Now, two major flag states have paved a way for megayachts to receive a Yacht Engaged in Trade Certificate of Compliance. Also known as YET, the status is newly available under the Cayman Islands Shipping Registry.
The Cayman Islands joins the Marshall Islands as the only other registry making this possible. The Marshall Islands introduced YET in 2015.
In brief, YET means a private yacht can conduct both private (non-commercial) usage and charter (commercial) usage. It’s therefore a dual-use program. Previously, the Cayman Islands, like most registries, required registering as one versus the other.
The impetus behind the dual-use idea is to give owners flexibility. For example, as many people know, letting a private yacht occasionally charter can help offset operational costs. But, owners need to switch registration from private to commercial every time they want to change usage. YET eliminates that. In addition, under commercial yacht registration, owners are supposed to have a signed charter agreement covering their own use. Related to this, owners need to pay VAT in European waters.
At this point, YET is only for yachts cruising in European waters. Specifically, charters need to start in Monaco, France, or Italy. However, all Cayman-flagged megayachts, measuring 78 feet (24 meters) and larger, with a valid classification certificate, can apply. Furthermore, the yacht must voluntarily comply with all relevant commercial standards and regulations. This allows you to obtain a temporary Yacht Engaged in Trade Certificate of Compliance. It’s temporary because it only applies to the active charter period or the period in which you’ll market your yacht for charter. Upon receiving the certificate, your yacht can then charter a maximum of 84 days in a calendar year. Passenger capacity gets capped at 12, too.
You still need to have VAT-paid status, though, or operate under the EU’s Temporary Admission rule. This law means your yacht can arrive in EU waters and remain there for 18 months without having to pay VAT on the hull. Understandably, that law also only applies to yachts with non-EU owners. For clarity, both any company listed as the yacht owner and any individual listed as the company owner must reside outside of the EU.
Note that holding Yacht Engaged in Trade Certificate of Compliance means port authorities treat your yacht as a commercial yacht. So, anticipate inspections and audits accordingly.
The full Cayman Islands shipping notice, explaining the policy in detail, is available for download.