CREDENCE CORPORATE AND
ADVISORY SERVICES LIMITED The multi-disciplinary yachting team regularly advises owners, prospective owners, financiers and managers on the sale/acquisition of yachts and superyachts, yacht financing and registration of mortgages, yacht importation, VAT and crew-related matters. In an ever-changing environment, an international network of like-minded professionals is pivotal if one is to avoid the pitfalls of fiscal, legal and technical compliance. To this end, the Credence yachting team regularly participates in conferences and attends yacht shows to create and maintain an open channel of communication with their peers across the globe. For more details Tel: +356 2125 2893 or visit
www.credence.com.mt
yachts. Of course, VAT is only relevant if the yacht is intended for use within EU waters, which is being assumed in all three of these options.
EAT CAKE
There are of course always owners who want their cake and want to eat it too! For them there is the wheeze of Duel Use where the yacht is both private and commercial. In this scenario the owner pays the VAT on the acquisition of the yacht, so that he may freely use her without the hassle of charter agreements and payment of VAT on such use but might also wish to offset some costs against charter income. In such cases, it is important to choose a flag
ISLE OF MAN REGISTRY The Isle of Man’s yachting cluster is centred around its highly successful International Ship Registry, voted ‘Best Shipping Registry 2019’ and topping the 2018 Paris MoU White List. The Ship Registry is open to commercial yachts over 24m and pleasure yachts of any size. The Ship Registry’s Survey Department is adept at applying the new REG Yacht Code and are always on hand to offer pragmatic advice. Surveyors are based in key yachting locations including Palma de Mallorca and South of France. The Ship Registry also boasts industry- leading systems which include an online finance package, the ability to issue digital certificates and a bespoke crew welfare app, due to be launched in early autumn. For more details Tel: +44 (0)1624 688500 or visit
www.iomshipregistry.com
which allows seamless switching between private and commercial registration, with Malta being a tried and tested option.
Vessels change flags for many reasons and with the adoption of differing industry standards some yachts that are unable or unwilling to comply have sought other flags under which to seek cover. This process is often referred to as flagging out under a Flag of Convenience (FoC). Those who prefer to be more polite, call these flags; Open Registries.
Because now, almost all the commonly used registries are signatories to IMO. And they each agree to enforce regulations which
encompass SOLAS, MARPOL & ICLL, it means that owners can now safely choose which flag best meets their own particular requirements. Or in other words, it is the most convenient flag for to them to fly. If I were to be not so polite, I might suggest that means all states offer a flag on convenience but each and every state will throw their hands up in horror that I have dared call them that!
Open registries have long been criticised, by trade union organisations. One criticism is that owners who want to hide their ownership may use them to be legally anonymous. Some ships with flags of convenience have been found engaging
60 | AUTUMN 2020 | ONBOARD
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