Whether the yacht is in build or you’re purchasing a second-hand yacht, the thought as to how the yacht will be owned is often left too late in the transaction which can detract from the initial ownership experience.

Planning ahead and seeking professional advice in regards to the owning structure, the yacht registration, flag, and class will protect the owner and minimise disruptions to the enjoyment of the yacht, particularly in the early period of ownership when there will be unforeseen problems with the operation of an asset by a new Captain and crew.

The ownership structure will be influenced by the location of the yacht, whether it will be operated Commercially or Privately and its area of operation. The choice of ownership structure and how the funding of the corporate entity should be planned early and documentation drafted. This all needs input from the Owners advisors, who understand his financial affairs and legislation in his country, his residence, and his domicile. Some countries have wealth taxes and benefits in kind and these need to be considered in addition to the yacht registration and VAT payable on the purchase of the yacht.

The captain and owner relationship is key to the successful operation of a superyacht and planning early for the yacht’s delivery and setup processes for the onboard safety processes, financial administration, and each department will help the onboard team deliver a better experience for guests early in the yacht owning journey. Owners need to understand that the yacht is a piece of complex equipment, operating in a challenging environment.

Preparing and documenting standard operating procedures in advance of delivery will be beneficial for the crew welfare and to deliver the highest levels of service to guests. It will also ensure the owner and guests understand what can be delivered at any point in time rather than simply having an Instagram image in their mind which may not be realistic. Implementing MLC and ISM or a mini ISM compliant framework (for yachts less than 500GT) provides a framework for the Captain for safety and to deliver the highest quality of service and cover his responsibilities effectively.

The key to improving the management information around the yacht is to improve the speed and accuracy of processing the underlying data. Modern Cloud accounting systems and the use of integrated banking platforms and analytic software have created a massive opportunity to improve on the delivery of management information at a realistic cost.

The financial administration often rests on the Captain if a Purser is not employed. A commercial yacht is operating as a business and having a CFO or Virtual CFO to support your Captain has the same advantages that an owner will have in their own businesses.

The quality of accounting records will face greater scrutiny as revenue departments look to recover revenue for their governments post-Covid. Yachts chartering, with multiple country VAT numbers, need to ensure invoices have the correct information. France and Italy already have a requirement to hold accounting data in an electronic format and using technology can streamline the delivery of this data and reduce the duplication of work between family offices, managers, fiscal agents, and corporate service providers all of whom often process the same data to meet different requirements.

In conclusion, planning the purchase, considering the owner’s circumstances and requirements and supporting the Captain by implementing processes tailored for the yachts departments and employing a qualified accountant with yachting industry and commercial experience to deploy cloud accounting technology will free hours up onboard allowing the captain to focus on the yacht operations, reduce the risk of tax irregularities and improve financial control and management information for the owner and his team.

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