Dispelling the Myths of Superyacht Ownership

The purchase of the Superyacht

The prospective owner(s) first point of contact when they have made the decision to purchase a superyacht will likely be with the sales broker or the existing owner.

To ensure their purchase and continued ownership will be an enjoyable experience, the prospective owner should engage the services of advisers that specialise in the ownership and management of these luxury assets:

1. A Corporate Services Provider (CSP) to set up and administer the ownership structure;
2. A legal/tax adviser; and
3. A yacht management company.

The prospective owner may already have a preferred CSP or possibly their own family office through which their business affairs and other high value assets are administered. Although their existing CSP/family office will be well versed in the setting up and administration of a corporate structure for the purpose of controlling their business interests, because owning a yacht is such a specialised area it would be prudent to engage the services of specialist superyacht advisers referred to above.

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‍Typical questions for the prospective owner?

• What is your nationality/residence status?
• Where do you wish to use your yacht?
• Where will the home port be?
• Will the yacht be used for pleasure, commercially chartered, or perhaps occasionally chartered if the opportunity arises?
• Will finance be required for the purchase?
• Who will employ and pay the crew?

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Benefits of offshore corporate ownership

Setting up an ownership structure in a well-regulated and reputable offshore jurisdiction provides the following benefits:

1. Limited liability - limit the liability of the beneficial owner both from a legal and financial perspective to the value of the assets in the structure;
2. Protection of privacy;
3. Estate planning/asset protection;
4. Potential tax and VAT benefits when the yacht is chartered;
5. Preferred structure by lenders if yacht finance is required.

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Flag selection

Flag selection establishes the law under which the yacht conducts its business and operations and is therefore a key decision when considering the overall structure. The nationality of the owner and the intended use of the yacht must be considered when deciding on the most appropriate jurisdiction.

The jurisdiction of the corporate owning structure and the flag state do not have to be one and the same. Several ship registries have offices in multiple locations around the world ensuring that communications are undertaken in the same time zone. For example, a Jersey company can register a yacht in the Cayman Islands and liaise with the Cayman registry via its UK office.