfer of ownership of a mortgaged ship is prohibited unless otherwise approved by the mortgagee. If the mortgagee transfers to another person all or part of its rights in the debt secured by a mortgaged ship, the ship mortgage shall be transferred accordingly to the same extent.

Upon debtor default, mortgagees may settle the secured vessel after proper notice[10]. Vietnamese law allows several methods for realizing collateral, including sale, auction, or accepting the collateral as a substitute for fulfilling the obligations of the secured party[11].

Maritime Liens under Vietnamese Law: Key Principles and Practical Implications

A maritime lien is a privileged claim that attaches to a vessel automatically when the underlying maritime claim arises. It does not require registration, possession, or prior notice, and may exist without the knowledge of mortgagees, financiers, or buyers. Under the Vietnam Maritime Code 2015, a maritime lien grants the claimant a statutory right to pursue compensation against the shipowner, charterer, or operator for specific categories of maritime claims arising from the vessel’s operations.

Vietnamese law recognizes only a limited and exhaustively defined set of claims give rise to maritime liens. These include:

• claims on crew wages and related costs
• claims on compensation for life, disability or other injury to human health
• deadweight tonnage charge, marine safety charge and other port charges,
• remuneration for salvage
• claims on non-contractual property loss and damage directly relating to operations of a ship.

These claims are satisfied according to a mandatory statutory priority regime upon arrest of the vessel through the court’s decision. While the order of priority is fixed, salvage claims may be elevated above earlier-arising claims, and where available funds are insufficient, distribution is made proportionally. Claims arising from the same event are treated as simultaneous, and maritime liens relating to the vessel’s final voyage are paid ahead of liens from previous voyages[12].

Maritime liens enjoy a higher priority than ship mortgages and other security interests, even where the mortgagee was unaware of the lien’s existence. They also survive changes in ownership, meaning a purchaser takes the vessel subject to existing liens regardless of notice. This creates inherent risk for lenders, as maritime liens cannot be registered, predicted, or fully mitigated, and may erode the value of the collateral.

The limitation period for enforcing a maritime lien is one year from the date the lien arises. A maritime lien is extinguished once the shipowner, charterer, or operator has fully satisfied the underlying claim; however, if the funds are merely held by the master or another authorized representative for the purpose of payment, the lien remains in effect until actual settlement. Where the court is unable to arrest the vessel within Vietnam’s inland or territorial waters to protect the interests of maritime claimants who permanently reside, the limitation period shall expire 30 days after the vessel’s first arrival at a Vietnamese seaport, but in all cases no later than two years from the date the lien was generated[13].

Conclusion

Overall, the regimes governing ship mortgages and maritime liens provide a coherent legal framework for vessel-based financing in Vietnam, while also creating specific priority and enforcement risks that must be carefully managed. Accordingly, shipowners, lenders and investors should engage experienced Vietnamese maritime counsel to structure and document transactions, monitor maritime liabilities and protect the effectiveness of their security interests throughout the vessel’s lifecycle.

[1] Article 37.4 of Vietnam Maritime Code No. 96/2015/QH13 dated 25 November 2015 (the “Vietnam Maritime Code”)

[2] Article 41 of Maritime Code

[3] Articles 4.1 of Decree 171/2016/ND-CP dated 27 December 2016 on registration, deregistration, purchase, sale and building of ships (the “Decree 171”) which has been amended by Article 1.3 of Decree 247/2025/ND-CP dated 15 September 2025 (the “Decree 247”)

[4] Articles 4.2 of Decree 171 which has been amended by Article 1.4 of Decree 247

[5] Article 22.4 of Vietnam Maritime Code

[6] Article 23 of Vietnam Maritime Code[7] Article 10 of Decree No. 99/2022/ND-CP dated 30 November 2022 on registration of security interests (the “Decree 99/2022”) and Article 5.6 of Decree 171

[8] Article 43 of Decree 99/2022

[9] Article 39.2 of Vietnam Maritime Code; Articles 6.1(a) and 6.1(b) of Decree No. 99/2022[10] Article 300 of Civil Code 2015

[11] Article 303 of Civil Code 2015

[12] Article 42 of Maritime Code

[13] Article 43 of Maritime Code