5 things affecting the global yacht industry
Here at Equiom we’re already looking forward to the yachting season. As we kick off 2020, themes such as Brexit, European leasing options and choice of flag state remain to be regular topics of discussion. Here are some of the lesser debated, but equally significant topics that we anticipate will affect yacht owners this year.
1. Emissions law changes: The International Convention for the Prevention of Pollution from Ships (MARPOL) limits the air pollutants emitted from vessels. From January 2020 the global sulphur limit reduced from 3.50% to 0.50%. This is impacting many yacht owners as they make changes to ensure they remain compliant.
2. Cybersecurity on yachts: Increasingly complex technology on superyachts is making them more vulnerable to attacks. This, combined with the use of personal mobile devices by the owner, crew and charter guests is a compelling reason for yacht owners to review their cybersecurity and seek advice where required.
3. Insurance for yacht owners: Yacht owners will have noticed an increase in premiums for insuring their yacht. This comes as a result of under-priced premiums offered for many years as well as the growing threat of major losses due to both natural catastrophes and human error. Insurers are having to increase the premiums to a realistic level to account for the risks attached to insuring very high value assets. Others are even leaving the market. It is essential for owners to gain the right sort of insurance cover from experienced specialist providers who understand the complexities of superyacht ownership. The increase in cost of yacht insurance may cause owners to shop around but they should be careful not to cut corners.
4. American yacht owners: With the exponential rise in American superyacht owners, there is a changing dynamic in the market as many Americans are selecting European yacht builders over their US counterparts. It means that these owners will need to consider matters such as establishing appropriate ownership structures in Europe, potentially significant customs tariffs on importations to the US and comply with the recognised regulations surrounding European chartering if that is the chosen route.
5. Yacht chartering: There are many rules around taxes and legal charges that relate to yacht chartering in Europe which can be confusing for yacht owners. Taking Spain as an example, for any embarkations or disembarkations of charter guests in Spanish waters there is a requirement that charter licences be held for both mainland Spain and the Balearic Islands. For charters starting from either Italy or France, there are changes that are to be introduced for charters that commence after 1 April 2020. The reduction of VAT charged for charters that access international waters is being removed and VAT will be due on the full VAT rate in France and Italy. VAT relief will be allowed for sailing in international waters, but this will be based on time spent outside territorial waters. The guidance for determining this criteria is still to be released by France and Italy, so it is worth keeping track of this.
With a dedicated team of 20 highly experienced yachting professionals delivering a wide range of services, from assistance with the smallest of tasks through to full service packages, Equiom’s multi-jurisdictional yachting team supports yacht owners on all of the above.
