It is an accepted truth that periods of economic downturn give rise to unique and interesting commercial opportunities. This principle continues to hold true in the current economic climate, the fact of meagre credit stores notwithstanding, since there are still some people who are immune to the fallout from the credit crisis. Many yacht purchasers are still moving ahead with their acquisition and particularly so, those at the ultra-luxury end of the spectrum. In fact, there are new ultra-luxury manufacturers opening their doors for the first time under what would seem to be fairly grim economic circumstances. For some in the industry, it is, therefore, business as usual, and the issue of where to flag remains of much significance.
With a stable political system, a reputation as the premier tax-neutral offshore corporate domicile, and a Category 1 Branch of the General Register of British Ships, the British Virgin Islands is well poised to cater to the needs of the discerning yacht broker, owner, financier and manager at every level of yacht ownership – from the small catamaran to the luxury superyacht. The BVI’s Category 1 Register is able to accommodate the registration of mega yachts measuring up to 3000 GT, and cargo vessels of unlimited tonnage. Incidentally, the BVI is also home to a US Federal Aviation Authority Category One aircraft register under the International Aviation Safety Assessment programme making the jurisdiction a true “one-stop shop” for offshore company, ship and aircraft registrations. We can boast of the ease and speed with which one is able to, for example, incorporate a BVI Business Company or register a yacht under the BVI flag (both within 24 hours), and the flexibility that is statutorily engineered into the BVI Business Company making it attractive to, among others, owners, lenders and asset managers alike.
Registering a yacht under the BVI flag is a simple, quick and pain-free process. For first registrations, an application must be made to the Registrar of Ships using readily available prescribed forms. To prevent name duplication, the proposed name of the yacht must be approved, and the yacht must be surveyed by a marine surveyor from an approved classification society or one appointed or authorised by the Registrar, so that he may prepare a Certificate of Survey/Tonnage Certificate in respect of the yacht. The proposed owner must also be qualified to own a BVI-flagged yacht, and a BVI company is typically incorporated for this purpose. To prove incorporation and existence, the company’s Certificate of Incorporation together with proof of title by way of a Bill of Sale, Builder’s Certificate or other evidence of ownership would need to be submitted along with the application. Once the Certificate of Survey/Tonnage Certificate and documentary evidence of title are available, the application is prepared using the prescribed forms. A form known as “Appointment of Authorised Officer” must be executed by the owner naming an individual who will make the application for registration, and sign the application documents on the owner’s behalf. The Appointment of Authorised Officer authorises the individual to sign the forms and documents that are required for the application, being, the Application to Register, the Declaration of Eligibility, Appointment of Representative Person, the Notice of Proposed Name and a letter or certificate addressed to the Registrar confirming the proposed use of the yacht (whether for private pleasure or commercial purposes). An “Undertaking to Act as Representative Person” is required to be signed by the person appointed as such by the owner of the yacht.
Once all required documents (together with the applicable fees) are provided to the Registrar in good order, an Official Number is assigned to the yacht, and the Carving and Marking Note (C&M Note) is issued to the applicant. The C&M Note is produced within 24 hrs of submission of the application to the Registry, and reflects the yacht’s Name, Port of Registry, Official Number and Registered Tonnage, which are to be carved/marked on the yacht in accordance with the instructions in the C&M Note. A marine surveyor is required to complete the C&M Note certifying that the yacht has been marked/carved accordingly. When the original completed C&M Note has been returned to the Registry, the Registry produces the Certificate of British Registry (Blue Book) thereby completing the registration process.
As a consequence of our significant expertise in BVI shipping law and practice, we at Harneys have developed an attractive portfolio of wealth management and asset-holding tools, which, when coupled with the commercial sensitivity and breadth of experience of our industry-leading professionals, create the perfect counterpart to the BVI’s offerings as the offshore financial services centre of choice for, inter alia, company formation and yacht and aircraft registrations.