both during the construction process and after delivery and on the structuring side, the ‘holy trinity’ of flag, VAT and crew.”
“Building or buying a luxury yacht in Italy is a complex procedure,” says Gianfranco Puopolo at PG LEGAL. “Clients frequently seek our legal advice in order to protect their investments, starting from the drafting /negotiations of the agreements for the design/ project management, for the yacht building or purchase, up to the financial guarantees and transfer of legal title of ownership over the yacht. We also support our client in dealing with ownership structures, registration and choice of flag, tax, as well as subsequent issues such as warranty for defects and yacht/crew management.”
Routine questions fired at Sarah Fairweather, Legal Director for Sales and Purchases at Shoosmiths have spiked with a rise in first time buyers during the pandemic mostly related to the financial/ tax implications of owning a yacht. Head of Luxury Asset Group, Elliot Bishop, also at Shoosmiths adds, “When it comes to dispute resolution, we receive regular instructions from family offices for issues that may have arisen during the sale or purchase of the yacht or following a charter which may not have gone according to plan. We also act for a number of the leading brokerages on commission disputes and again on charter disputes on behalf of the owner or charterer.”
WHAT TO WATCH Mistakes to watch for include VAT paid status: If an EU status VAT paid yacht is to remain in EU waters, be sure that the VAT paid status has not been lost and can be verified by lawyers. The yacht must be transferred in EU waters to keep its VAT paid status, otherwise the new owner will have to re-import it.
Galea at Dingli & Dingli adds that additional duty applies to yachts imported from the US to the EU. Galea suggests consulting customs experts in the country of import to ensure compliance with the necessary obligations.
She also urges, “If you’re buying a yacht for commercial purposes, remember coding a yacht comes with its obligations/expenses, so ideally an owner has a good idea of such expenses, even from a coding perspective before purchasing the yacht to know what costs will be incurred in order to code the yacht.” Remember too that certain ports have their own commercial licensing/ compliance rules, in addition to those of the flag state. “Don’t forget,” adds Galea, “the ownership/operation of a yacht has ongoing obligations which come with constant running expenses. If a yacht owner is not mentally and financially prepared then owning a yacht is perhaps not for that person. Chartering might be the best option!”
Not paying proper attention to the contract that has been agreed with a yard or charterer is another common tripping
VAN STEENDEREN MAINPORTLAWYERS B.V. Van Steenderen MainportLawyers is a boutique shipping firm based in Rotterdam, the Netherlands, with a well-established superyacht practice. The firm primarily acts for superyacht owners, but also advises various categories of professionals engaged in yacht operations. The principal areas of work of the superyacht legal team are; new build construction, refit and conversion, design and management agreement, yacht sale and purchase, marine insurance matters, agreements with subcontractors and suppliers and warranty claims handling. Van Steenderen Mainport Lawyers has drafted and negotiated projects with all major Dutch shipyards, including Amels / Damen Yachting, Feadship, Royal Huisman and Heesen, as well as with well-known foreign yachtbuilders. For more details visit
www.mainportlawyers.com
90 | SUMMER 2021 | ONBOARD
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