Buying • Selling • Building
Part 2
In this 12 part series Rosemont Yacht Services looks at key transaction issues in Superyacht Acquisitions, Superyacht Sales and Superyacht New Buildings, and considers how we can assist owners in the process.
Before You Make an Offer: 10 Decisions a Yacht Buyer Should Make First
The first five decisions
1. Intended use: private or commercial, or a combination permitted by the proposed operating structure?
2. Ownership: who should be the contractual buyer and eventual owner? who should acquire and ultimately own the yacht, and should an SPV be established before the offer?
3. Flag: which registry fits ownership, operation and finance?
4. VAT/customs: what is the yacht's documented status?
5. Delivery: where should legal delivery take place?
These are structural decisions. The offer should not inadvertently lock the buyer into an ownership, delivery or use model that later proves inefficient. For non-EU resident owners, including qualifying US, UK and Swiss residents, the intended use of the yacht in EU waters may also require consideration of Temporary Admission or other import arrangements before the delivery location is agreed.
The next five
6. Finance: engage lenders early if borrowing is contemplated.
7. Surveyor: select an independent professional with appropriate yacht experience.
8. Inventory: identify tenders, toys, artwork, spares and loose equipment.
9. Deposit: understand the stakeholder, KYC and release mechanics.
10. Coordination: decide who is keeping broker, lawyer, surveyor, bank, insurer, registry and administrator on the same timetable.
The offer should be the result of initial transaction planning, not the point at which planning begins.
Nomination and the identity of the buyer
A buyer may initially negotiate personally because the ownership company has not yet been incorporated.
That is workable only if the transaction documents allow the eventual SPV to become the buyer on acceptable terms. The parties should also anticipate that brokers, stakeholder, seller and lender may require fresh KYC on the nominated entity. The ability to nominate is useful, but it is not a substitute for deciding the intended ownership structure early.
For owners represented by a family office, the question is not simply which company should buy the yacht. The proposed SPV should also fit the family's wider ownership and governance arrangements. This can be particularly relevant for US, UK and Swiss families using trusts, foundations or holding structures across several jurisdictions.
The financing timetable
Even a financially straightforward owner can face a lengthy yacht-finance process. The lender must complete KYC and source-of-wealth review, assess the yacht and builder, obtain a valuation, approve the flag and ownership structure, review insurance and negotiate security. If the buyer waits until the survey has been accepted before approaching the bank, the contractual delivery date can become the problem.
Indicative finance should therefore be part of the pre-offer planning where borrowing is material.
Why the delivery place belongs in the offer
Delivery location can become surprisingly difficult to change once the commercial bargain has been agreed. It may determine where the sale legally occurs, what export or import evidence is required and how the yacht moves between registries. The buyer should therefore obtain tax and customs input before treating delivery as a purely logistical matter. If flexibility is needed, the offer and definitive contract should preserve it.
Where a point cannot be finalised before the offer, the transaction documents should preserve sufficient flexibility. Nomination rights, an appropriately described delivery area or conditions dealing with financing and documentation can prevent an early commercial agreement from forcing an unsuitable structure. The buyer should nevertheless avoid excessive conditions that make an otherwise attractive offer unnecessarily uncertain for the seller.
Preserve flexibility in the documentation
The ten decisions are most useful when considered together. A proposed commercial operation may point toward one flag but create additional VAT or crewing requirements; a lender may prefer a particular mortgage jurisdiction; and a delivery location chosen for convenience may complicate the intended customs treatment. The objective is not to find the theoretically 'best' answer to each question, but to design a combination that works coherently for the owner.
Do not treat these decisions independently
Once these ten points have been considered, the buyer is in a much stronger negotiating position. The broker can negotiate price knowing which delivery dates and locations are workable; the transaction advisers can ensure the proposed buyer and nomination mechanics fit the ownership plan; and the lender can comment on timing before the buyer accepts an unrealistic completion date. This does not make the offer unnecessarily complicated. On the contrary, good preparation often allows the commercial offer to remain simple because the buyer already knows which points genuinely require protection. It also reduces the risk of requesting late amendments after the seller believes the commercial bargain is settled.
From planning to negotiation
How Rosemont Yacht Services can assist
RYS can become involved before an offer is made, helping the buyer develop a coherent acquisition and ownership plan around the yacht’s intended use.
This can include coordinating the proposed ownership structure, flag, VAT/customs treatment, delivery arrangements, financing requirements and post-acquisition administration, working alongside the owner’s legal, tax, customs and other specialist advisers where required.
RYS can also establish the ownership vehicle and coordinate with the broker, stakeholder, lender, insurer, registry, surveyor and other participants so that KYC, financing, registration and administrative workstreams begin early enough to support the proposed transaction timetable.
Where some decisions cannot be finalised before the offer, RYS can help identify the points that need to remain flexible so that they can be addressed appropriately in the transaction documentation by the buyer’s legal advisers.
The objective is to ensure that the commercial offer fits the intended ownership and operating structure - not to redesign that structure after the offer has been accepted.
RYS TRANSACTION CHECK - BEFORE YOU OFFER
Private or commercial use?
Ownership structure?
Flag?
VAT/customs status?
Delivery location?
Finance?
Surveyor?
Inventory?
Deposit/stakeholder?
Who coordinates the transaction?
You may also be interested in
- Insight - The Complete Guide to Superyacht Ownership by Rosemont Yacht Services
- Who we are - Rosemont Yacht Services
- Part 1 - Buying a Superyacht: From First Viewing to Delivery
- Part 3 – Sea Trial, Survey and Due Diligence: What a Yacht Buyer Is Really Checking
Important note: General information only. Transaction-specific legal, tax, customs, regulatory and flag advice should be obtained where required.