I came across an old article that Boat International published entitled ‘On Board Beauty: The Best Waterproof Mascaras’. It was a round-up of the best products currently on the market that were said to limit the risk of panda looking eyes whilst swimming, playing on water toys or enjoying a spot of sunbathing – so one can only assume they would also protect against any unforeseen crying.
With the latter in mind, I cannot help but think that the best mascara would in fact be that which prevents you from crying in the first place, and for those really looking to enjoy a luxury asset such as a yacht, establishing an effective yacht ownership structure offshore is definitely one way to do this.
A yacht is in no way a simple luxury asset and nor is the process of purchasing or owning one. It is therefore important for owners and/or their representatives to understand the complex requirements that accompany yacht ownership and operation. With so much legislation, regulation, liability exposures and tax implications to consider, it is imperative that owners seek professional advice and subsequently look to establish an appropriate ownership structure best suited to their intended use of the vessel.
Now whilst there is no one cap fits all solution that works for every owner, there are fundamental considerations that will apply to most. The biggest surrounds the intended use of the vessel, including whether it will be used on a private or commercial basis and where it will be cruising.
Where a high value asset moves from country to country and therefore exposes itself to the legislative laws and requirements of varying jurisdictions, many professional advisors recommend that ownership be placed inside a corporate structure as opposed to the individual’s name. Why? In addition to the corporate structure segregating the inherent risk involved and adding privacy over ownership, taking this route can also afford a number of additional benefits including tax mitigation, liability protection and VAT savings.
The choice of flag is also a very important decision as this is the country under whose laws the vessel will be registered or licensed. A vessel’s registration is effectively its passport to roam international waters, which means careful consideration is required in advance of delivery and ownership.
Each jurisdiction and flag-state carries its own pros and cons and provide varying degrees of tax friendliness, cost effectiveness, liability avoidance and straightforwardness of formation, but offshore ship registries tend to be popular jurisdictions, particularly with those who intend to actively pursue charter in popular destinations such as the Mediterranean, which is ringed by EU states.
Furthermore, some believe registering your flag under the Isle of Man flag or the red ensign signifies high quality and adherence to international maritime laws.
However, it doesn’t end at choice of flag, it is also important to consider the location in which the physical acquisition will take place to assess any potential VAT issues. Advanced planning can mitigate the tax or benefit from certain tax reliefs. If a yacht is purchased outside the EU, whilst VAT may not be payable on the transaction it could remain payable when the yacht is first brought into the EU.
There are various options for those purchasing a yacht in which they may be able to reduce the VAT on the purchase of the yacht, but these should be considered according to each individual’s own circumstances.
In summary, a yacht is a significant investment made up of time and money and not structuring it properly may leave you in very choppy waters. So, if you are looking to purchase a yacht, seek professional advice at the outset and follow it to the letter to ensure that you establish a structure that is fit for purpose and meets your objectives.
Those who choose not to engage a professional advisor to structure their high value asset and instead listen to ‘down the pub advice’, might need to invest in one of those recommended mascaras – they can find said article here.