Yacht Ownership: Is a Company right for you?

Corporate Yacht Ownership

Corporate yacht ownership has been used for over 50 years, but many people still don't understand the details of owning a Superyacht in a Company. A company has it's pwn legal personality and . Different types of entities are used to own yachts, with the most popular being limited liability companies and partnerships. Each type has specific properties and benefits depending on the ultimate beneficial owner's circumstances.

The Importance of Structure

At the outset, a company must carefully consider the type, jurisdiction, directors, funding, and shareholding arrangements. Each jurisdiction has its rules and regulations for forming and administrating companies. 

As a yacht moves from country to country, it is crucial to position and maintain the correct company to meet the different requirements of each jurisdiction. The company must also be run correctly in mind, management and control, funding, record-keeping, and filings. Failure to meet any of these elements can negatively affect the beneficial owner and be very expensive to rectify.

Corporate Yacht Ownership may initially seem like an unnecessary cost and inconvenience, but establishing the correct structure can be beneficial in the long run. 

Who provides companies?

Corporate/company service providers (CSPs) or fiduciary companies provide companies and special-purpose vehicles. These businesses tend to be regulated as financial services businesses and adhere to regulations and codes of conduct, with professional specialists in Law, Company Secretarial, Accounting, and Compliance.

Jurisdictions such as the Crown Dependencies of Guernsey, Jersey, and the Isle of Man historically have maintained high regulatory standards, increasing regulation and transparency pressure under the umbrella of the FATF and MoneyVal,  consistency between countries is increasing.

The team at Breaking the Mould Consulting has over 30 years of international experience and is based in Guernsey, Channel Islands.  We understand that there is much more to selecting an advisor and CSP for a family office than price, and we can take the time to understand your needs and guide you through the selection process. 

Benefits of Corporate Yacht Ownership

Privacy

Privacy is paramount for many yacht owners who use their yachts to protect their precious personal time. In today's world of social media and public owner registers, it's not difficult to find out who owns the largest yachts, even if the company's shares are held by someone else. The perception of yacht ownership has changed after the financial crisis, and owning a Superyacht can provide privacy and protection against potential intrusion for the guests.

Yacht charter

Owning a charter yacht is like running a small business. An individual owner can outsource financial and maritime responsibilities to professionals. However, individuals cannot always register for VAT and fiscal registrations, charter licenses, tax exemptions, employment regulations, and safety management. To address this, a corporate entity is required for a beneficial owner to charter their yacht.

Ring-fencing (Limited Liability)

To protect a beneficial owner's other assets if an insurance claim isn't covered, corporate yacht ownership limits the claims to the assets of the owning corporation. This is why you often see other significant assets, like second yachts owned by the same beneficial owner, held under separate ownership.

Flag

Flag State is a vital decision for any prospective yacht owner and will dictate much of the regulations, even during the build phase of a new yacht.  Each flag state has its requirements for both individuals and companies. If someone doesn't meet the requirements to register a yacht under their name, they can use a company from a qualifying jurisdiction as the owner instead. The yacht's flag and name are important to many owners, so having a corporate owner can sometimes solve this issue.

Expertise

Owning a yacht can be complicated, so using a company and appointing experienced managers is a good idea. This is especially helpful for new yacht owners because these managers are legally required to look out for the owner's best interests.

Time

Yacht owner's time is one of their most valuable commodities.  The Family Office team rarely have the in-house skills to manage the details of assets such as yachts and jets.  It is essential to have professional experience in private client affairs, know what is required to manage these expensive yachts and support the captain and onboard team.  A company and experienced management team can ensure the yacht retains its value and that the family can maximise their enjoyment.

Is corporate yacht ownership right for me?

Corporate yacht ownership is not for everyone, and there are many situations where owning a yacht directly in the name of the beneficial owner is the right choice. Consider what you want from yacht ownership before deciding how to hold the title.

If you are interested in learning more about how we can guide you through your yachting journey, you can book a call with us