Impact of COVID
It is simple. There are no more assets for sale on the market. Prices have gone up and will continue to do so.
The industry needs to become creative.
Some companies have started to think about virtual yacht twins so not to lose clients who have ordered or want to order new builds. Co-ownership is again considered. We are not sure that this will work in the yacht market though where yachts are used for enjoyment and fun and not for transport. Yacht owners are probably not ready to lose the flexibility in the way they use their yacht.
When jets are more and more used for pure transport and to gain time and money, yachts are at cross-roads as far as their use is concerned. As a consequence of Covid more and more owners use yachts to isolate or to live real experiences; ie expedition and research trips.
Russian sanctions
There are differences between frozen, seized and confiscated assets, but there are still some blurred lines, and challenges will be made on the legality of measures taken. Sanctions are not harmonized across all countries.
Flag, class and insurance has withdrawn for yachts ultimately owned by sanction listed Russian owners. In practice are the sanctions already being extended to all Russians?
How can legally employed crew be paid and repatriated when bank accounts are blocked? Whilst some are considering crypto payments as a work-round, new sanctions are including darknet markets & virtual currencies.
What’s next? Do we have all answers? Not really. We advise extreme prudence. One thing is sure lawyers will become extremely busy in this area.
VAT
As far as VAT is concerned, countries are slowly moving towards a more harmonized approach on the way they calculate VAT on short and long term charters, fuel and APA even though some differences still exist.
The Malta and Monaco deferral programs are still there and interesting options to consider for private yachts.
Greece might finally open its market to foreign yachts and make it easier for non-Greek registered yachts to charter in their waters. Let’s see!
Italy, Croatia and Spain are working on approving the YET programs which are for now available under Marshall Islands, Cayman Islands and Bermuda and officially allowed with departures from Monaco and France.
And Malta remains a popular jurisdiction whether private or commercial yachts are concerned.
Key words of the future
The word of our future is definitively: SUSTAINABILITY (which encompasses technology and hydrogen) and each one of us has a role to play!
Better cooperation, communication, more professionalism and transparency are also key for a brighter future.
The need to develop trainings for the crew, risk and cyber risks assessments, the need to better apprehend the stress factor, the lack of management and leadership skills and awareness are to be considered as well.
Owners also need to be educated as too often they do not understand what owning, operating and maintaining a yacht or a jet means and the real costs involved. This can create some frustration and deception especially for a first time buyer. The whole acquisition process can quickly be considered as too complex and scary.
SEEK ADVICE.
For more information, please contact Janet Xanthopoulos: j.xanthopoulos@rosemont-yacht.com
This article was originaly published on Monaco Seaside, the exclusive port magazine in Monaco.