Glossary
Plain definitions of the terms that recur in The First Owner’s Reference. Linked from every chapter. Citable.
AIS
Automatic Identification System. A continuous radio broadcast of vessel position, course, speed, identity, and dimensions, mandatory on most yachts above 300 GT.
Read in fullBeneficial ownership
The natural person who ultimately owns or controls a legal entity. EU public access to UBO registers was restricted by the 2022 CJEU Sovim ruling.
Read in fullBOAT International Global Order Book
The annual census of yachts above 24 metres in build or on order, published by BOAT International. The 2026 edition records 1,093 yachts.
Read in fullBrokerage
The sale of an existing yacht through an intermediary. The seller pays the commission, typically 10 percent of the sale price, regardless of which broker introduces the buyer.
Read in fullCentral agency
A formal mandate by which a single broker is appointed by the seller to market the yacht. Other brokers can introduce buyers but only the central agent receives the listing-side commission.
Read in fullCharter VAT
Value-added tax applied to commercial yacht charters, charged where the charter is enjoyed. Standard EU rates range from 8 to 22 percent depending on jurisdiction and effective use.
Read in fullClass society
A recognised organisation that surveys yachts to defined construction and maintenance standards. The major IACS members are Lloyd's Register, DNV, Bureau Veritas, RINA, ABS, and ClassNK.
Read in fullDual agency
When a single brokerage represents both buyer and seller in a transaction. The conflict of interest is structural and may not always be disclosed in writing.
Read in fullECDIS
Electronic Chart Display and Information System. A computer-based navigation system using vector electronic charts, mandatory on most commercially registered yachts above 500 GT.
Read in fullENG1
MCA seafarer medical certificate. Mandatory under STCW for crew working on commercial yachts. Two-year validity; first issue requires UK-approved doctor.
Read in fullEU ETS Maritime
EU Emissions Trading System for shipping, in force from 2024 and phased in through 2026. Applies to commercial vessels above 5,000 GT entering EU ports.
Read in fullFlag state
The country under whose laws a yacht is registered. Common choices for superyachts include Cayman Islands, Marshall Islands, Malta, and the Red Ensign Group jurisdictions.
Read in fullHull insurance
Insurance on the yacht as a physical asset. Standard premium for a well-maintained 40 to 50 metre yacht is 0.7 to 1.5 percent of insured value per year.
Read in fullImportation
The customs procedure under which a yacht enters EU customs territory and Union customs status is granted, typically with VAT and any duty paid at the point of entry.
Read in fullISM Code
International Safety Management Code. The mandatory framework under which yachts above 500 gross tonnes operate. Compliance is documented in a Safety Management System.
Read in fullISPS Code
International Ship and Port Facility Security Code. Mandatory security framework for vessels above 500 GT engaged in international voyages, including documented Ship Security Plan and certificates.
Read in fullKnight Frank Wealth Report
The annual reference report on global UHNW wealth, published by Knight Frank Research. The 2026 edition includes a yacht-market spread sourced from BOAT International.
Read in fullLMAA arbitration
London Maritime Arbitrators Association. The default arbitration forum for yacht new build and major refit contracts under English law.
Read in fullMARPOL Annex VI
International Convention for the Prevention of Pollution from Ships. Annex VI covers air pollution including SOx, NOx, particulate matter, and CO2 from yachts.
Read in fullMLC 2006
Maritime Labour Convention 2006. The treaty governing crew working conditions, contracts, hours, and welfare. Applies to most commercially operated superyachts.
Read in fullMOA
Memorandum of Agreement. The binding sale and purchase contract for a yacht. The MYBA form is standard in the Mediterranean and Caribbean; the IYBA form is used in the Americas.
Read in fullMYBA
Mediterranean Yacht Brokers Association. Publishes the standard charter agreement used across most of the Mediterranean charter market.
Read in fullOBBBA bonus depreciation
United States One Big Beautiful Bill Act provision allowing up to 100 percent first-year depreciation on yachts placed in commercial service between 2025 and 2029.
Read in fullOwner's representative
An independent professional appointed by the buyer to oversee a new build or major refit. Paid by the owner, with no commercial relationship to the yard.
Read in fullP&I
Protection and Indemnity. Mutual liability insurance covering crew injury, environmental damage, third-party claims, and charter-guest exposure. Typically written by mutual clubs.
Read in fullPolar Code
International Code for Ships Operating in Polar Waters. Mandatory IMO framework covering vessel design, equipment, and operations in Arctic and Antarctic waters.
Read in fullPre-purchase survey
An independent technical inspection commissioned by the buyer before contract. Distinct from the seller's most recent survey and almost always worth the cost.
Read in fullPunch list
The list of outstanding items, defects, or incomplete work identified at a yacht's delivery or refit redelivery, to be completed by the yard before final acceptance.
Read in fullRed Ensign Group
The collective UK and British Crown Dependencies and Overseas Territories ship registries operating under MCA-equivalent standards. Includes Cayman, Bermuda, Gibraltar, BVI, Isle of Man, Jersey, and Guernsey.
Read in fullRefit
Major maintenance, modernisation, or rebuild work undertaken at a specialist yard. Typical scopes range from cosmetic refresh to multi-year structural rebuild.
Read in fullRetrocession
A commission rebate paid quietly between counterparties, often from a yard or supplier back to a referring broker, captain, or management company. Frequently undisclosed.
Read in fullSea trial
An on-the-water test of the yacht under representative load, undertaken with the buyer's own captain candidate, surveyor, and chief engineer present.
Read in fullSpanish IPR
Inward Processing Relief. A customs regime allowing non-EU yachts to undergo refit work in Spain without paying import VAT, provided they are subsequently re-exported.
Read in fullSpanish matriculation tax
A 12 percent registration tax levied by Spain on yachts above 8 metres used for private leisure by Spanish-resident owners. Charter use is exempt under qualifying conditions.
Read in fullSPV (Special Purpose Vehicle)
A separate legal entity established to own a single yacht, providing limited liability, clean transferability, and the structural framework for charter VAT routing.
Read in fullStage payments
The payment schedule on a yacht new build, structured against build milestones. Industry-typical loading is 50 to 70 percent of contract value before delivery.
Read in fullSTCW
Standards of Training, Certification, and Watchkeeping for Seafarers. The IMO convention setting global minimum standards for seafarer competency.
Read in fullSYBAss
Superyacht Builders Association. Membership signals an independently audited ability to deliver new builds above 40 metres.
Read in fullTemporary Admission
An EU customs regime under which a non-EU registered yacht with non-EU established owner and users can cruise EU waters for up to 18 months at a stretch without paying VAT or duty.
Read in fullTier III emissions
MARPOL Annex VI NOx emission standard for engines installed on vessels constructed after 1 January 2016 operating in designated NOx Emission Control Areas.
Read in fullVAT regime
The framework under which value-added tax is paid (or relieved) on a yacht's purchase, importation, and operation. Choices include Spanish IPR, French commercial exemption, Italian leasing, and Maltese.
Read in fullVAT-paid status
Confirmation that EU VAT has been settled on the yacht's hull, attaching to the asset rather than the flag. A VAT-paid yacht can move freely within the EU customs territory.
Read in fullYacht Engaged in Trade
A flag-state regime allowing a privately registered yacht to undertake commercial charter activity for a limited period, typically 84 days per year, in defined geographies.
Read in fullYacht management company
A firm engaged by the owner to handle compliance, accounting, crew administration, and operational support. Distinct from a broker. Should be selected independently.
Read in fullYET (Yacht Engaged in Trade)
Cayman Islands and other flag-state regimes for limited commercial use by privately registered yachts in defined EU jurisdictions.
Read in fullYORR
Yacht Owners' Register of Representatives. The independent register on which qualifying owner's representatives are listed.
Read in full