Sales & Purchase
The sale and purchase of a superyacht can be a highly emotional experience
- Top tips
- Points for sellers to consider
- Points for buyers to consider
- Basics of superyacht sale & purchase
The reality is that you must never underestimate the importance of having a thorough understanding of the legal processes, statutory certificates, transaction documents,
tax position and various different forms required for the sale or purchase of a superyacht.
Surround yourself with people who know what they are doing and have a good track record including: surveyor, lawyer, superyacht manager, broker and VAT adviser/accountant.
Make sure your form of agreement, special terms and document list are all in writing.
The most common form of agreement for sale and purchase of second-hand superyachts is the Mediterranean Yacht Brokers Association (MYBA) sale and purchase form, known as the MYBA Memorandum of Agreement (MYBA MOA). Any additional terms or amendments of the standard terms should be recorded (eg transfer of any charters currently booked for the season or specific art works to be removed). It is important that any agreements made verbally are recorded in writing.You should consider carefully before signinganypersonalguaranteewhichunderwrites the obligations of the selling or buying company. This may compromise the ownership structure you have carefully put in place, and it could cause tax problems on the sale.
• Are there any mortgages, charges or other encumbrances registered against the superyacht (as these will need to be discharged at delivery)? This is a question any prudent buyer should ask and if you are selling, you must ensure that you can present the Transcript of Registry showing that your superyacht is unencumbered. The process can get more complicated if there are mortgages registered against the superyacht.
• What is the process? Agreement signed, conditional upon sea trial and survey. Deposit paid (the standard deposit is 10% of the purchase price but a different sum could be negotiated). Always have the sea trial first and, if you’re happy, move on to the condition survey conducted by a marine surveyor. It is never advisable to do the condition survey before the sea trial, but if you cannot avoid it you must ensure that the MYBA MOA is amended to adequately deal with this. Typically, the MYBA MOA will have an addendum which will deal with all documents that will be delivered by the seller to the buyer and vice versa.
• Who should the deposit be paid to? It is customary for the seller’s broker or lawyer to hold onto it. However, you can commercially agree for it to be held by the buyer’s broker or lawyer. Any party holding a deposit should be an established company and they are likely to need up-to-date customer information. If you cannot agree on who holds the deposit, you could get a bank to act as the stakeholder.
With regards to VAT on the purchase price, should delivery be in international waters or within the EU?
Are all of the superyacht’s statutory documents in order?
Is the superyacht financed? If so, consent from the bank to sell is usually required.
Who is my broker? Should I enter into a central agency agreement?
Is the buyer known? Who is the ultimate beneficial owner? Do I want a personal/parent company guarantee, if a single purpose company is the buyer?
What do I need to do if the buyer is changing flags?
What do I need to do if I am selling with charters in place post-closing?
What are the closing mechanics and how are funds released? Will it be through SWIFT or by waiting for funds to hit the account or conditional SWIFT (pre-placing funds but not received until the Protocol of Delivery and Acceptance is signed)?
Is the superyacht VAT paid? Or is VAT accounted for? Has VAT been claimed back?
What will be my owning structure, and do I need a VAT structure setup?
Will this be a pleasure superyacht and registered private, or do I want to charter the superyacht?
Do I want to keep the same flag? Will the current flag affect the use of the superyacht? What is involved in changing flags? Will the new flag accept this kind of superyacht onto its register as a private or commercial superyacht?
Where do I feel comfortable with the deposit being held?
Are there any special conditions, or items I want left on the superyacht (ie transfer of upcoming charters or specific items fixed prior to closing)?
Do I want to keep the current crew?
Do I want a personal guarantee from the ultimate beneficial owner or a parent guarantee of the selling company?
Have all the vested interests in the deal been declared?