A part of Affinity’s growth in 2021 has entailed an expansion into a new jurisdiction, the Cayman Islands. The strategy behind the expansion is to encompass more opportunities for our clients in multiple jurisdictions to offer further flexibility and solutions.
Our position in the yachting sector in the Isle of Man and Malta has formed over many years of experience, whereby we have developed an integral understanding of each jurisdiction’s maritime legislation, fiscal regimes and flag states.
In this case, we are able to provide our clients with expert knowledge and professional advice which is tailored to their individual circumstances. We thereafter create the most efficient strategy for our clients that we are able to put into effect with tried and tested practices. Our office in Cayman provides our clients with the opportunity to operate in new jurisdiction, under a different flag.
As a British Oversees Territory, the Cayman Islands is part of the Red Ensign Group and has a Red Ensign flag which is highly regarded in the Superyacht Industry with a prestigious, international reputation. The Cayman Islands is recognised as the premium offshore jurisdiction to register Superyachts, holding 15% of yachts over 30m in the world.
The Cayman Islands Ship Registry (CISR) falls under Category 1 the highest ranking in the Red Ensign Group which approves ships of all sizes and types, all ships registered in Cayman are granted protection from the British Royal Navy due to sailing under a Red Ensign flag. The Cayman Islands Ship Registry has been recognised globally for their superior quality of service, qualifying in the United States Coast Guard (USCG) Qualship 21 Programme for their excellent Port State Control and commitment to quality shipping. The Paris MoU Annual Report releases “White, Grey and Black (WGB) Lists that act as a spectrum for flag quality. The Cayman Islands ranked 9th on the White List in 2018-2021, achieved 1st on the ‘White List’ in the 2016 and have been on it for 12 consecutive years. The Cayman Islands Ship Registry (CISR) holds a head office in Cayman and has 10 representatives all in different countries across the world including a European Regional office in the UK. The Ship Registry is therefore able to provide a consistent high level of client service which covers multiple time zones.
The CISR dates back to 1903, however the Island boasts an impressive maritime heritage, originally a convenient place for historic mariners to stop for fresh water. Cayman maritime sector is protected by its robust, modern maritime legislation that is based on English Common Law, which more recently has been revisited to attract and enhance the efficiency when registering a yacht in Cayman. As a key determining factor, the environment is critical when choosing where to register a yacht. Defined by the social, economic and legal practices set in place, Cayman has consistently boasted a secure location, with a stable parliamentary democracy since 1831.
In addition to this, as an offshore landscape with a competitive neutral fiscal regime, Cayman is internationally recognised as a well-regulated, first-tier jurisdiction for finance and business services. As a support to the Ship Registry, as an international Corporate Service Provider with offices in the Isle of Man and Malta, Affinity Group are well placed in Cayman to assist with the entire process of registering a yacht. In this case, professional advice is utilised to initially qualify a yacht and the yacht owner.
Registering a Yacht
To qualify a yacht, the vessel chooses a suitable name that must be available on the CISR register. As Cayman accepts vessels of any size and type, there are various ownership structures available that have various requirements. As for registering a commercial yacht, a ‘Registration Matrix’ is used to determine the vessels standards to meet the minimum safety and operational standards.
As for private yachts registered for leisure use, convention and statutory certificates will be issued, whereby requirements vary slightly depending on the vessels size.
Types of registration:
There are various types of registration that a yacht can operate under to cater for different circumstances. The types of registration has varied required documents and fees.
Once the required registration forms, supporting documentation and fees have been completed, the full registration of the vessel is granted, with a receipt of a Certificate of British Registry (COBR)
The requirement of relevant registration forms, supporting documentation and fees will grant an interim registration which entails registration in the process of a transfer of ownership.
An avenue that allows the registration of a yacht whilst it’s under construction, after completing the relevant registration forms, supporting documentation and fees.
Demise (‘bareboat charter’)
An option to register the yacht to operate as Bareboat charter, which grants the permission to charter the vessel and the vessel alone, without the assistance of crew or any other provisions, under the completion of registration relevant forms, documentation and fees.
Along with the mentioned registration options available to choose from, registering a yacht in Cayman brings many other benefits such as competitive registry fees, a reputable flag, a highly regarded register recognised to customs around the world and a wide range of ownership structures available.
Individual or Joint Owners
Once the yachts registration has been approved, the owner of the yacht must be verified too to ensure that individual is legally eligible to own the vessel. The requirements for an individual depend on the ownership structure they use and whether the owner has a legal title or will have one in the immediate future. As a measure of compliance to prove authenticity of the individual, the individual must be in one of the 70 qualifying countries that Cayman approves, which requires the individual to hold a passport from; a European Union (EU) or European Economic Area (EEA) country or, countries which are included in Third Schedule of the Cayman Islands Money Laundering Regulations 2021.
In the circumstance that the individual cannot meet these set requirements, the individual is able to be a part-owner of the vessel if there is another qualified owner, however the part-owner is restricted to 31 out of the 64 shares in a vessel.
Company and Shipping Entity
Another type of ownership structure that Cayman accepts the incorporation of a Cayman entity on behalf of the vessel, which would be processed whilst registering the yacht. The entity would be treated as per the individual and must be in one of the 70 qualifying countries, the entity could be formed in the Cayman Islands or; the European Union (EU) or European Economic Area (EEA) country or a country included in the Third Schedule of the Cayman Islands Money Laundering Regulations.
In the case of companies that fall outside of the set criteria, Cayman considers them as foreign companies which must set up a registered office in Cayman that conducts regular business affairs in order to qualify to register a Cayman vessel.
Cayman Local Representative
A local representative person who is a resident in Cayman can be appointed if the vessel owner is non Caymanian resident or owner of a Cayman entity. The representative person must be appointed prior to registering the vessel to act on behalf of the vessel owner. In this case, Affinity’s office in Cayman is well-placed as to act a local representative on behalf of clients wishing to register a yacht in Cayman.
As an established corporate service provider in the yachting sector, Affinity is experienced in multiple jurisdictions with all types of ownership structures and holds an integral understanding of the various registration processes. Our personal approach is comprehensive which involves close support in every step of registering a yacht.
Affinity services include;
- Implementation of tax-efficient ownership structures
- VAT, compliance and administration
- Multi-jurisdictional EU VAT registrations
- VAT efficient importation into the EU
- Administration of the ownership structure
- Yacht registration
- Management and administration of crew payroll
- Liaison with banks and advisors in relation to financing the yacht
- Registration of mortgages
- Liaison with legal advisors and brokers in respect of purchase and sale
- Payment of supplier invoices and management of crew expenditure and limits
- Preparation of budgets, periodic management reports and annual financial statements
- Statutory administration services
For more information, contact our team at firstname.lastname@example.org