According to Mark Robinson of Mark Robinson Marine Consultants, private yachts under these provisions will still have to pay VAT, but owners will not have to open a charter agreement to use their yachts, as would be required for owners who have commercially registered yachts.
“It’s been designed to allow owners to enjoy their yachts again,” explained Robinson. “It’s about fiscal transparency and it’s the way forward.” Not to be confused with Private Yachts Limited Charter (PYET), Robinson believes it has the “very big possibility” of encouraging owners to switch to the Marshall Islands flag.
The announcement was met with some concern, however. Despite assurances the yacht will need to be commercially compliant, which would include complying with the Maritime Labour Convention, 2006 (MLC), John Leonida, partner at Clyde & Co., described the new Marshall Islands offering as “a marketing exercise on the part of the Marshall Islands” that puts the safety of a yacht at risk regarding yachts “pretending they’re [MLC] compliant when they’re not”.
Robinson assured there will be a learning curve, however. “It’s taken 18 months to do this and will take another year of education. There will be some hurdles.”