Private or Charter? Is Owning A Yacht For Charter Profitable?

There will come a time for some superyacht owners when they look into chartering their yacht. The yacht is their unique retreat and, for some, their beloved home. One can fully understand the value of privacy their yacht provides them.

However, the idea of yacht chartering is considered an attractive option. High costs associated with the ownership of a private vessel can mount up, which then leads to such a commercial position. Keeping a yacht charter business is also an excellent way to maintaining a good working crew and keeping the yacht in good order. The main is that the owner must always keep in mind that yacht charter is a business and should be treated as such if they wish to succeed. 

A private yacht cannot provide a commercial charter, so there is a need for a company and the vessel to be registered as a commercial yacht. The yacht will need to abide by the Commercial Yacht Code Regulations under the chosen registry.

Should Malta be the chosen jurisdiction, then a limited liability Malta company will be registered under the Merchant Shipping Act and set up following local requirements. Other considerations such as ensuring that the Charter yacht is compliant with international health and safety regulations, employment law, as well as tax and vat requirements. 

All of this can seem overwhelming for the owner to have to deal with, so it is vital to identify the local professional partner to provide a seamless setup and ongoing business relationship.  Before deciding on which jurisdiction to settle on, it is essential to consider the residence of the owner (the ‘company’), where the activity will take place, and under which flag to register the yacht.

It would be advisable for the novice yacht owner to engage with a Yacht Management company that will offer sound advice and assist in recruiting a sound crew, which is crucial for good charter business. There is so much to consider when engaging with a new crew, such as contracts, checking all certifications, payroll, crew welfare insurance, etc. Let the experts do the work!

And finally, VAT applicable conformity when chartering in EU waters. This process should be left to the professional who has expertise in this area, ensuring that VAT is paid when and where it is due and, where applicable, a VAT recovery.

Zeta is authorised and regulated by the Malta Financial Services Authority to provide Corporate Services. We assist with company set ups and provide bookkeeping and administration services.  Zeta is registered and authorised to provide local representation and help with the registration of vessels for private or commercial use. Zeta works closely with an established partner whose team is experts in the field of Yacht & Crew Management. We will ensure that the entire process is plain sailing.

For more information on how Zeta can assist you please contact our Business Development team on
bd@zeta-financial.com.