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Registering a vessel for chartering
When chartering a superyacht, we need to understand the difference between the owner of the superyacht, and the client who will rent out the vessel for an agreed period of time.
Most of the superyachts that are used for commercial purpose (chartering) are owned by companies, which makes complete sense due to the VAT obligations of the owners.
The Principality of Monaco has no commercial flag, therefore all the vessels registered under a Monaco flag and intended for charter are due VAT, but at a much-reduced level, making it competitive compared to superyachts being classified as private use.
Many of the banks in the Principality of Monaco are equipped to offer lease options for superyachts, which helps to reduce and possibly offset the owner’s expenses. For this reason, most of the chartered superyachts are under corporate ownership.
Comparing the VAT on chartering versus buying, one can immediately see the benefits of chartering. While the superyacht owner is obliged to pay 20% VAT which is 20 million Euro on a 100 Million Euro yacht, he is only due to pay 2 Million Euro in the case the yacht is used for chartering. In this example, VAT payable was calculated based by Monaco rental on an annual 4% depreciation of the yacht over 5 years of period.
All crew members employed on a commercial yacht will be required to hold STCW 95 Basic Training certificates and provide evidence they hold the necessary Monaco approved qualifications specific to their position on board. Minimum standard clauses will be compulsory within employment agreements for crew on commercial yachts, in accordance with the Maritime Labour Convention 2006.
The crew must be hired through the Monaco Employment Office and full social security is due. Furthermore, the Captain must have the required Monegasque or French certificates. This is very challenging for very large yachts, because it is difficult to have all necessary certificates, about 45-60 in total.
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