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Vessels registration

Applying to foreign companies for such general purposes as trading, finance, holdings and other issues, it is worth to investigate one more advantageous concept that is registration of trade vessels and private yachts.

Advantages of vessels’ registration in offshore countries

Confidentiality of ship-owners

Confidentiality of ownership is one of the main benefits. If you own a boat or a yacht through a foreign company it protects your personality from third parties’ claims because all possible claims will be addressed not to your name but to the name of offshore company; besides any claims can be adjudicated strictly in the country of the vessel’s registration. By all means it minimizes both business risk in competitive struggle and insolvency, and individual complaints.

Implementation of process:

1. Registration of offshore company (or purchase of a ready-made company) with full nominee service in the country where you plan to register a boat / yacht.

2. Alternative types of vessel’s purchase:

a) vessel is purchased from producer factory or «second market» directly - maximum confidentiality attains because it is impossible to follow up connection between you and the boat / yacht;

b) you are the owner of the vessel and want to transfer it to offshore company’s ownership - to attain maximum confidentiality (make impossible to follow up connection between you and the offshore company) it is necessary to use additional protection levels, for example, trust schemes, chains of sequential deals, etc.

3. Offshore company bank account.

Tax advantages

Most offshore countries have favorable conditions for vessels’ registration as offer low costs for both registration and annual renewal registration fee. Commonly these specific conditions are also supplemented with such terms as direct tax exemption on any profit received from the vessel’s use and also (depending on the jurisdiction) exercise tax exemption (VAT) and customs duty exemption.

The procedure of vessel’s registration usually takes at about two weeks from the date of submitting all necessary documents.

It should be mentioned that in case of your decision to vend the boat / yacht, you will not sell the boat / yacht but will sell the shares of the offshore company which owns the boat / yacht. Hereof it allows avoiding new procedures or making changes in the Vessels Register about the beneficiary. And it is clearly that such sale does not involve tax consequences.

Which country’s flag to choose

To register a vessel and avoid additional formalities in future it is reasonable to use a geographical principle when selecting a flag the vessel will fly. A typical example is the EU water area where cargo can be carried only by vessels registered on the territory of the EU. One of such suitable countries is Gibraltar which combines advantages of offshore jurisdictions, Vessel Register under British flag of the 1st category and the EU membership.

Choosing a jurisdiction it is also necessary to take into consideration where possible claims will be addressed to and court procedures will take place and where defend will be most effective. In this sense The British flag is one of the most attractive because it is defended by British Consular Service and British Court Laws. One more advantage of the British flag (nowadays important in the worldwide because of pirates and use of high-technology weaponry) is that the Royal Navy provides high power protection for the vessels flying the British flag.

After the flag is chosen you choose a suitable country to register your vessel. There are several jurisdictions which allow registration of British flagged ships in the registers of different categories.

Table of the British flag jurisdictions

Jurisdiction Category of the register
Anguilla II
Bermuda Islands I
The British Virgin Islands II
The Great Britain I
Guernsey Islands II
Gibraltar I
Jersey Island II
The Cayman Islands I
Montserrat II
Isle of Man I
Saint Helena Island II
Turks and Caicos Islands II
Falkland Islands II

There are also offshore countries where registered vessel can fly the flag of the same country, i.e. Sent Vincent, Belize and some others.

Of course you will choose a jurisdiction depending on the amount of expenses you are ready to have. Among them there are such charges as the vessel’s registration, annual registration renewals, radio licence cost, and others. It is necessary to investigate the following:

  • Possibility of the vessel registration (shipping facilities, tonnage, age, type, etc.) with the particular country);
  • Possibility of certain registration type (running, under construction, charter agreement, purchased, ship mortgage, coming off a foreign register, used or second hand etc.) with the particular country);
  • Possibilities of surveyors’ examination by the surveyors admitted in the particular country;
  • Full list of the documents necessary to be provided for the registration in the particular country;
  • Possibility of temporally flag change and possibility of issuing special documents for subsequent charter agreements in the Russian Federation, etc.

Guide to Registration of a Yacht in the British Virgin Islands

A streamlined proceeding is based on the Merchant Shipping Act. The Act allows registering a pleasure ship up to 399 tons (vessels of II category in the British register) with little amount of documents to be provided upon the condition that the vessel will not be used for trading activity.

1. Surveyors’ inspection of the yacht, i.e. a professional estimation of the yacht cost is made by one of the surveyor companies or the surveyor who is authorized for such kind of activity. To avoid inquiries of additional documents for surveyors here is the list of the authorized surveyor companies for your safety:

  • American Bureau of Shipping
  • Bureau Veritas
  • Det Norske Veritas
  • Germanisher Lloyd
  • Lloyds Register of Shipping
  • Registro Italiano Naval
  • The Royal Yachting Association (For all pleasure craft up to 13.7 metres in length)
  • Yacht Brokers, Designers and Surveyors Association (For all pleasure craft up to 13.7 metres in length)

2. Application to register a yacht in the BVI Register, showing shipping facilities and 2 nominated names for the yacht to be registered in the BVI Register.

3. Application for authorized local agent appointment to run the procedure of registration (in case the applicant is a legal entity).

4. Additional documents to be provided:

  • Appointment of Authorized Officer;
  • Document of Title;
  • Deletion certificate from Foreign Registry;
  • Certificate of Survey etc.
  • Any documents used to support your application must be in English. The documents which are in a foreign language must be translated into English, accompanied by a notary and apostilled (beside the documents issued in the Great Britain).

5. Our company assists to prepare the following documents:

  • Approval of Name;
  • Application to Register a Ship;
  • Appointment of Representative Person and/or Manager;
  • Declaration of Intended Use of Vessel, etc.

6. Issue of a Carving and Marking Note

According to Merchant Shipping Act, Carving and Marking Note is an instruction fоr the vessel to be permanently marked and checked for tonnage and then inspected for verification with the Carving Marking Note (normally by The British Consular or Surveyor). When signed the document returns back to the Registry. It usually takes two weeks to receive the document.

7. Receiving a letter for the ship’s radio station.

To receive a radio licence the following forms must be submitted to the BVO licencing department:

  • Yacht licence;
  • Declaration or Certificate of the radio operator;
  • Contacts for Emergency.

8. Receiving of a Blue Book or Vessel Registration Certificate

It usually takes 2 days to issue a Vessel Registration Certificate from the date of a Carving and Marking Note return to the Register.