ASSET V, a complete solution for registering your yacht in Malta.

Asset V is delighted to announce that for the 2018 season it is offering a complete package that encompasses:

  • Malta Flag Registration;
  • Flag Survey;
  • Crew Management, with payment of social security in Malta where applicable;
  • Fully transparent accounting management services.

Asset V is a specialised yacht management practice with 150 years’ experience in the marine industry. Asset V is able to register your yacht under Malta Flag for the upcoming season, in most cases in less than five working days.

Asset V is a one-stop shop, offering a complete and tangible service that confers the following benefits to you:

  • High level of service;
  • Easier communication;
  • Faster time of response;
  • Cost saving.

Please, contact our Client Manager Stefano Bombardini on stefano.bombardini@asset-v.com, or by phone (+356) 2540 7990, in order for you to obtain a bespoke proposal to suit your particular needs.

Things to Consider While Buying a Yacht

Things to Consider While Buying a Yacht

Lifestyle magazines and movies have romanticized the idea of yachts so much that anyone who can afford it wants one. But before you can head off over the horizon, there’s a hurdle to get over – buying it. Considering the high stakes and technical know-how required, buying a yacht is no easy task. It is easy to get scammed or charged absurdly high rates for a sub-standard yacht. Luckily, we’ve got your back. Keep these tips in mind while shopping for a yacht to make sure you get the best deal.

1. Get Help from the Experts

A yacht has many elements to it. If you want to purchase the yacht that’s right for you, it’s important to familiarize yourself with these items. Ask for help from people who already own some kind of passenger boat. Get them to show you how to operate it, and understand the terminology involved. If you are not aware of any such person, go for online videos, tutorials, and reading the material. Remember, an ignorant buyer is a lot more susceptible to being scammed. If you know the basics of a yacht, you’re more likely to spot a good deal and avoid the fraudsters.

2. Know Your Requirements

How big do you want your yacht to be? Will you use it for traveling, or are you going to charter it out? How many passengers do you expect to have? Do you prefer speed or a luxury cruise? How much are you willing to spend? These are some of the questions you need to ask yourself before you start hunting for a yacht. Once you know what you want, it becomes a lot easier to find something that matches those goals. Another important thing you need to ask is whether you’re happy with a production yacht, or do you want to go for a custom yacht. The prices of both differ significantly, and so does their suitability for you. IMPORTANT NOTE: When counting the number of travelers, do not forget to take crew members into account.

3. Familiarize Yourself with the Prices of Yachts

Yachts are a significant investment, and you should expect to spend a considerable part of your savings on one. Production yachts, i.e., yachts that are mass produced and assembled by factories, using general specifications and requirements, generally start around Euro 100,000 and can go beyond Euro 5 million. Semi-custom or fully custom yachts are considerably more expensive. A semi-custom yacht averages about Euro 25 million, while a fully custom yacht can reach Euro 100 million. Another option to consider is buying a previously owned yacht. This brings the initial cost down, but there is always a risk of it being worn or faulty, so the cost of upkeep and maintenance will go up. Buying second-hand is a good option if you have experience in buying yachts, or know someone who does. This way you can keep an eye out for any mechanical or other faults in the boat. Second-hand is also good if you want a customized boat or a yacht with some character and history attached to it. You can use the money you save on the initial cost to refit and customize it to your taste. Being aware of the many elements involved in a yacht is helpful when you negotiate a price with the dealer. Knowing the value of everything involved can help you assess whether the seller is offering you a fair price or not. When it comes to budgeting, it is important to take into consideration the upkeep and maintenance costs. A yacht requires a proper support crew, fuel, and general maintenance. All this can cost you a lot of money every year. Add to this the insurance costs, and you have a hefty bill.

4. Enlist the Help of a Yacht Broker

Just like a real estate agent, getting help from a yacht broker makes the process faster and less stressful. Brokers can help you find the perfect yacht, but you will need to know your requirements and be able to make them clear. Yacht brokers have plenty of experience in buying yachts for customers, thus enabling them to detect a good buy when they see one. Find a good broker either through referrals or by checking their advertisements – but do make sure you run a background check on them too. You can do this by talking to some of their previous customers, asking about their experience.

5. Avoid Private Sellers or Dealers without a Credible Reputation

It might be tempting to get a cheaper yacht from a less reputable dealer or even an individual private seller, but this will significantly improve the risk of scams and frauds. Always go for reputable dealers, who have a reputation to protect and uphold. The private sellers have far less to lose, as they will usually have only one or two boats to sell, so a bad reputation won’t affect them much. When it comes to reputable dealers, one unsatisfied customer can ruin the image they took years to nurture and build. They will go the extra mile to make sure the customer is happy and satisfied because a satisfied customer significantly improves the dealer’s image.

6. Take Your Yacht for a Test Ride

Once you have decided on a boat, it is important to take it out for a test ride. A yacht will cost you a lot of money, so it’s best to be vigilant. Make sure you’re entirely satisfied with the yacht you are about to buy, because once the contract is signed there won’t be much you can do. Save yourself the regret and test your yacht! If you can take an expert on board with you, so much the better – they can point out any flaws, or tell you if the yacht is not as the seller advertised. Sellers may often charge you for the test ride, but if you’re lucky or have good negotiation skills, you can convince the dealer to waive this. Even if you do have to pay, it is still important to check the yacht – they cost a lot, and if you cut corners now, you might be faced with additional maintenance costs later.

7. Payment

A third party escrow service are designed to provide complete safety to buyers when paying for high value transactions such as when purchasing a yacht. No money changes hands between the two parties until all terms and conditions of the sale have been met meaning that there is no risk to the buyer of not receiving their boat. If you are looking to buy a yacht, contact us today to ensure that your transaction is secured. We look forward to serving all your yacht needs
Once you’re satisfied, you can finally sign that contract. At this point, make sure you have complete documentation and proof of ownership. Only then can you enjoy your boat. If you have no prior experience in sailing, hire a crew and maintenance staff, or get some training.

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Tips for yacht refit preparation and yard time

Useful tips for yacht refit preparation and yard time

It is important to plan yard period well in advance; early planning will always save the owner money. The yacht captain or manager should be aware of the class surveys that are due, but it is not unusual to find yachts with overdue surveys for the simple reason that they were forgotten about.

Often, yachts have planned the cosmetic work that will be carried out during the yard period, but have partly or totally omitted to take into account the classification surveys that are due. Overdue docking surveys mean yachts that have been dry-docked are often left no other option but to haul out again.

Yacht captains and managers always need to check the survey status when planning a dry dock, and, if in doubt, you can always contact your yacht management team for advice on where you stand with surveys.

Yacht in yacht lift
When it comes to yacht refits, repairs and modifications, planning in advance can save unforseen costs.

For example, yacht intermediate surveys normally require sanitary tanks to be opened up for inspection, this can be done any time between the second and third annual survey, effectively with an 18-month window to present the tanks for inspection. It is always better to have this done while the yacht is in the yard instead of doing it in a marina, as it is always more convenient to have a tank cleaning team in a shipyard than to end up having to arrange for tank cleaning in a Mediterranean marina in the middle of the summer season.

Although dry-docks are generally very long compared to commercial ships dry-docks, planning is key to a cost effective yard period. Here are  some useful steps to follow:

• Hold a pre-inspection meeting with your yacht management office prior to the yard period to define the scope of the upcoming surveys, this is particularly important to plan the extent of the engine survey that can be costly depending on the amount of opening up.

• Advise the team as early as possible of any work planned that may require a formal design appraisal. This can take a few weeks, and if not planned in advance, you will find that the yacht may have already left the yard before the design review is complete. It is, of course, always best to take into consideration recommendations made at the design review prior to starting the job. You should also keep in mind that when doing a major alteration on a yacht, the rules that apply may not be the rules that applied at time of construction. For example, yachts fitting new stabiliser units having to comply with new regulations found that they have to fit water tight compartment around new stabiliser when these did not exist on the old units.

• Look at the latest amendments to international regulations to check if any modification has to be carried out on the yacht. For example, rail and track systems for certain flags.

For special surveys:

• When doing special surveys for yachts over 15 years of age, try to ascertain the amount of steel work repair before the dry dock. Very often the wasted areas are visible in the bilges or under air conditioning units, on tank tops or in the engine room. It is always better to make an assessment of the amount of steel replacement before coming into dry dock.

• Clear out all the bilges and tank tops so that the inspection on board can be effective. Expect to remove some insulation on deck heads and bulkheads. The difficulty on board a yacht is the access to and visibility of structure hidden behind furniture, insulation and teak.

• For the docking survey, prepare to have measurements taken on the tailshaft and rudder stock. Check the last reading of the cutlass bearing clearance as you may expect to have to replace the bearings. Previous readings will indicate if replacement of bearings will be needed.

It’s recommended to keep a record of all maintenance carried out.

For engine surveys:

• Plan for an electrician to be present to check tightness of electrical connections.

• All ship side valves will have to be removed for inspection, this includes underwater exhaust valves.

• Keep a record of all maintenance carried out; if service reports are thorough this may be helpful to decide on the extent of opening up the engine.

• Prior to completing the surveys in the yard, do not ask your surveyor to complete surveys too early; if you still have two dozen of contractors working on board and half of the doors still in the paint shed, it is not time for the annual survey.

For more information, visit Lloyd’s Register.

Fire Prevention on board

Onboard fire

A shout of “fire” is probably the most dreaded word to hear aboard any vessel. Fires are deadly and destructive, can be difficult to put out, and could ultimately cause the loss of the vessel and/or loss of life.

All crew, especially deck and engineering officers, spend much time and effort undergoing firefighting training and participate in numerous fire drills. Special training is devoted to engine room fires that is where most vessel fires originate. Emphasis is placed on fire prevention including good housekeeping practices and the removal of any one element of the fire triangle (fuel, heat and oxygen) that will cause a fire to go out or not start in the first place.

All yachts built today are designed with fire prevention in mind and include fire bulkheads, non-flammable materials and have systems and equipment to detect fires and extinguish them. There are many fire items aboard such as smoke detectors, heat detectors, fire suppression systems, fire extinguishers, firefighting gear and tools, fire pumps and plumbing, etc. There are fire safety plans, international rules and a host of measures designed to prevent and, if prevention is not successful, to extinguish fires.

Even when extinguished, depending on the severity and longevity of the fire, much effort and expense will be spent in repair and cleanup, not to mention the vessel being out of service for some amount of time. Fires become exponentially more costly for every second they burn.

Yet, no matter how hard we try to deal with the prevention of vessel fires, they still occur.

Origins of oil mist fires

An important area of fire origination in engine rooms is oil mist. The International Maritime Organization (IMO) recognizes the extreme danger of oil mist fires in vessels: ISO 16437:2012 “The majority of fires which have occurred in engine rooms are generally caused by a leak or fracture from a flammable liquid system. Most engine room fires begin as a result of the ignition of oil mist.

Many mariners are not even aware that oil mist is a fuel and can be present in the engine room without any warning. Oil mist is typically introduced to the engine room via a tiny perforation, fracture or leak of pressurized oil (fuel, lube or hydraulic) from injectors, fuel lines, high-pressure pumps or high-pressure oil lines that atomizes the fluid as it escapes. It is frequently undetectable by the naked eye.

Oil mist may also form when oil contacts a hot surface causing the oil to vaporize. Oil mist is quite small, with droplets in the 1-10 micron range, and tends to disperse evenly in the surrounding air. It has a large surface area and a low flash-point temperature, making it very flammable when sufficient quantities are present. If the quantity of oil mist reaches the lower explosive level of 50 mg/liter and comes into contact with a heat source of 200 degrees C, it can explode.

Ignition can come from heat sources such as bearings, turbochargers, exhaust systems and electrical sources such as electric contacts, faulty wiring, motors and static electricity. Oil mist explosions in large engine crankcases have been recognized for many years and devices to detect this have been required for quite some time. More recently, attention has been given to oil mist in the ambient air in engine rooms, and oil mist detectors for this specific problem have been developed.

Oil mist detectors vary

There are two types of oil mist detectors for engine rooms. The earlier “sniffer” systems have been around for a while. This type will extract engine room air into the unit and analyze it by nephelometry, the detection of oil mist due to light scatter. If oil mist is present, an alarm will be generated.

They work well, however, there are some disadvantages. Multiple units are needed to effectively sample the various areas in the machinery space because each local point of the machinery space ventilation will require a separate unit. The units are pre-calibrated so no adjustments are possible. Each sampling unit is somewhat bulky and most require AC power, so if the problem lies with the electrical generator, they stop functioning when the generator is shut down unless a UPS (uninterruptible power supply) is provided. They have moving parts (fans), which require periodic maintenance, and some units have filters that must be changed. The nephelometric chamber that houses the light source transmitter, measuring receiver and compensating receiver will need periodic cleaning. This type of system is typically found on large commercial vessels.

A more recent type of oil mist detector is the optical opacity meter. These were also developed for large commercial vessels but because of their small size, they are ideal for yacht installations.

Initially, infrared light was used but the most advanced systems now use a laser. The laser is transmitted from the transceiver to a reflector and back, a double-pass detection method. The optical qualities of the laser are precisely known so any oil mist present will be detected by the opacity of the laser light.

There are a number of advantages to this type of system: They are much smaller, streamlined units. The transceiver and reflector can be mounted from 1m up to 15m (50 feet) apart, providing a large area of coverage. Generally, two units will cover a large engine room and the main reason for the second unit is not only to provide more coverage but to also provide redundancy. They are also fully programmable so that warnings and alarms can be adjusted to any opacity parameter.

These systems integrate into the vessel’s communications system using MODBUS TCP/IP protocol so they are easy to install. They have no moving parts so the only maintenance required is to periodically wipe the lenses clean. They use DC power (typically 24 volts), the same as most modern electronics, so are not affected if the vessel’s generator is taken off line.

Another big difference is that these types of oil mist detectors will also detect the presence of smoke. Earlier versions had more false alarms because of the longer light path, but advances in the quality of the laser optical beam analysis and the ability to program the units have greatly reduced or eliminated this problem. Multiple transceivers can work off of a single PLC (programmable logic controller).

Yacht safety comes first

Additional transceivers can be installed to protect other machinery spaces that have the potential for oil mist, such as generator rooms, hydraulic spaces (stabilizers and thrusters), and steering gear areas (lazarettes). Besides protecting from fire hazard, the early warning of oil mist presence will pay dividends in keeping the yacht’s machinery spaces clean. The system is type classed and certified by DNV-GL for classed vessels. Most importantly, it gives the crew an early warning of a hazardous fire situation.

Marine insurance companies are still unaware, for the most part, that these systems exist for yachts, but this will change as more oil mist detectors are installed and fire casualties are reduced. This is already the case with commercial vessels, especially tankers and cruise ships.

Firefighting and fire extinguishing are important, but fire prevention is even more so. Preventing fires is the most cost-effective method to avoid injury, damage, and loss.

What are the factors that contribute to the choice of flag registration?

The yachting industry is focused on the pursuit of pleasure. Many aspects affect an owner’s choice in a yacht. Aside from the purely cosmetic and recreational issues, a large portion of a yacht’s existence depends upon its legal structure. Included in that framework is the yacht’s intended use and domicile, namely its registration.

The factors that contribute to the choice of flag registration for a yacht can be many. Certainly, the legal aspects and tax implications are high on the list. Will the yacht operate predominantly in United States, European, or worldwide waters? Let us not forget perception, politics, nationalism, and personal contacts. Although sometimes it may appear that way, an owner’s decision for registering a yacht is not simply picking the flag with the prettiest colors.

There is a choice that is always discussed with captains, brokers, documentation agents, attorneys, and all others associated with our industry: should the yacht be registered as private or commercial?

In this lethargic economy, even the most affluent of yacht owners are searching for a return on investment from everything, including their hobbies and entertainment.
Let’s take a look at some of the more popular responses on commercial certification and clarify the points.

Too expensive
Certainly, expenses and fees are on the top of everyone’s list. Let us remember that most yacht owners did not achieve their success by being foolish. This is especially true when it comes to finances. Running a yacht, either private or commercial, is not cheap. For a commercial yacht, there are additional costs involved in safety equipment, required third-party inspections, registration, and legal fees. Solely considering the amount of tax that is levied on the value of a private yacht, plus the future taxes on her fuel, doesn’t consider that those costs are almost immediately recouped. In some cases, the first day of a charter and/or the savings at her first fueling will recoup those costs. The inherent increased resale value for a commercially certified yacht is also a positive factor.

Owner has no intention of chartering
Having a yacht certified for commercial operations does not obligate an owner to charter the yacht. When, where, and if, an owner so decides is completely at the owner’s discretion. Having a yacht meet the standards of commercial certification is a statement to the level of safety implemented on board. It is also a tremendous benefit when the time comes for her resale. Compare it to used car sales. Does one have a higher level of confidence when purchasing a certified, pre-owned vehicle, compared to the same car you saw down the road at someone’s house? Unlike a private yacht, commercial yachts are inspected annually. This promotes continual improvement and assures a consistent standard. Commercial certification provides a third-party, objective view of the condition of the yacht.

Too much paperwork
Too much paperwork is the most popular response. Running a yacht is a business. No company today can be operated without some type of management system or operating procedures. If a yacht is not run with such a system, then it is not functioning correctly. However, too much administration can be an indication of micromanagement or inexperience. If a captain and crew are being inundated with paperwork, then something is wrong. A simple and professional administrative system, when implemented properly, will save any yacht, either private or commercial, a considerable amount of money. Operating a commercially certified yacht does not create paperwork disproportionate to its advantages.

Manning
Depending upon the flag of registry, manning can be an issue. If the yacht operates under a national flag, such as the United States, cabotage laws require that the yacht is manned with U.S. citizens and no more than 25-percent legal residents. Open registries, such as the Cayman Islands and Marshall Islands, allow for certain countries on the IMO-approved STCW Code “white list.” This permits a more international crew. Remember that certification discussed here is different from qualification. Licenses, certificates, and the standards enforced by the STCW Code are just that, an internationally recognized minimum standard. Officer licenses and crew training certificates are not a guarantee of quality. Quality comes with experience. Personnel certification on a commercial yacht is a must, but why would an owner utilize someone that has not met a minimum standard?

The yacht is not classed
Not being classed has always been a huge hurdle for yachts wanting to achieve commercial certification. There are many well-built and maintained yachts that, because of their hull construction or age, are not able to meet the standards of a classification society’s rules. The costs for putting a yacht “in class” can also be substantial, not to mention the time involved. The prerequisite for a yacht to be classed is a requirement of the UK Maritime and Coastguard Agency’s (MCA) Large Yacht Code. This safety code is a national standard for British yachts only. It is enforced by the red ensign flags (United Kingdom, Cayman Islands, Isle of Man, Bermuda, etc). While highly popular and internationally recognized, a MCA classification is not the only option for a yacht. Several other flags have their own commercial yacht codes. Currently, the most popular option involves the Marshall Islands, while others include the St. Vincent & the Grenadines, Belize, and Malta. These non-red ensign yachts are also commercially certified and receive the same rights and privileges. They are not certified as MCA solely because they are not British flagged.

Most notably absent from the above list is the United States. With such a large fleet of yachts, one would think that they have a yacht code. This is not case. The United States does not have a large yacht code or similar standard. Regulations for U.S.-flagged yachts are intertwined with those for merchant ships in the Code of Federal Regulations (CFRs). This creates a very difficult situation for yachts that want to trade internationally.

It is equally important to note that other flags’ yacht codes have recognized the many unclassed, but excellent yachts that previously could not operate commercially. Their codes allow for certain unclassed yachts to be certified as a commercial yacht. This is particularly true for yachts below 500 gross tons. While not as well-known or marketed, these non-UK national standards for commercial yachts are equivalent and equally recognized internationally. The options are there, they only need to be researched.

Many people can attest that achieving commercial certification for a yacht is a difficult process. Some have the opinion that maintaining the certification is an even higher task. Commercially certifying a yacht has traditionally been a taboo subject for all but the largest of yachts seeking to charter. Breaking the chain of incorrectly passed-down verbal history of “impossibility” is imperative to elevate the quality standard within our industry to the next level.

 

Malta offers great diving, deep harbors

Malta offers great diving, deep harbors

 

 

Malta is a southern European island country comprising an archipelago in the Mediterranean Sea. It lies 50 miles (80 km) south of Italy, 176 miles (284 km) east of Tunisia, and 207 miles (333 km) north of Libya. The country covers just over 122 square miles (316 square kilometers) and has a population of just under 450,000, making it one of the world’s most densely populated countries.

The capital is Valletta, which, at 0.8 square kilometers, is the smallest national capital in the European Union.

Malta’s location has historically given it great strategic importance as a naval base, and a succession of powers, including the Phoenicians, Romans, Moors, Normans, Sicilians, Spanish, Knights of St. John, French and British. Malta was admitted to the United Nations in 1964 and to the European Union in 2004. In 2008, it became part of the Eurozone.

Malta is a popular tourist destination with its warm climate, numerous recreational areas, and architectural and historical monuments, including three Unesco World Heritage Sites, and seven Megalithic temples, which are some of the oldest free-standing structures in the world. If old churches are of interest, Malta has 365 of the most exquisite churches, one for each day of the year.

Malta has three large natural harbors on its main island:

  • The Grand Harbor at the eastern side of the capital city of Valletta, has been a harbor since Roman times. It has several extensive docks and wharves, a cruise liner terminal, as well as a number of marinas. Grand Harbor Marina accommodates the largest yachts. It also has a terminal that serves ferries that connect Malta to Pozzallo and Catania in Sicily.
  • Marsamxett Harbor on the western side of Valletta has a number of yacht marinas, Manoel Island Yacht Marina being the largest, able to accommodate yachts to 80m. It is centrally located in Gzira so chandlery shops, shopping malls, supermarkets and tourist services are all accessible within a short walking distance. In the vicinity, one also find numerous restaurants, bars and convenience shops.
  • Marsaxlokk Harbor (Malta Freeport) at Birżebbuġa on the southeastern side of Malta, is the island’s main cargo terminal. Malta Freeport is the 11th busiest container port in Europe and 46th busiest in the world.

There are also two manmade harbors that serve a passenger and car ferry service that connects Ċirkewwa Harbor on Malta and Mġarr Harbor on Gozo. There is a marina in Mgarr that accommodates smaller yachts to about 22m.

Depths are not an issue in and around Malta. Anchoring is difficult, though, as depths reach 40m and more just 4.5m from shore.

Malta is a huge dive destination for Europeans. There are many artificial reefs made by sunken ships and numerous cave dive sites. Although the waters are extremely clear, do not expect as much coral and sea life as one would see in the Caribbean. Many seaside resorts in crystal clear water-bays surround the islands.

The food generally has an Italian influence and in most places, one can order in Italian language, as it is the third unofficial language, after the official languages of Maltese and English.

Fishing is not one of the islands’ advantages, as we found out on our research. Most fresh fish is from multiple floating farms strategically placed around the islands. Beware of them as they are moved around and may cause navigation hazards.

There are plenty of other things to do and one should tour all three major Islands, as each has different things to offer.

Visitors total about 1.5 million a year, so traffic can be unpleasant. Local transportation, on the other hand, is organized and affordable.

The aspiring yacht owner – Tips to avoid pitfalls

Yacht Ownership

In an ideal world, the aspiring yacht owner would walk down to his nearest marina, hand over his cash and take possession of his shiny new vessel. Cruising the waves as much or as little as he liked with little additional costs. Unfortunately, when it comes to purchasing and owning a yacht, life is not so simple!

Yachts come in various shapes and sizes, from a 30ft sailboat, up to extensive luxury motor vessels capable of accommodating and entertaining large groups of people for long periods at sea. Obviously, the latter category will come with a considerably higher price tag and ongoing running costs. Buying a yacht of any type or size is a major acquisition, and just like the purchase of any other major asset, should be well thought through and planned out to avoid a number of potentially expensive pitfalls.

Financing

Perhaps the first question to answer is how to pay for your yacht in the first place. The first decision to be taken is whether you wish to buy your vessel outright or whether a structured funding solution could bring substantial additional benefits. Loans are widely available from banks, many of which now have dedicated marine finance teams or from a specialist marine finance company. Structured solutions can be arranged via trust companies and special purpose vehicles, which tend to be the domain of fiduciary and corporate services specialists.

One of the most common ways of financing a yacht purchase is by taking out a mortgage on the vessel. Yacht mortgages come in various flavours to suit an individual’s particular needs. As with a house, a plain repayment mortgage would enable the buyer to pay off the principal and the interest at the same time over a defined period. The disadvantage, of course, is that interest rates can rise as well as fall so that there is no certainty as to what future monthly repayments may be. However, some lenders offer time-limited interest-only yacht mortgages. Here payments will cover the cost of interest for a certain period – for example, 12 months – with the facility then reverting to capital and interest repayments for the remaining term.

A more creative solution could lie in using a trust, a company which owns the yacht, the asset can be made to work through a chartering programme, for example. A special purpose vehicle will be established to hold a deposit for the yacht which is held as a security against future loan repayments. These funds can be held on deposit and so will grow with interest. At the same time, revenues from chartering feed into the ownership company which then funds the purchase of the yacht. Revenue from chartering could substantially pay off the yacht costs within two to three years on this model. As a result, the owner would achieve a far more effective and profitable outcome.

It is also important to ensure that all the appropriate legal requirements are followed once you have made an offer. Rules vary from country to country of course.

It is also important to make clear within this contract that the vessel will be sold subject to finance approval, and if the boat is second-hand, subject to a satisfactory survey and valuation.

Insurance

You will also be required to have insurance in place before the loan can be approved and issued. Just like insuring against any other risk, marine insurance policies come in many shapes and sizes depending on the level of cover required, and evidently, this will be reflected in the level of the premium.

Running Costs and Other Considerations

Overall running costs are likely to equate to around 10% of the value of the vessel each year. There will be a range of costs to consider, the most obvious of which are maintenance and repair costs. You will also have to pay an initial and ongoing annual fee to have your vessel registered in the jurisdiction of your choice. Fees may vary depending on the vessel’s size and its intended use (whether it will be used for leisure or commercial purposes for example). Fees also vary from jurisdiction to jurisdiction.

Furthermore, there may be significant other costs to bear depending on the size of your vessel and how you intend to use it. The chances are that the larger the vessel, the less likely it is that you will be sailing it yourself, so you will need to hire a skipper. The more substantial and luxurious motorised yachts might also require a crew, so this brings employment law and employee rights into the equation, as well as extra costs.

The ongoing responsibilities of owning a yacht are, then, manifold, and could overwhelm even the most diligent yacht owner, particularly if the vessel is moored in one jurisdiction and registered in another. At this point, it is worth considering contracting the services of a yacht management company, or a corporate service provider specialising in marine services. These companies are present in most of the popular yachting locations as well as in jurisdictions with yacht registries. They will assume many of these responsibilities, such as completing the necessary paperwork to register your vessel, ensuring that is maintained, and taking over the hiring and paying of the crew. Using a management company also allows yacht owners to utilize alternative ownership structures which may mitigate the initial and ongoing costs associated with buying and running a yacht, some of which are described next.

When you eventually sell your yacht,  costs associated such as VAT payable depends upon where the sale is executed.

Corporate Ownership

While it is perfectly possible in most cases to register a yacht in one’s own name as an individual, there are many disadvantages to doing so; indeed, it is certainly the case that the vast majority of owners choose to transfer their ownership to some form of corporate entity or special purpose vehicle. For example, by using an offshore company to own, run or charter a yacht, it may be possible to take advantage of low rates of corporate tax and reduced rates of VAT on offer in certain jurisdictions. Furthermore, using a company form has certain other benefits in terms of protecting the owner; confidentiality being one of them and limiting the liabilities that may arise in connection with ownership of the vessel being another. If confidentiality is a high priority for the owner, an additional option is the use of a trust company.  The owner (settlor) would transfer the asset to the effective ownership of a trustee, who then manages it for the benefit of the beneficiary.

Fractional Ownership

One of the major pitfalls of ownership is that yachts are a depreciating asset which might only be used a few weeks of the year by their owners. Fractional ownership can mitigate some of these cost factors by effectively dividing the costs of ownership among a limited group of people, each of whom owns a ‘fraction’ of the yacht. Fractional ownership entitles you to use the vessel for a set amount of time each year, and fractional schemes are usually run by yacht management companies. In return for a fee, the management company will take on the day-to-day responsibilities of maintaining the yacht as described above. The disadvantage is that the yacht cannot be said to be truly ‘yours’, and you might not be able to use it when you want.

Chartering

Another way to offset the costs of yacht ownership is to charter your boat to other users, usually through a yacht management or charter company. This enables you to earn income from your yacht while you are not using it by renting it out to others for certain periods of time. How much income you ultimately earn from chartering your yacht will depend on the type of agreement you have with the chartering company. Under some agreements, the income is split equally between the yacht owner and the charter firm. However the owner typically still pays ongoing running costs. Alternatively, it is possible to agree to receive a guaranteed income every month, regardless of how often your boat is chartered out. This reduces risk, but owners may be restricted to a certain number of weeks each year when they can use their boat. And while chartering may be an attractive way to defray the costs associated with yacht ownership, there could well be tax implications in your country of residence on the income you receive.

Leasing

By using a leasing arrangement, the bank or finance company buys the yacht from the seller and then leases it to the buyer. With this type of financing deal, the buyer does not actually legally own the asset but is instead granted possessory interest. The advantage, though, of using this type of arrangement is that one is not locked-in to ownership, and is able to walk away at the end of the lease term without having to worry about maintenance or selling on a depreciating asset. On the downside, monthly lease payments tend to be higher to take account of depreciation, and the lease owner has to front the risks associated with owning and operating a yacht such as liability for loss in the event of damage.

In Summary

While buying a yacht may appear on the surface to be a simple transaction, there are in fact many things to take into consideration before taking that plunge. Which route to ownership is ultimately taken will, of course, depend heavily on a person’s circumstances, such as their own financial standing, where they live, and how they intend to use their boat, among other things. Thankfully, there is a growing community of professionals in this field which can steer yacht owners onto the right course and take much of the hassle out of the ownership experience.

 

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Do you need a yacht management company?

A yacht is a big investment as well as a source of fun and adventure. But yachting is not always easy and presents its own set of challenges.

Often captains serve as the lead management executive, hiring the crew, keeping the books and managing the technical aspects of the yacht. But an owner moving up in class may find the added layers of regulation and compliance strain the resources and time of the vessel. S/he will no longer have the time, or the administrative resources to navigate through contracts, legal hurdles, insurance options, regulations, crew management, charter management, logistics and the myriad of details associated with building, repairing or ownership. Therefore a yacht management company will take the day-to-day burden and responsibility of running the yacht away from the owner. More importantly, yacht management is there to respond to urgent situations and emergencies around the clock, and to provide advice to the owner and crew.

Yacht management companies also provide emergency support, guidance on local and international regulations, run the yacht accounts and finances, create technical proposals and liaise with third parties.

Professional shore-based yacht management can be a welcome relief.

Administration of a yacht, managing its safety, paying suppliers, managing crew and charter agents is a full-time job.The larger the yacht, the more likely it is for such services to be contracted out. This will allow the captain to focus on its safe and smooth operation.Yacht management comes in many shapes and forms depending on an owner’s individual requirements. Owners may decide to hire a small firm or individual experts to handle a set of different elements.Owners may choose a full or partial package from a yacht management company or take à la carte yacht services.

What makes a good yacht management company?

It is establishing the fine line between managing the vessel according to the safety, class and fiscal regulations and bringing all components together to enable the vessel to be seaworthy and operative at all times for the benefit of the owner and charterers from one side and the crew and captains on the other.

Which factors are important when choosing a management company for a superyacht?

  • EXPERTISE: The experienced staff and expertise of master mariners, naval architects, marine engineers, accountants, administrators, recruitment and human resources specialists, as well as in-house IT staff. If a management company does not have on-staff expertise in a specific area, it often has relationships with specialists who do.The efficient and timely administration of a large and complex yacht operation involving taxation, financing, technical, crew, safety, security, complex corporate structuring, accounting/budgeting and suppliers can undoubtedly when delivered by knowledgeable and well-resourced experts, save the owner and captain enormous amounts of time and expense.
  • RESOURCES: The resources available to be able to deliver quality and the smooth running of the yacht.
  • PACKAGES: The fees and packages offered tailor-made to the yacht needs. Length of contracts, duration, the type of services as well as the expertise needed varies. Each yacht is unique.
  • REFERENCES: The referrals and obtaining them before committing is vital.Do ask for several references from other owners, captains, suppliers, industry leaders, etc., at the outset of discussions and specific to the service you are interested in.
  • COMMUNICATION: Division of labour should be clearly defined to avoid duplication of work and unnecessary expenses. Impartiality and communication between parties are key.Regular communication in order to ensure that all parties are working toward the same goals; working closely together is the only way to make it work. The most productive relationship is friendly, professional and respectful. And that needs to come from all parties.
  • CLEAR ROLES: The captain and the management company should work together very closely as a team. The captain has a lot of say regarding what happens on the vessel including maintenance and daily aspects, whereas the management company deals with the bigger picture of the accounts and budgeting, owning company, registration and relationship with the owner. Each position comes with its own responsibilities and authority. Good management companies have defined the responsibilities and authority of everybody involved both ashore and afloat. The captain, because of his position, will always have extensive authority to make decisions with regards to the running of the yacht.

Focus should be on the best fit , experience together with obtaining references. Knowledge is power. Insightful and accurate information from respected sources is necessary.

Benefits of working with a yacht Management Company

  • Working with a good yacht management company gives the owner confidence in knowing that the vessel is operating safely and legally on all fronts. The Yacht management company will also reduce the risk of any oversight.
  • Management companies also give access to owners with information about the rules and regulations, PSC visits and audit findings etc through circulars and reporting.
  • Provide a second opinion on any challenges, ideas and procedures that the vessel may be experiencing.
  • Sometimes Owners do not reply to requests or are not reachable when a decision needs to be made. At that time it is the Captain and yacht manager who can make decisions collectively, and the responsibility of this is not on a single person. There may also be topics that Captains cannot discuss with the crew and it is good to have a yacht manager to discuss various options with in order to find the best solution to an issue or situation, before agreeing on a solution or recommendation to the Owner.
  • An advantage of working with a management company is that the Owners often do not know yachting operations as well as a yacht manager or Captain, so management support Captain’s requests. Even more provides Owners with required assurances, supporting decisions.

If the three parties Captain, Owner and Manager positively communicate accurate information it will be of mutual benefit for everyone , working towards the same goals. Which is for the owner to enjoy the yacht as much as possible, safely, at the highest standard and within budget.

Management of charters

The decision to register and operate commercially and offer the yacht for charter can add layers of complexity, regulations and expense, despite the rewards charter revenue may bring. A management company may, in the long run, be of value saving time, hassle, mistakes and unnecessary expense, especially for the first-time yacht owner.

Chartering is governed by a more complex set of regulations to safeguard crew, passengers and the environment than yachts registered for private use.In the same way that owning the yacht via a corporate structure protects the beneficial owners in regards to liability protection and taxation issues, having a suitably qualified management company in place, with clearly defined roles and functions, supports the operation of the yacht and assists in ensuring that the yacht is ready for charter at the required times and locations.

ASSET V YACHT MANAGEMENT

Owning and managing a luxury yacht is an increasingly elaborate business. Our management team is comprised of highly qualified personnel who can offer support and advice to yacht owners and their captains to ensure that the yacht is being maintained, administered and operated to the highest standards.

OUR ROLE AS YOUR YACHT MANAGER

You can be assured that our staff will work with you and your team to make sure that the yacht is operated safely and efficiently.

WHY ASSET V SERVICES

Asset V offers a full range of superyacht management services capable of handling the full spectrum of large yacht operations, allowing us to individually tailor the specific support and services needed by the Owner. From financial reporting to the supervision of yard time, our team has the specific knowledge and experience to deliver the highest support. Effective checks and balances, both operationally and financially, give the Owner peace of mind that the yacht and crew are operating safely and efficiently. The Yacht Management team will operate with the utmost integrity and ethics, assuring transparency in all aspects of the vessel.

Our yacht management services preserve your investment and make yachting more fun.

Contact us to learn more about how our yacht management services can improve your yacht owning experience.

Some of the services Asset-v can provide include:

  • Safety management (ISM and ISPS)
  • Crew management and recruitment
  • Operational support
  • Technical management and support
  • Financial control and services
  • Certification and compliance
  • Administration (recruitment and training)
  • Project Management (repair and refit)

As a yacht management company, we are selling our expertise, time, systems and also the responsibility that we take on our shoulders. As a management company we provide services that help both the crew and the owner in the running of the yacht; whether this is financial, operational, crewing, technical or flag and class compliance.

YACHT REGISTRATION IN MALTA: BENEFITS AND PROCEDURE

Maltese or European citizens and any company registered in Malta or in a Member State of the European Union may register a yacht under the Malta flag.  The use of a Maltese company is the preferred method of trading.

The yacht registration procedure is efficient and straightforward, and certificates are issued promptly in the name of the registered owners upon submission of the necessary paperwork. A provisional Certificate (Yacht Registration Certificate) is normally issued until all paperwork has been confirmed in accordance with the Maltese and International laws and regulations.

The mortgage system is straightforward and the Maltese flag authorities ensure clarity and correctness.

Once successfully registered under the Malta flag, a yacht can also benefit from the excellent international reputation of the flag, which is further enhanced by Malta’s membership within the European Union.

Malta flag regulations provide for:

  • No restriction on the nationality of persons involved in the ownership
  • No restriction on the nationality of the persons manning of the vessel
  • No restriction whilst sailing to any ports worldwide

Any yacht registration in Malta may be obtained further to an expeditious and straightforward procedure within a timeframe of 48 hours from receipt of the required documents. This registration will be provisional until the Maltese Registrar of Ships is furnished with documents proving the ownership of the yacht, a deletion certificate (from the previous non-Malta yacht register, if any), a certificate of survey and other technical documents as the case may be.

To register provisionally the following documents will be required:

  • An Application to Register the Yacht in Malta
  • A Declaration of Ownership
  • An Application requesting a Radio Licence
  • A copy of the International Tonnage Certificate (if the commercial yacht is over 24m in length)
  • Technical details as may be the case

The provisional registration will be valid for 6 months, within which period the applicant must fulfill the formalities prescribed by Maltese law for a permanent registration in Malta.

Upon completion of the Malta registration process, a Certificate of Malta Registry will be furnished. This document will constitute proof of the successful registration procedure under the Malta flag, as well as proof of title to the yacht.

Running a yacht is not a part-time job: Yacht Management

Boats are inherently needy machines. Quality time on the water rarely comes without at least a moment of thought for their own care and needs.

Owning a yacht can take on characteristics of running an international business. For some, a competent corporate accountant and a talented captain may be able to manage the program, but for many, at least some level of professional shore-based yacht management can be a welcome relief.

Administration of a yacht, managing its safety, paying suppliers, managing crew and charter agents is a definite full-time job.The larger the yacht, the more likely it is for such services to be contracted out. This will allow the captain to focus on its safe and smooth operation.

Yacht management comes in many shapes and sizes depending on an owner’s individual requirements. Owners may decide to hire a small firm or individual expert to handle one element. such as regulatory compliance, and another for charter management.

A number of firms, large and small, offer the full lifecycle of management for every aspect of ownership, beginning with an owner’s decision to building a new yacht and ending with its sale.

Therefore yacht management services, need to be tailored to each owner’s specific needs and can include operations support, technical management, safety management, security management, crew administration, emergency response, insurance administration, the creation of offshore crew employment structure, financial management and technical consultancy.

Owners can choose a full or partial package and even take the yacht services à la carte. For owners the decision to register and operate commercially and offer the yacht for charter can add layers of regulations and expense, despite the rewards charter revenue may bring. A management company may, in the long run, be of value saving time, hassle, mistakes and unnecessary expense, especially for the first-time yacht owner.

Chartering is governed by a more complex set of regulations to safeguard crew, passengers and the environment than strictly private use.These regulations can pose significant liability on the owners of the yacht, the captain and crew. In the same way that owning the yacht via a corporate structure protects the beneficial owners in regards to liability protection and taxation issues, having a suitably qualified management company in place, with clearly defined roles and functions, supports the operation of the yacht and assists in ensuring that the yacht is ready for charter at the required times and locations.

So how exactly does a yacht management company work?

If a management company does not have on-staff expertise in a specific area, it often has relationships with specialists who do.

For regulatory compliance, for example, a company that specialises in ISM and ISPS (International Safety Management Code/International Ship and Port Facility Security Code) management and MLC (Maritime Labor Convention) compliance, would be needed.

So who’s coordinating all the details if not a management company?

Often captains serve as the lead management executive, hiring crew, keeping books and managing the technical aspects of the yacht. But an owner moving up in class may find the added layers of regulation and compliance strain the resources and time of his captain. Some owners then use accountants or managers within their businesses and software to coordinate those activities in conjunction with the captain.

Management fees

The cost of employing a management company can vary widely, depending on many factors including the yacht’s size and the level of services rendered. Companies may offer a fixed-fee charged quarterly, monthly, or annually, or can charge all disbursements and external charges at cost with fees being charged on time-spent.

There is no hard-and-fast rule.

The efficient and timely administration of a large and complex yacht operation involving taxation, financing, technical, crew, safety, security, complex corporate structuring, accounting/budgeting and suppliers etc, can undoubtedly when delivered by knowledgeable and well-resourced experts, save the owner and captain enormous amounts of time and expense.