A marine vessel such as a yacht is a substantial asset for any private investor or company. With this in mind, it is imperative to obtain the expertise of a professional with the experience and in-depth understanding in the acquisition and management of luxury passenger vehicles.
Yachting services is a complex process consisting of many steps.
Yacht registration and Flag Selection
Damalion can help you register a yacht, either for commercial or recreational purposes, as well as manage the entire process. The registration of a yacht in Luxembourg will largely depend on the primary use of the vessel. Every flag state in the European Union has different boat registration requirements. If you are looking to register a brand-new or pre-owned yacht, a consulting company will determine the costs of registering your marine vessel and discuss the advantages of every available flag that you can choose from. In the case of registering in Luxembourg, a consulting company will discuss the registration process and seek experts that will streamline the process for you. Successful registration guarantees that your vessel is regularly maintained in a safe and legal status.
To be operated legal on rivers and seas, a yacht must undergo proper registration in Luxembourg. Identification of a yacht is also a preliminary step requirement before commercial or recreational use.
All marine vessels, including yachts, must meet the following pre-requisites before the Register of Boats and Recreational Craft. Here are a few criteria when registering a yacht in the Grand Duchy:
- Length of at least 7 metres or more
- It must possess a habitable cabin
- It must possess an engine with a power output of over 7.35 kW or 10 hp
All watercraft that meet the conditions listed below will be identified and registered as a small craft:
- Length of less than 7 metres
- Does not possess a habitable cabin
- It must possess an engine with a power output of less than 7.35 kW or 10 hp
Corporate Yachting Services to a Ship-Owning Company
- Assistance in the purchase processing
- Advice and set-up of ownership structure of a yacht, including company incorporation, VAT, flag, etc.
- Creation and implementation of operational budgets, running costs, and planning
- Day-to-day bookkeeping
- Receipts and processing of invoices
- Cash-flow assessment and monitoring
- Periodic accounting and financial reporting of the owner or owner’s representative/s
- Financial statements
- Administrative assistance for existing operations
For the smooth management of your yacht, you need a consulting agency with a vast network of partnerships with professionals accredited by the Luxembourg Ministry of Economy, as well as partnerships with professionals with several flag authorities for vessels over 500 GT under the official Document of Compliance (DOC). Depending on the nature and frequency of operations, your vessel can operate under a wide range of International Maritime Flags, including Luxembourg as well as neighboring European Union member states and other popular yachting company destinations such as Marshall Islands, Cook Islands, and Cayman Islands. A consulting company has the ability to create a customised solution in the registration and management of your yacht.
Luxembourg Yacht Registration process entails the following steps:
- Natural persons from non-EU countries are deemed to submit a certified true copy of their nationality certificate and a copy of the yacht owner’s ID or passports.
- For legal persons, Articles of Association, and if needed, a relevant extract from the Trade and Companies Register.
- Deed of ownership and receipted invoice for the recreational craft.
- If applicable, all the information about a yacht’s previous registration in Luxembourg and a certified de-registration issues by all relevant authorities in the country where the watercraft was last registered.
- Certificate proving the existence of a civil liability insurance policy
- Certificate of Conformity with the European Union’s Directive 94/25/EC for recreational crafts built after 16 June 1998 and for water scooters built after 1 January 2006.
- Customs introduction or import declaration
Registration certificate issued by Luxembourg will be valid for five years. Provided all registration conditions are fulfilled, a registration certificate can be extended or replaced, if needed.
Other Yachting Management Services
Assistance with VAT Status
- Private status
- Commercial status or Charters and VAT exemptions
- Temporary European union Importations for non-EU residents
- Crew Services & MLC Compliance
- Maritime Management
- Technical Support
- Safety Management ISM/ISPS
- Emergency Procedures
- Flag State and external safety audit management
- Crew member training for safety rules and procedures
- Maritime Labor Convention 2006 and on-going board management
- Seafarer Employment Agreements, a compliance requirement for all crew members
- Issuance of payroll and payment of crew wages
- Formalities with the Social Security Administration in Luxembourg for private crew insurance purposes
- Crew training
- Logistics support
- Assistance in providing professional and qualified crew, including Captain, 2nd Officer, Chief Engineer, Chef-Cook, Seafarer, Stewardess, and many more
- Management of the ship’s administrative file, including renewals, surveys, and follow-ups
- Monitoring and maintenance of a yacht’s classification, scheduling, organization of classification inspections
- General support for social, legal, and technical matters
- Consulting on hull and machinery, as well as protection and indemnity subscriptions
- Insurance of yacht, with excellent premiums and insurance claims assistance
- Facilitate construction follow-up by a dedicated surveyor and maritime specialist
- Technical on-site visits onboard and reporting to the yacht owner
- Technical recommendations and assistance in organizing annual servicing
- Technical supervision of refits, repairs, modifications, or improvements made at the request of a yacht owner
New Construction Management
- Provide construction overview services for yachts being built in Luxembourg and international locations
- Setting up global projects based on a client’s expectations
- Advice on yacht construction contract and analysis of technical specifications, recommendations, and many more
- Close collaboration with all involved parties in yacht construction, including designers, shipyard, classification societies, and flag state surveyors
The guidelines for the Luxembourg yacht leasing scheme relates to a marine vessel’s use and enjoyment of lessees of yachts within and outside EU territorial waters. Leasing guidelines enumerate the manner in which a yacht is used for commercial and leisure purposes. The resulting ration will determine the overall Value Added Tax rate to be charged on the hiring of a yacht, the supply which will take place in Luxembourg.
The leasing guidelines are based on Article 59a of the EU Value Added Tax Directive, and relates that Value Added Tax shall be due on the portion of the lease where the yacht is effective used and enjoyed outside EU territorial waters.
Applicable Conditions of Yacht Leasing Guidelines
- Lessor must be a Luxembourg company and possess a valid Luxembourg VAT identification number
- Lessee must be a non-taxable person, and not used for commercial reasons
- A yacht leasing arrangement must be enforced between a lessor and lessee setting out conditions of the lease
- The yacht must be placed at the disposal of the lessee in Luxembourg
Prior lease approval must be sought from the VAT Department for the lessor to apply Luxembourg VAT based on the effective use and enjoyment provision:
- Lessor must uphold reasonable documentary or technological data to identify its actual use and enjoyment within and outside EU territorial waters
- Annual declaration must be submitted by the lessor to revenue authorities within a pre-determined timeframe
With many years of experience within the maritime business consulting industry, Damalion is a premier partner of many international investors for their yachting services needs. Our Damalion experts will work with you to understand the requirements in the formation and registration of a yachting company tailored to meet your need and operational requirements. Our yachting services include all aspects of yacht operations, including formation, registration, management, crewing, safety, leasing, and many more. For more information, reach out to a Damalion expert today.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.