There are many flag state options available with varying regulations and there can be significant tax and crew employment advantages depending on the jurisdiction chosen. Choosing a registry that has a worldwide reputation for efficient management and administration and political stability is a part of the smooth running of any vessel.
To do otherwise can have a detrimental effect, as a yacht flying a flag that does not have a good reputation may be targeted by Port States and Customs. Lenders and insurance companies will also review ‘flag state’ compliance with international regulations and this can affect the decisions of lenders and underwriters.
Key factors to take into consideration when selecting the flag state are:
> The place of residence of the owner;
> Area of navigation (EU, non-EU, areas of the EU where specific rules apply, eg Spain and Greece, USA, Asia);
> Use of the yacht – pleasure, commercial or a combination of both;
> Characteristics of the yacht (date of build, length, tonnage, conformity with any commercial code, and international conventions;
> VAT/tax status of the yacht;
> Place of delivery;
> Nationality of the crew;
> Finance arrangements (marine mortgage, loan or leasing).