What Are the Best Countries to Register a Yacht?

The superrich are extremely careful in choosing the country where they want to register their yachts. Depending on the choice of the country, the amounts of taxes that the yacht owner has to pay are different. Besides, some jurisdictions impose certain restrictions on the yacht owners that they may be uncomfortable with.

What country should you choose for yacht registration? We discuss the issue below.

Why is it important to choose the right country where you can register your yacht?

When you purchase, own, and use a yacht, you have to enter various legal, financial, and technical agreements. The conditions of such agreements can be rather intricate and thus a lot of planning and thinking is required if you are a yacht owner. One of the most important decisions to make is choosing the country that is going to serve as the home country for your yacht, the country of your yacht registration.

Another issue to contemplate on is who is going to be the official yacht owner: a natural person or a legal entity. If you register your yacht in the name of an offshore company, for example, the ownership information is going to be rather confidential and you may be able to avoid certain claims if the yacht is not registered in your personal name. 

Yacht registration a in the name of a company allows achieving the following goals:

• You can reduce the taxes associated with owning a yacht;
• You can better protect your assets;
• You can simplify the procedure of handing down the yacht to your heirs.

The following main issues need to be taken into consideration when you are choosing the country for yacht registration:

• Your citizenship and place of residence;
• The regions where you intend to sail most often;
• The uses of your yacht (is your yacht going to be used for recreational or commercial purposes?);
• The properties of the yacht such as the year of construction, the length, the tonnage, and conformity to the international standards and conventions;
• The fiscal status of the yacht;
• The nationalities of the crew.

The choice of the country of yacht registration will also have an impact on the decisions that underwriters are going to make. They base their decisions on the reports from creditors and insurance companies. The organizations have to ascertain that the country of the yacht registration conforms with the international requirements that concern:

• Environmental protection;
• Security;
• Docking conditions;
• Service procedures;
• Other international rules. 

Choosing the country for yacht registration

The most popular countries that people often use for yacht registration include the following ones:

• European Union: Malta, Madeira, France, Italy, Cyprus, and Monaco.
• Countries outside the EU: United Kingdom, Isle of Man, British Virgin Islands, Cayman Islands, Hong Kong, Marshall Islands, Panama, St. Vincent, Jersey, and Guernsey.

Red Ensign is a group of British ship registries. They service the following countries and territories:

• Great Britain;
• British dependencies (Man, Guernsey, and Jersey);
• British Overseas Territories (Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Falkland Islands (Malvinas), Gibraltar, Montserrat, Saint Helena, and Turks and Caicos Islands).

Yachts are divided into categories by two different principles: their size and their ports of registration. Division by the first principle:

• Category 1 — yachts of any tonnage and type.
• Category 2 — commercial ships and yachts of up to 150 Gross Register Tonnage (GRT) and non-commercial ships and yachts of up to 400 GRT.

Division by the second principle:

• Category 1 — BVI, Cayman Islands, Isle of Man, UK, Gibraltar, and Bermuda.
• Category 2 — Anguilla, Falkland Islands, Guernsey, Jersey, Montserrat, Saint Helena, Turks and Caicos Islands.

The Registries of the Cayman Islands and the Isle of Man allow changing the yacht type: a recreational yacht can be re-registered as a commercial yacht and vice versa.

The jurisdictions that the Red Ensign group includes are popular with yacht owners because they are politically stable and enjoy a good international reputation. They provide efficient yacht registration procedures, management, and administration and enjoy support from British consulates, which can be useful when it comes to hiring the crew. 

At the same time, different conditions are found in different Red Ensign jurisdictions. For example, the yacht registration fees are not the same. Some of the countries will have tougher requirements as to the crewing while others will have restrictions as to the age of the yachts. For this reason, you have to compare different Red Ensign jurisdictions before deciding upon the country of the prospective yacht registration.

In addition to Red Ensign countries, the Marshall Islands is also a popular country for yacht registration. The country is in conformity with most of the IMO rules and it works in close cooperation with the U.S. Coast Guard. This is why yacht registration in the Marshall Islands gives free passage in U.S. territorial waters. 

Asian countries that wealthy people often use for yacht registration include the following ones:

• Hong Kong is a popular jurisdiction for yacht registration even though the local Registry makes no difference between recreational and commercial yachts. 
• Langkawi is an archipelago in Southeast Asia that has a popular Registry of commercial yachts.   

What factors should you account for when choosing the country for yacht registration?

The right choice of the country for yacht registration will let you save on taxes and protect the confidentiality of your personal information as the yacht owner.

For these reasons, many yacht owners prefer registering their yachts in the Cayman Islands as this allows them to seriously economize on taxes. Panama is another popular jurisdiction for yacht registration because of its friendly yacht registration policies. Panama has the largest ship Registry in the world; more than 9,000 yachts and ships fly the flag of Panama.  

However, you have to be cautious when choosing the flag that your yacht is going to fly. When a yacht is registered in a certain country, the laws of the country are applicable to the yacht. You have to make sure that you are satisfied with the local legislation regulating the use of yachts. For example, some countries require that the yacht crew should consist of local residents exclusively.

If you choose a jurisdiction with a questionable reputation for yacht registration, you may find some obstacles to sailing in certain waters or face enhanced security checks in some ports. 

The jurisdictions that belong to the Red Ensign group have acceptable security regulations, provide free access to the EU countries for yachts, and charge affordable taxes. The Isle of Man, Channel Islands, Cayman Islands, and Bermuda charge 0% in corporate tax.

If your yacht flies the flag of one of the Red Ensign countries, you are free to sail in the EU territorial waters and pay nothing in taxes nor customs duties for 18 months. When the period is over, you can reapply for the status and continue paying nothing in taxes and custom duties.  

What is the best country for yacht registration?

The top ten most popular countries for yacht registration include the following ones:

1. Malta.
2. Cayman Islands.
3. Cyprus.
4. Marshall Islands.
5. Liberia.
6. Gibraltar.
7. British Virgin Islands.
8. Panama.
9. State of Delaware.
10. Republic of Seychelles.

The British Virgin Islands is a jurisdiction with the lowest cost of yacht registration in the world.

Malta

Malta is a good country for yacht registration if you intend to sail in EU territorial waters. The country practices a pragmatic approach to yacht registration and offers several tax incentives to yacht owners. The Maltese Registry of marine vessels has a good reputation for a sound legal and regulatory system that is one of the largest such systems in the world.  The Merchant Shipping Act of 1973 regulates the use of Maltese-registered yachts. The Act was amended in 2010. Yacht registration in Malta allows you to gain easy access to bank loans and probably buy another yacht.

Malta also offers some tax benefits to the owners of ships and yachts registered there. The country doesn’t charge any corporate income tax nor capital gains tax nor withholding tax.

As of today, there are no restrictions in Malta as to the nationality of the yacht crew but the situation may change in the future.

Marshall Islands

Yacht registration in the Marshall Islands is performed via an American corporation called International Registries. The corporation has offices in many countries.

The ship Registry was created in 1988 in the Marshall Islands. In 2001, the Registry was extended making it possible to register commercial and private yachts in the country. Since that time, the Marshall Islands has been a popular country for yacht registration.

The country is also known for having regional offices in many port cities all around the world. It provides round-the-clock ship and yacht registration services.

Yacht registration in the Marshall Islands is an opportunity available to the following entities:

• Citizens of the Marshall Islands;
• Qualified foreign marine companies;
• Local companies. 

Yacht registration takes only one day in the country. You are free to sail your yacht registered in the Marshall Islands in the EU and other regions of the world.

The country has been put on the white lists of Paris and Tokyo Memorandums of Understanding and it conforms to the international yacht registration requirements.

Netherlands

Many super rich people choose the Netherlands for yacht registration. The yacht registration procedures are fast in the country and the requirements are relaxed.

Citizens of the following jurisdictions will have no trouble at all with yacht registration in the Netherlands:

• European Union;
• Switzerland;
• Norway.

Advantages of yacht registration in the Netherlands include the following ones:

• The registration process takes only three days;
• Minimal taxes on yacht owners;
• The yacht owner does not have to reside in the country;
• A short list of registration documents: the yacht owner’s passport and a confirmation of the yacht ownership;
• A simple procedure of yacht registration extension.

Yacht registration in the Netherlands will entail smaller expenditures in comparison to registration in Italy, France, or Spain, for example. Yacht registration in the country costs only 299 euros for EU citizens. Citizens of all other countries will have to pay 648 euros for yacht registration in the Netherlands but the price includes the taxes, the obligatory registered address in the country, and the registration card delivery.

Jersey

Jersey is not only a popular offshore center but also a jurisdiction with an attractive ship Registry. More than 2 thousand yachts are registered in Jersey.

Yacht registration in Jersey will bring the following main advantages:

• Prestige of the jurisdiction;
• Association with Great Britain, which mean that you yacht will fly the flag of the UK;
• Yacht registration term of validity can be between 3 months and 10 years;
• No additional annual fees;
• Registration of recreational yachts of up to 24 meters long;
• Membership in the Red Еnsign group;
• Absence of Jersey in any black lists of countries;
• A corporate entity can be the yacht owner;
• A 10-year registration of a yacht costs from 3,520 US dollars in Jersey.

We will be happy to consult you on choosing the country for yacht registration. Please write to info@offshore-pro.info and request a free personal consultation on the matter.