# The First Owner's Reference

> An independent, contributor-led yachting field manual for first-time superyacht buyers. Published annually by Foreland Marine Consultancy Ltd. 1st Edition, 2026. No advertising, no sponsorship, no brokerage or shipyard affiliation, no affiliate links.

## About

The First Owner's Reference is written for people buying a yacht above 24 metres for the first time. It is published by Foreland Marine, an independent superyacht consultancy in London that acts for owners only and takes no commission from yards, brokers or suppliers. The publication names its sources, names its contributors, and applies its own independence test to its publisher. Co-editors in chief: Jack MacNally and Daniel Marks.

Website: https://firstownersreference.com
Publisher: https://www.forelandmarine.com
Citation guidance: https://firstownersreference.com/colophon

## Chapters

### Chapter 01: The reality of ownership
What the first three years of yacht ownership actually look like, in time and in money.
URL: https://firstownersreference.com/01-reality-of-ownership
Case material: https://firstownersreference.com/01-reality-of-ownership/case
Checklist: https://firstownersreference.com/01-reality-of-ownership/checklist

### Chapter 02: Reading the market in 2026
Where the order book actually sits, who has capacity, and what that means for a buyer entering this year.
URL: https://firstownersreference.com/02-reading-the-market
Case material: https://firstownersreference.com/02-reading-the-market/case
Checklist: https://firstownersreference.com/02-reading-the-market/checklist

### Chapter 03: How the industry actually works
Conflicts, commissions, retrocessions, and the captain’s role at the centre of it. Said plainly.
URL: https://firstownersreference.com/03-how-the-industry-works
Case material: https://firstownersreference.com/03-how-the-industry-works/case
Checklist: https://firstownersreference.com/03-how-the-industry-works/checklist
Interview, Capt. Pavlos Filippakis (Master Mariner (Class 1 Unlimited, Ice Class)): https://firstownersreference.com/03-how-the-industry-works/qa/pavlos-filippakis

### Chapter 04: The acquisition process
From shortlist to closing. Surveys, sea trials, VAT regimes, flag choice, and the five most common pitfalls.
URL: https://firstownersreference.com/04-acquisition-process
Case material: https://firstownersreference.com/04-acquisition-process/case
Checklist: https://firstownersreference.com/04-acquisition-process/checklist
Interview, Capt. Pavlos Filippakis (Master Mariner (Class 1 Unlimited, Ice Class)): https://firstownersreference.com/04-acquisition-process/qa/pavlos-filippakis

### Chapter 05: New build versus brokerage
The 24 to 36 month commitment of a new build, against the immediacy of brokerage. Trade-offs and the cases for each.
URL: https://firstownersreference.com/05-new-build-versus-brokerage
Case material: https://firstownersreference.com/05-new-build-versus-brokerage/case
Checklist: https://firstownersreference.com/05-new-build-versus-brokerage/checklist
Interview, Hein Velema (Secretary General, Superyacht Alliance for Professional Standards; first president of SYBAss; former Feadship and Fraser): https://firstownersreference.com/05-new-build-versus-brokerage/qa/hein-velema
Interview, Jack Inglis (Founder, ULTIMAR): https://firstownersreference.com/05-new-build-versus-brokerage/qa/jack-inglis

### Chapter 06: Refit
When to refit and when to sell. Yard selection, scope discipline, and the budget overrun pattern that defines the market.
URL: https://firstownersreference.com/06-refit
Case material: https://firstownersreference.com/06-refit/case
Checklist: https://firstownersreference.com/06-refit/checklist

### Chapter 07: Operations
The captain hire, the crew structure, the compliance reality, the insurance market, and the charter economics that almost never work.
URL: https://firstownersreference.com/07-operations
Case material: https://firstownersreference.com/07-operations/case
Checklist: https://firstownersreference.com/07-operations/checklist
Interview, Erica Lay (Crew recruitment specialist, EL Crew Co): https://firstownersreference.com/07-operations/qa/erica-lay
Interview, Capt. Pavlos Filippakis (Master Mariner (Class 1 Unlimited, Ice Class)): https://firstownersreference.com/07-operations/qa/pavlos-filippakis
Interview, Ollie Davis (PIB Marine (formerly Zorab Insurance Services)): https://firstownersreference.com/07-operations/qa/ollie-davis

### Chapter 08: Motor versus sail
The structural decision few first-time buyers spend enough time on. Operating cost, environmental footprint, racing pedigree, and the case for sail in 2026.
URL: https://firstownersreference.com/08-motor-versus-sail
Case material: https://firstownersreference.com/08-motor-versus-sail/case
Checklist: https://firstownersreference.com/08-motor-versus-sail/checklist
Interview, Ella Johnson (Captain, 34m Baltic Yachts Performance Sloop): https://firstownersreference.com/08-motor-versus-sail/qa/ella-johnson
Interview, Capt. Pavlos Filippakis (Master Mariner (Class 1 Unlimited, Ice Class)): https://firstownersreference.com/08-motor-versus-sail/qa/pavlos-filippakis

### Chapter 09: The decision framework
The ownership structure to settle first. Building your team, and the ten questions to ask before signing anything. The independence test, applied transparently.
URL: https://firstownersreference.com/09-decision-framework
Case material: https://firstownersreference.com/09-decision-framework/case
Checklist: https://firstownersreference.com/09-decision-framework/checklist
Interview, Simon Roberts (Corporate services provider, Quadrant Group): https://firstownersreference.com/09-decision-framework/qa/simon-roberts

## Reference pages

Running cost calculator. Annual operating cost modelled against size, type, region and use intensity, across nine cost categories. URL: https://firstownersreference.com/tools/running-cost-calculator
Yacht VAT in 2026. The EC Guidance Note for Pleasure Craft of 30 April 2026, Italian ADM Circular 11/2026, Temporary Admission, and the post-Brexit UK position. URL: https://firstownersreference.com/tools/yacht-vat-2026
Captain and crew salaries 2026. Benchmarks by position and yacht size, sourced from the recruitment side. URL: https://firstownersreference.com/tools/captain-and-crew-salary-2026
Order book tracker. The 2026 Global Order Book by yard, country and hull type. URL: https://firstownersreference.com/tools/order-book-tracker
Yacht insurance cost 2026. Hull and machinery rates as a percentage of insured value, P&I limits, war risk pricing by region, and the deductible and warranty terms that are negotiable at quote stage. URL: https://firstownersreference.com/tools/yacht-insurance-cost-2026
Yacht depreciation. The broker-aggregated depreciation curve by year, the builders that beat it, total five-year hold cost, and the charter arithmetic. URL: https://firstownersreference.com/tools/yacht-depreciation
Ten questions to ask before you buy. Put to every adviser, including the publisher. URL: https://firstownersreference.com/09a-questions-to-ask-before-you-buy

## Frequently asked questions

### How much does it cost to run a superyacht per year?
Annual running cost on a 40 to 50 metre yacht operated privately at moderate use typically lands at 12 to 15 percent of purchase price, not the folkloric 10 percent. On a 50 metre new-build motor yacht that runs to roughly EUR 4 to 6 million per year. Crew is the dominant line at 30 to 40 percent of total operating cost. Maintenance, insurance, berths, fuel, management, and compliance fill the rest. Charter operation, larger size, and older age all push the figure higher. The running cost calculator on this site sizes the picture against MYBA, Pantaenius, and Quay Crew published data.
Source: https://firstownersreference.com/01-reality-of-ownership

### Is the 10 percent rule for yacht ownership accurate?
The 10 percent rule, that annual operating cost equals roughly 10 percent of purchase price, is a folkloric figure with no traceable origin. It is roughly correct for new, mid-sized, lightly used yachts, but wrong for most readers of The First Owner’s Reference. As the asset depreciates the percentage rises mechanically, since running cost is a function of size and complexity, not residual value. YachtBuyer in published analysis calls the rule at best obsolete or even misleading for older or larger crewed vessels. The honest budgetary figure is 12 to 15 percent for a typical 40 to 50 metre new build privately operated at moderate use.
Source: https://firstownersreference.com/01-reality-of-ownership

### How much does a superyacht depreciate?
Year one typically sees 10 to 20 percent decline from purchase price. Years two to five show a further 6 to 8 percent annually, compounding. By year five a typical hull has lost 40 to 50 percent of its original value. The curve flattens after year five. Quality builders such as Feadship, Lürssen, Royal Huisman, Vitters, and Baltic Yachts hold value materially better, with single-digit percentage losses possible after year five. There is no peer-reviewed academic study of yacht depreciation; all published curves are broker-aggregated and self-reported, which is itself a finding.
Source: https://firstownersreference.com/01-reality-of-ownership

### Can charter income offset yacht ownership cost?
For the median yacht in the median programme, the arithmetic does not bear out the broker line. BOAT International published case studies show a 48 metre motor yacht at 7 charter weeks per year breaking roughly even on running cost; a 47 metre sailing yacht at 9 weeks losing EUR 444,000; an 85 metre motor yacht at 8 weeks losing EUR 430,000. The successful exception is the disciplined owner-optimised programme willing to release prime-season weeks. Most charter operations subsidise rather than recover ownership cost.
Source: https://firstownersreference.com/01-reality-of-ownership

### How many weeks per year does a yacht owner typically use the boat?
Ocean Independence’s owner-usage data places typical use at 4 to 8 weeks per year. Committed users reach 12 to 16 weeks. Above that, charter operation is the only economically rational frame, and even charter does not solve the depreciation and fixed-cost problem on its own. The first task before any acquisition is an honest estimate of intended use, tested against the buyer’s actual calendar for the next five years. Below 12 weeks of intended use, charter and fractional access cover the same calendar at lower fixed cost.
Source: https://firstownersreference.com/01-reality-of-ownership

### How big is the superyacht market in 2026?
Knight Frank’s Wealth Report 2026 records USD 8.5 billion of yacht transactions in 2025, a 70 percent rise on the prior year. The 2026 BOAT International Global Order Book lists 1,093 yachts of 24 metres and above on order or in build, down from 1,138 in 2025, the second consecutive annual decline by unit count. Average length on the order book has risen to 40.8 metres and 551 GT, the highest ever recorded. Italy is now the dominant production geography at 568 units, 52 percent of the global order book by units.
Source: https://firstownersreference.com/02-reading-the-market

### Which yards are sold out for new build superyachts?
Top-tier yards are at capacity. Lürssen books extend through mid-2027 at minimum and have absorbed Nobiskrug capacity in 2024 and 2025. Feadship slot availability is openly discussed in trade press as extending to 2028 to 2029. Oceanco delivered the 111 metre DreAMBoat in 18 months in November 2025 as a counter-example. Heesen has run a speculative-build model since 2023 with full backlog through 2025 and beyond. Mid-tier yards have varying capacity. The major decision for a 2026 buyer is whether to take a brokerage hull now, take a slot at a mid-tier yard with capacity, or wait three to four years for a top-tier delivery.
Source: https://firstownersreference.com/02-reading-the-market

### Why is the United States driving the 2026 yacht market?
Stewart Campbell, Managing Director of BOAT International, identifies the 100 percent depreciation provision in the United States’ One Big Beautiful Bill Act as the largest single driver of the 2025 surge. The Knight Frank Wealth Report 2026 places 41 percent of new UHNWIs created in the United States and forecasts the US share rising to 41 percent of the world’s UHNW population by 2031. Knight Frank picks up BOAT International’s data: US buyers account for up to 50 percent of all yacht transactions and yachts over 70 metres rose 60 percent year on year.
Source: https://firstownersreference.com/02-reading-the-market

### How is wealth being created and transferred for yacht buyers?
The Knight Frank Wealth Sizing Model places the global UHNWI population (above USD 30 million) at 713,626 in 2026, up 162,191 over five years. Capgemini’s World Wealth Report 2025 records USD 83.5 trillion of wealth being inherited by Gen X, millennials, and Gen Z by 2048, with 81 percent of next-generation HNWIs intending to switch from their parents’ wealth management firm within one to two years of inheritance. The reader of The First Owner’s Reference is therefore typically a newly liquidated principal, or an heir whose first action is to fire the parents’ adviser.
Source: https://firstownersreference.com/02-reading-the-market

### Who pays the yacht broker commission?
On a brokerage transaction, the seller pays the commission from the sale proceeds, regardless of which broker introduces the buyer. The buyer is not invoiced. The IYBA standard is a flat 10 percent of the sale price; MYBA uses a sliding scale. The structural consequence is that every party introduced through a brokerage is paid contingent on a closed transaction, which shapes incentives. The buyer’s structural counterweight is an independent adviser whose income is not contingent on closing.
Source: https://firstownersreference.com/03-how-the-industry-works

### What is dual agency in a yacht transaction?
Dual agency is when a single brokerage represents both the buyer and the seller. It is permitted in most jurisdictions provided it is disclosed. The standard MYBA and IYBA agreements include a dual-agency clause that the buyer signs with the central agent. Disclosure beyond that boilerplate, including any retrocession arrangements with introducing parties, is typically not volunteered. Asking is the discipline. Buyers who want clean alignment engage a buyer-side adviser whose only role is the buyer’s interest.
Source: https://firstownersreference.com/03-how-the-industry-works

### What is a retrocession in yacht industry?
A retrocession is a commission rebate paid quietly between counterparties, typically from a yard, supplier, or management company back to a referring broker, captain, or adviser. Retrocessions are legal in most jurisdictions provided they are disclosed. The structural problem is that disclosure is typically not volunteered. The OnboardOnline legal column has stated the position plainly. Asking each introduced party for written disclosure of every referral relationship and retrocession arrangement is the buyer’s protection.
Source: https://firstownersreference.com/03-how-the-industry-works

### Should I trust the captain’s recommendation on broker, surveyor, or yard?
A captain’s recommendation merits the same disclosure question as any other. The captain may have prior commercial relationships with brokers, yards, suppliers, and management companies that continue into employment. The candidate’s introduction route, prior commercial relationships, and pay structure (straight salary versus bonus, charter share, or referral-related elements) are all worth establishing in writing before the captain is hired. Captains who agree easily are pleasant in interview; the disciplined candidate asks the difficult questions.
Source: https://firstownersreference.com/03-how-the-industry-works

### How long does it take to buy a superyacht?
The acquisition window for a brokerage hull is typically 12 to 24 weeks from offer to closing. The right work is done in the first ten weeks: shortlisting from at least two brokerages plus an independent off-market scan, pre-purchase survey by an independently engaged surveyor, sea trial with the buyer’s own captain candidate present, and contract drafting under independent counsel. Closing acceleration is the seller’s interest, not the buyer’s; three weeks of additional due diligence costs nothing and tends to surface issues that save significantly.
Source: https://firstownersreference.com/04-acquisition-process

### Do I need a pre-purchase survey before buying a yacht?
Yes. A pre-purchase survey by an independently engaged surveyor is a non-negotiable acquisition discipline. Cost on a 40 to 50 metre yacht runs USD 25,000 to 60,000 inclusive of paint specialist and class-society inspector, over four to seven days afloat plus haul-out. Recognised firms include Ward & McKenzie and Patton Marine. Renegotiation on every material deficiency the survey finds is standard practice. The seller’s most recent survey is not a substitute.
Source: https://firstownersreference.com/04-acquisition-process

### What is a Memorandum of Agreement on a yacht sale?
The MOA is the binding sale and purchase contract. The MYBA Memorandum of Agreement is the most common form across the Mediterranean and Caribbean markets; the IYBA form is used in the Americas. Key clauses to settle with independent counsel: title warranties, inventory matching the sale, deficiencies remediated or priced, an acceptance protocol with adequate time, governing law clause not the seller’s home jurisdiction, and a closing schedule resistant to acceleration. Stephenson Harwood, HFW, Hill Dickinson, Watson Farley, Reed Smith are recognised firms.
Source: https://firstownersreference.com/04-acquisition-process

### What flag should I register a private yacht under?
Selection depends on four things in combination: compliance, charter intent, financing, and owner residence. Cayman Islands carries the highest reputational weight, REG Category 1 with MCA-equivalent oversight. Marshall Islands offers an open registry with 84 days commercial use under Yacht Engaged in Trade or Private Yacht Limited Charter regimes. Malta is the EU flag of choice for owners who want unrestricted EU charter operation through the reformed lease scheme. Red Ensign Group includes Isle of Man, Bermuda, Gibraltar, BVI, and Cayman in Category 1; Jersey and Guernsey are Category 2 with a 400 GT cap.
Source: https://firstownersreference.com/04-acquisition-process

### Should I buy a new yacht or a brokerage yacht?
The threshold tests are: a hold horizon of seven to ten years on paper, an intended use pattern materially specific to the yacht, and commitment to four disciplines (independent owner’s representative engaged before contract, specialist shipbuilding counsel, technical due diligence on the yard’s order book and financial condition, willingness to push back on the yard’s first-draft contract). If a brokerage hull within the search window delivers most of the use case, custom is for the residual that does not match. Below seven years’ hold, the new build cost premium does not amortise.
Source: https://firstownersreference.com/05-new-build-versus-brokerage

### What does an owner’s representative do on a yacht new build?
The owner’s representative manages the buyer’s interests across yard selection, contract drafting, technical specification, build supervision, milestone inspection, snag-listing, and delivery acceptance. The independence test is whether the representative’s income is contingent only on the buyer’s instructions, with no yard commission, no broker referral, and no contingent-fee arrangement on closing. SYBAss, the Superyacht Alliance for Professional Standards, IAMI, and GUEST jointly founded the Yacht Owners’ Register of Representatives in June 2023 to vet practitioners.
Source: https://firstownersreference.com/05-new-build-versus-brokerage

### What stage payment schedule is typical on a yacht new build?
Industry-typical stage payment loading is 50 to 70 percent of contract value before delivery, with the balance paid at delivery and final acceptance. Stage payment loading above 70 percent before delivery sits outside the industry-typical range. Refund guarantee credit quality is the buyer’s structural protection: tier-one bank pay-on-demand is the discipline; surety wrappers are weaker. Liquidated damages are typically 1 percent of contract value per week of delay, capped at 5 to 10 percent. Force majeure burden on the yard to prove but-for causation per English law is the practitioner standard.
Source: https://firstownersreference.com/05-new-build-versus-brokerage

### Why is owner-side representation quality a market problem?
SYBAss founded the Yacht Owners’ Register of Representatives jointly with the Superyacht Alliance, IAMI, and GUEST in June 2023 because owner-side representation quality was structurally inadequate at the world’s top yards. Jack Inglis of ULTIMAR has published a case in which a family office CFO acted as deputised owner’s representative; the deficiency snag list at delivery ran to 1,200 items against the 100 the family office reported. The structural problem is that brokers, yards, and management companies have established relationships with each other; the unconflicted independent representative is the structural counterweight.
Source: https://firstownersreference.com/05-new-build-versus-brokerage

### How do I check if an owner’s representative is on the YOR Register?
The Yacht Owner’s Representative Register (YORR) is the cross-industry list of vetted owner’s representatives. The register table is published by the Superyacht Alliance for Professional Standards at https://superyachtalliance.org/register/register-table/ and is searchable by firm and by named principal. Inclusion requires demonstrated independence from yards, brokers, and management companies; the SYBAss-aligned YORP training, taken either as Unit 40 alone (for practitioners with three or more approved large refit or new build projects) or as the full 200-hour, four-course programme; a CV audit; and a documented track record on builds above 40 metres. Buyers considering an owner’s representative can look up the firm and its principals on the register table directly before signing any engagement letter.
Source: https://firstownersreference.com/05-new-build-versus-brokerage

### How much does a superyacht refit cost?
Refit cost runs from 10 to 60 percent of pre-refit market value depending on scope. Mid-life refits at year five to seven typically cover paint, soft furnishings, and selective system upgrades. Full refits at year ten to fifteen include structural and propulsion work and can run 30 to 60 percent of pre-refit value. Empirical overrun against initial budget runs 30 to 50 percent on the opened-up-vessel pattern. A contingency reserve of 15 to 25 percent included in the budget is calm planning. Above 30 percent of pre-refit market value, sale is the standard alternative.
Source: https://firstownersreference.com/06-refit

### When should I refit a yacht versus selling it?
If the projected refit cost exceeds 30 percent of the yacht’s pre-refit market value, sale is the standard alternative. Below that threshold, refit is the standard path. The calculation is bespoke: strategic fit of the post-refit yacht against the actual continued use case must be tested on paper, alongside the alternative arithmetic of sale, reacquisition of comparable hull, depreciation, transaction cost, and crew continuity loss. The threshold is rough; the decision is the owner’s, taken with the independent adviser.
Source: https://firstownersreference.com/06-refit

### Which are the best refit yards for superyachts?
Northern European refit specialists include Pendennis (Falmouth), Damen Vlissingen, Royal Huisman (Vollenhove), Lürssen Bremen, and Amico (Genoa). Mediterranean refit yards include MB92 Group (Barcelona and La Ciotat), STP and Astilleros de Mallorca (Palma), Lusben (Viareggio), and Compositeworks (Marseille). Yard slot booking 12 to 18 months ahead is now standard given top-yard demand. Selection is on track record, alignment, and project manager experience, not cheapest quote.
Source: https://firstownersreference.com/06-refit

### What is Spanish Inward Processing Relief for yachts?
Spanish IPR (Inward Processing Relief) is the EU customs regime under which a non-EU-flagged yacht can enter Spain for refit work without triggering EU VAT or import duty, provided the yacht is re-exported on completion. The regime is widely used at MB92 Barcelona, STP Palma, and Astilleros de Mallorca. Equivalent regimes exist in France (Commercial Exemption) and Italy. Independent counsel should select the VAT structure for the specific refit scope. Builder’s risk insurance with the buyer’s interest noted should cover transit between subcontractor sites.
Source: https://firstownersreference.com/06-refit

### What does a superyacht captain earn in 2026?
Per the YPI Crew 2026 salary guide, a captain on a 50 metre yacht earns EUR 10,000 to 16,000 per month. A captain on an 80 metre runs EUR 16,000 to 23,000. Quay Crew’s 2025 captain survey records a 7 percent year-on-year increase in the 70 to 79 metre bracket and confirms 63 percent of captains are now on time-for-time rotation. Senior crew are the bottleneck of the industry; their pay continues to rise where junior crew has plateaued. Crew accounts for 30 to 40 percent of total annual operating cost.
Source: https://firstownersreference.com/07-operations

### How many crew does a 50m superyacht need?
A 50 metre motor yacht typically carries 12 to 16 crew. A 50 metre sailing yacht carries 9 to 12. Manning levels are set by the flag state’s Minimum Safe Manning Certificate, with senior officers requiring Certificates of Competency and STCW endorsements. MLC 2006 governs working hours, accommodation, and contracts. The captain hire compounds with the other operational decisions across the hold period; the candidate hired having pushed back on itinerary, maintenance, budget, and crew during interview is typically the disciplined hire.
Source: https://firstownersreference.com/07-operations

### What insurance does a superyacht need?
Hull insurance at 0.7 to 1.5 percent of insured value for a well-maintained 40 to 50 metre yacht. P&I cover for crew injury, environmental liability, third-party, and charter guest claims at EUR 500 million third-party limit through Shipowners’ Club or Steamship Mutual. Competitive quotes from at least three of Pantaenius, AON Marine, and Gallagher Specialty before binding. Builder’s risk insurance during refit, with the buyer’s interest noted and policy covering transit between subcontractor sites.
Source: https://firstownersreference.com/07-operations

### Should I operate my yacht as a charter yacht?
Most charter operations subsidise rather than recover ownership cost. The first-year owner benefits from a season or two of private operation before introducing charter. Year four is the practitioner threshold for converting a private-operated yacht to charter; the data of actual use is then in hand. If charter is being considered from year one, work a case based on yacht size, weekly rate, and weeks against the BOAT International published cases. A position on releasing prime-season weeks (mid-July to mid-August in the Mediterranean) is what the published case-study yields rest on.
Source: https://firstownersreference.com/07-operations

### Is it cheaper to own a sailing yacht than a motor yacht?
On a 50 metre yacht at 400 cruising hours per year, the sailing yacht runs EUR 60,000 to 120,000 on annual fuel against EUR 200,000 to 350,000 for the equivalent motor yacht. Crew complement is 9 to 12 on the sailing yacht against 12 to 16 on the motor. Quality sailing yacht builders such as Royal Huisman, Vitters, Baltic, and Perini Navi typically come in 25 to 40 percent below the equivalent motor programme on total seven-year cost (capex plus opex plus depreciation plus residual). The cost shape differs but net annual maintenance is broadly comparable.
Source: https://firstownersreference.com/08-motor-versus-sail

### What is a hybrid superyacht?
Hybrid drive combines diesel power with electric motors and a battery hotel-load capability, allowing the yacht to operate at low load on battery power and dock without the generator running. Heesen’s FDHF (Fast Displacement Hybrid Format), Sanlorenzo’s SX line, and equivalent programmes from Lürssen and Royal Huisman are the production references. Royal Huisman’s 580 kWh installation on the sailing yacht Aquarius II is the published battery reference. Hybrid drive sits between motor and sailing on cost and carbon profile.
Source: https://firstownersreference.com/08-motor-versus-sail

### Does the EU ETS apply to private superyachts?
EU ETS Maritime applies to commercial vessels above 5,000 GT entering EU ports. Most yachts, including 60 to 80 metre motor, sit below the threshold. Above 5,000 GT (110 metre plus motor) the cost is EUR 200,000 to 400,000 per year at current carbon prices. From 2026 the system covers 100 percent of intra-EU emissions and 50 percent of voyages from a non-EU port. HVO (hydrotreated vegetable oil) is a drop-in diesel replacement at 85 to 90 percent lifecycle CO2 reduction; bunker availability is strongest in the Mediterranean.
Source: https://firstownersreference.com/08-motor-versus-sail

### What questions should I ask before buying a yacht?
The ten questions in chapter nine of The First Owner’s Reference are the structural test. Who introduced the yacht and who pays them. Who recommended the lawyer, the surveyor, the management company, and who pays them. Has any party offered services at no cost, and who is paying them. Has every party disclosed their commercial relationships in writing including referral fees, retrocessions, and equity holdings. Is legal counsel independent of the broker, the yard, and the management company. Is the surveyor independent of the seller and broker. Is the owner’s representative paid solely by the owner with no contingent fee.
Source: https://firstownersreference.com/09-decision-framework

### How do I find an independent yacht owner’s representative?
The structural test is independence from yards, brokers, and management companies, with income paid only by the owner and not contingent on a closed transaction. Genuinely independent firms include Foreland Marine, A2B Marine Projects, ULTIMAR, Divergent Yachting, Mariner Technical Services, JMS Yachting, ABL Yachts, KRM Yacht, Saor Alba, and Occam Naval Architecture and Project Management. The Yacht Owners’ Register of Representatives, founded 2023 by SYBAss, the Superyacht Alliance, IAMI, and GUEST, is the cross-industry vetting register.
Source: https://firstownersreference.com/09-decision-framework

### How do I know if a yacht adviser is conflicted?
If a party in the transaction would walk away from a deal that did not benefit the buyer, they are structurally aligned. If they would not, the relationship is not aligned. The independent adviser, paid only by the buyer, is the party for whom this is structurally true. Brokerages with new build arms (Edmiston, Burgess, Y.CO, Ocean Independence, Camper & Nicholsons, Fraser, Cecil Wright, Moran), yacht management firms extending into new build, and naval architects acting as owner’s representatives all carry structural conflicts. Disclosure of the conflict is required; the buyer’s response is to weight the advice accordingly.
Source: https://firstownersreference.com/09-decision-framework

### Do you pay VAT when buying a superyacht as a non-EU resident?
A non-EU resident using the yacht privately can often avoid paying VAT on the purchase by operating under Temporary Admission relief, which lets a non-EU-owned yacht cruise in EU waters without importing it, provided the eligibility and time-limit conditions are met. If the yacht is imported, or the owner is EU-resident, VAT is generally due unless another relief applies. As chapter nine sets out, the ownership structure, VAT position, and importation strategy have to be decided together from the outset; getting the sequence wrong exposes the owner to liabilities and penalties calculated on the value of the yacht.
Source: https://firstownersreference.com/09-decision-framework

### Isle of Man or Malta for yacht ownership?
Neither is universally better; the right jurisdiction depends on the owner’s use, residency and tax position, financing, and succession plans. The Isle of Man is a long-established superyacht jurisdiction with a mature professional services sector, though Quadrant Group estimates an Isle of Man structure is the right answer for only around a quarter of purchases. Malta is often more appropriate for an EU-resident owner who wants VAT-paid certainty within Europe. The British Virgin Islands and the Cayman Islands are further established alternatives. Jurisdiction should be the outcome of the planning, not the starting point.
Source: https://firstownersreference.com/09-decision-framework

### What does a corporate services provider do for a yacht owner?
A corporate services provider designs and administers the ownership structure: maintaining the ownership vehicle, meeting statutory and regulatory obligations, and coordinating the banks, flag administrations, insurers, lawyers, and tax advisers around the yacht. It typically becomes the central point through which those relationships are managed across the life of the asset, and it helps separate the owner’s personal assets from the yacht, providing legal protection should liabilities arise. Fees are charged either on a fixed annual basis or by time spent; owners should understand which model applies.
Source: https://firstownersreference.com/09-decision-framework

### Should a yacht be registered privately or commercially?
The real question is how the owner intends to use the yacht. Commercial registration is not simply a way to offset running costs with charter income; chartering is closer to operating a business, with additional regulatory, tax, and operational obligations, and the owner pays VAT on their own time aboard. Private ownership deserves the same scrutiny before it is assumed to be simpler. The decision should follow genuine intended use rather than what the yacht could do, with flexibility built in where plans may change.
Source: https://firstownersreference.com/09-decision-framework

### What is Temporary Admission relief for yachts?
Temporary Admission is a customs relief that allows a yacht owned by a non-EU resident to be used in EU waters for a limited period without paying import VAT, provided the conditions are met, including that the yacht is not placed at the disposal of an EU resident and is re-exported within the permitted time. It is commonly used for private, non-EU-owned yachts cruising the Mediterranean, and is one of the broad ownership models set out in chapter nine.
Source: https://firstownersreference.com/09-decision-framework

## Glossary

### AIS
Automatic Identification System. A continuous radio broadcast of vessel position, course, speed, identity, and dimensions, mandatory on most yachts above 300 GT.
AIS Class A transponders are mandatory on commercial vessels above 300 GT under SOLAS Chapter V Regulation 19. Class B is voluntary on smaller yachts. AIS data is publicly available through MarineTraffic, VesselFinder, and similar services, which is an operational consideration for owner privacy. Owners can request flagging changes to limit publicly displayed data within the constraints of the regulation.
URL: https://firstownersreference.com/glossary#ais

### Beneficial 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.
Beneficial ownership disclosure regimes vary by jurisdiction. EU member states post-Sovim (CJEU Joined Cases C-37/20 and C-601/20, 22 November 2022) restrict public access; legitimate-interest filters now apply under the post-2024 AML package. UK Companies House Persons with Significant Control register remains publicly searchable. Cayman Islands operates a Beneficial Ownership Transparency Act 2023 (in force July 2024) with Legitimate Interest Access Regulations 2024 (in force February 2025), restricting access to defined applicants.
URL: https://firstownersreference.com/glossary#beneficial-ownership

### BOAT 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.
The BOAT International Global Order Book is the industry reference for new build pipeline. Compiled annually from yard data, it records yachts above 24 metres in build or on order at the time of the count. The 2026 edition (1,093 yachts, down from 1,138 in 2025) marks the second consecutive annual decline by unit count. Average length on the order book has risen to 40.8 metres and 551 GT, the highest ever recorded. Italy is dominant production geography at 568 units, 52 percent of the global order book.
Source: BOAT International, https://www.boatinternational.com/boat-pro/global-order-book/global-order-book-2026-report
URL: https://firstownersreference.com/glossary#global-order-book

### Brokerage
The sale of an existing yacht through an intermediary. The seller pays the commission, 10 percent under the IYBA flat standard or stepped down on larger transactions under the MYBA sliding scale, regardless of which broker introduces the buyer.
Brokerage transactions account for the majority of yacht sales above 24 metres. Commission is paid by the seller from the proceeds of sale, so the buyer is not invoiced directly, but the structure means every party introduced by a brokerage is paid only on a closed transaction. The IYBA standard is a flat 10 percent of the sale price; MYBA uses a sliding scale that decreases at higher transaction values.
URL: https://firstownersreference.com/glossary#brokerage

### Cayman Islands Registry
The Cayman Islands ship registry, a Red Ensign Group Category 1 member able to register yachts of unlimited size. The most common flag at the large end of the superyacht fleet.
The registry is administered by the Maritime Authority of the Cayman Islands from George Town, with survey and client offices in Europe. As a Category 1 Red Ensign Group member it applies MCA-equivalent standards, which is what port-state control officers and marine lenders respond to; mortgages register under an English-law framework, and provisional registration is available ahead of full registration. The Yacht Engaged in Trade programme allows a private yacht of 24 metres or more to charter for up to 84 days per calendar year without converting to full commercial registration.
Source: Maritime Authority of the Cayman Islands, https://www.cishipping.com/
URL: https://firstownersreference.com/glossary#cayman-islands-registry

### Central 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.
Central agency agreements are time-bounded and exclusive. Sub-agency arrangements split the commission between the central agent and any introducing broker, typically at 50/50 on the seller side. The central agent’s incentive is to clear the listing, which can produce pressure for price reductions on hulls that have been listed beyond six months.
URL: https://firstownersreference.com/glossary#central-agency

### Charter 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.
EU charter VAT is taxed at the place of enjoyment. The historic length-based reductions (Maltese, Cypriot, Greek lease schemes) were withdrawn between 2018 and 2020 under EU Commission infringement procedures. Effective-use approaches now apply, with pro-rata reductions documented against international-waters time. Italian charters carry 22 percent standard rate; French and Spanish standard rates apply locally. Maltese charters since the 2019 reform follow effective-use rules. Charter VAT is the operator’s liability; the published charter rate is typically VAT-exclusive.
URL: https://firstownersreference.com/glossary#charter-vat

### Class 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.
Class societies set construction rules, conduct surveys at construction and through service, and issue and maintain class notations. Class is required for most commercial yachts and increasingly for large private yachts above 500 GT. Common notations on superyachts include LR 100A1 SSC, DNV +1A1 LC Yacht, BV I HULL MACH Yacht, RINA C+ Yacht. Class operates parallel to flag-state inspection; the class society can act as a Recognised Organisation under flag delegation.
URL: https://firstownersreference.com/glossary#class-society

### Corporate services provider
A firm that designs, establishes, and administers a yacht’s ownership structure, and coordinates the professional advisers around it across the life of the asset.
A corporate services provider maintains the ownership vehicle, meets statutory and regulatory obligations, and coordinates the banks, flag administrations, insurers, lawyers, and tax advisers around the yacht, typically becoming the central point through which those relationships are managed. It helps separate the owner’s personal assets from the yacht, providing legal protection should liabilities arise, and a degree of privacy consistent with transparency and information-sharing obligations. Fees are charged on a fixed annual basis or by time spent. A provider should work alongside independent legal and tax advisers, not replace them.
URL: https://firstownersreference.com/glossary#corporate-services-provider

### Dual 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.
Dual agency is permitted in most yacht-broking jurisdictions provided it is disclosed. The standard MYBA and IYBA agreements include a dual-agency clause that the buyer signs with the central agent. Disclosure beyond that boilerplate, including any retrocession arrangements with introducing parties, is typically not volunteered.
URL: https://firstownersreference.com/glossary#dual-agency

### ECDIS
Electronic Chart Display and Information System. A computer-based navigation system using vector electronic charts, mandatory on most commercially registered yachts above 500 GT.
ECDIS is mandated under SOLAS Chapter V for vessels engaged on international voyages above 500 GT. Type approval requires conformance with IMO Resolution A.817(19). Bridge officers must be ECDIS-trained per STCW Manila amendments. ECDIS replaces paper charts as the primary means of navigation; paper charts may be retained as backup at flag-state discretion.
URL: https://firstownersreference.com/glossary#ecdis

### ENG1
MCA seafarer medical certificate. Mandatory under STCW for crew working on commercial yachts. Two-year validity; first issue requires UK-approved doctor.
The ENG1 is the UK MCA’s seafarer medical fitness certificate, equivalent to standards under STCW Regulation I/9. Crew on Red Ensign-flagged commercial yachts and many other flags require an ENG1 or equivalent. Validity is two years for under-18s, two years for over-18s with the next certificate due at least one month before the previous expires. Examination covers vision, hearing, cardiovascular, respiratory, mental health, and physical capacity.
Source: UK Maritime and Coastguard Agency, https://www.gov.uk/seafarer-medical-certificates
URL: https://firstownersreference.com/glossary#eng1

### EU 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.
EU ETS Maritime extends the EU’s carbon market to shipping, in phased application: 40 percent of verified emissions covered in 2024, 70 percent in 2025, 100 percent from 2026. The system covers vessels above 5,000 GT entering EU ports, regardless of flag. Most yachts (including 60 to 80 metre motor) sit below the 5,000 GT threshold. Above 5,000 GT, exposure runs EUR 200,000 to 400,000 per year at current carbon prices on a well-utilised vessel. Compliance requires emissions monitoring and EUA surrender.
URL: https://firstownersreference.com/glossary#eu-ets

### Flag 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.
The flag state determines the safety, manning, and operational rules a yacht must comply with, the access to commercial charter regimes, and the tax-and-substance treatment of the owning entity. Cayman, Marshall Islands, and Malta carry roughly 84-day commercial charter allowances under their respective YET, PYLC, and lease regimes. Selection depends on four things in combination: compliance, charter intent, financing, and owner residence.
Source: Red Ensign Group, https://www.redensigngroup.org/
URL: https://firstownersreference.com/glossary#flag-state

### Hull 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.
Hull insurance covers physical loss or damage to the yacht and its machinery. Premium is set by insured value, age, claims history, captain track record, navigation limits, and operational profile (private versus charter). Underwriting is typically through Pantaenius, AON Marine, Gallagher Specialty, or Lloyd’s specialist syndicates. Builder’s risk insurance covers the yacht during refit, with the buyer’s interest noted, and should cover transit between subcontractor sites.
URL: https://firstownersreference.com/glossary#hull-insurance

### Importation
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.
Importation is the customs act by which a non-EU yacht obtains Union goods status. It involves payment of VAT on the customs value of the yacht, plus any applicable duty. Once imported, the yacht can move freely within the EU customs territory without further customs formalities, subject to retention of VAT-paid status. The importing entity must be EU-established for standard importation; non-EU buyers route through an EU representative or via Spanish IPR or French Commercial Exemption to defer the VAT trigger.
URL: https://firstownersreference.com/glossary#importation

### Isle of Man Ship Registry
The British ship registry at Douglas, a Red Ensign Group Category 1 member. A frequent pairing of flag and owning-company jurisdiction for private superyachts.
The Isle of Man Ship Registry is a Category 1 member of the Red Ensign Group, able to register yachts of unlimited size under the British flag with MCA-equivalent oversight. It is particularly common where the owning structure is also Manx: the island’s long-established marine corporate-services sector allows flag, SPV, and administration to sit in one jurisdiction, which simplifies mortgage registration, crew employment, and annual compliance for a private yacht.
Source: Isle of Man Ship Registry, https://www.iomshipregistry.com/
URL: https://firstownersreference.com/glossary#isle-of-man-registry

### ISM Code
International Safety Management Code. The mandatory framework under which yachts above 500 gross tonnes operate. Compliance is documented in a Safety Management System.
The ISM Code, adopted by the IMO in 1993, requires a documented safety management system covering vessel and shore-based operations. For yachts above 500 GT engaged in international voyages, ISM compliance is verified by the flag state or its recognised organisation, with periodic audits and a Document of Compliance held by the company.
Source: International Maritime Organization, https://www.imo.org/en/OurWork/HumanElement/Pages/ISMCode.aspx
URL: https://firstownersreference.com/glossary#ism

### ISPS 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.
Adopted by the IMO under SOLAS in 2002 following the 2001 attacks, the ISPS Code requires vessels above 500 GT engaged on international voyages to operate under an approved Ship Security Plan with a designated Ship Security Officer and Company Security Officer, with port-facility security at three escalating levels. International Ship Security Certificate validity is five years with intermediate verification.
Source: International Maritime Organization, https://www.imo.org/en/OurWork/Security/Pages/MaritimeSecurity-default.aspx
URL: https://firstownersreference.com/glossary#isps

### Knight 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.
The Knight Frank Wealth Report is published annually in early March. The Wealth Sizing Model uses HM Revenue and Customs UHNW data plus Capgemini, BOAT International, and proprietary research to size the global UHNW population (USD 30m+ wealth). The 2026 edition (20th anniversary) places the population at 713,626, up 162,191 over five years, with 41 percent of new UHNWIs created in the United States. The yacht spread (sourced from BOAT International) records USD 8.5 billion 2025 transactions, 70 percent year-on-year rise.
Source: Knight Frank Wealth Report, https://www.knightfrank.com/research/reports/wealthreport
URL: https://firstownersreference.com/glossary#knight-frank-wr

### LMAA arbitration
London Maritime Arbitrators Association. The default arbitration forum for yacht new build and major refit contracts under English law.
LMAA arbitration is the practitioner default for English-law yacht contracts. The forum is private, the awards binding, and the LMAA Terms (current 2021 edition) provide a developed procedural framework. English law plus LMAA arbitration is the standard dispute clause in SYBAss-yard new build contracts and most major refit contracts. Selection of LMAA over court litigation reflects confidentiality, speed, and the specialist arbitrator pool with shipbuilding and yacht expertise.
Source: London Maritime Arbitrators Association, https://lmaa.london/
URL: https://firstownersreference.com/glossary#lmaa

### Malta flag
The ship register of Malta, the largest in Europe by tonnage and the leading EU flag for yachts. Registration under an EU flag changes the charter and VAT position inside the Union.
Malta is an EU member state, so a Maltese-flagged commercial yacht operates inside the Union on a different footing from the offshore registries: EU charter operations do not depend on Temporary Admission mechanics, and the reformed Maltese lease structure remains available for VAT planning on documented effective use. The Commercial Yacht Code 2025 governs commercial registration, and includes a voluntary route to ISM certification for yachts below the mandatory 500 GT threshold. The trade-off against Cayman or RMI is a fuller EU regulatory and substance environment for the owning entity.
Source: Transport Malta, Merchant Shipping Directorate, https://www.transport.gov.mt/maritime
URL: https://firstownersreference.com/glossary#malta-flag

### MARPOL 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.
MARPOL Annex VI sets emission limits for sulphur, nitrogen oxides, particulate matter, and CO2 from ships. The 2020 global sulphur cap reduced fuel sulphur content to 0.5 percent (0.1 percent in Emission Control Areas). NOx Tier III applies to engines on vessels constructed after 1 January 2016 operating in NOx ECAs. Yachts above 5,000 GT entering EU ports are now within EU ETS Maritime; below 5,000 GT, the cost is not yet direct.
URL: https://firstownersreference.com/glossary#marpol

### Marshall Islands Registry
The open registry of the Republic of the Marshall Islands, administered by International Registries, Inc. Applies the international conventions without an additional national overlay, at competitive cost.
The RMI flag is administered by International Registries, Inc. from Reston, Virginia through a worldwide office network, which in practice means responsive service across time zones. Its regulatory posture is to apply the international framework (STCW, MLC, the applicable yacht code) without a layer of additional national requirements on top, which keeps crewing flexible and costs below the premium British registries. The Private Yacht Limited Charter provision allows a private yacht of 24 metres or more to charter for up to 84 days per calendar year, the RMI counterpart to Cayman’s YET programme.
Source: International Registries, Inc., https://www.register-iri.com/
URL: https://firstownersreference.com/glossary#marshall-islands-registry

### MLC 2006
Maritime Labour Convention 2006. The treaty governing crew working conditions, contracts, hours, and welfare. Applies to most commercially operated superyachts.
MLC 2006 sets minimum standards for seafarers’ working and living conditions, including employment agreements, hours of work and rest, accommodation, recreational facilities, food, medical care, and social security. Yachts above 500 GT engaged in international voyages must hold a Maritime Labour Certificate, with a five-year validity and intermediate inspection.
Source: International Labour Organization, https://www.ilo.org/global/standards/maritime-labour-convention/lang--en/index.htm
URL: https://firstownersreference.com/glossary#mlc

### MOA
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.
The MOA is signed at offer-acceptance and amended through to closing. Key clauses cover title warranties, inventory, deposit handling and escrow, condition at delivery, deficiencies remediation, governing law and jurisdiction, and the closing protocol. MYBA Memorandum of Agreement (current version 2024) is the dominant form. Independent counsel review at heads of terms is the buyer’s structural protection; the form’s defaults often favour the seller’s broker.
Source: MYBA Worldwide Yachting Association, https://www.myba-association.com/
URL: https://firstownersreference.com/glossary#moa

### MYBA
Mediterranean Yacht Brokers Association. Publishes the standard charter agreement used across most of the Mediterranean charter market.
MYBA publishes the standard charter agreement (MYBA Charter Agreement, current edition 2024), the standard memorandum of agreement for sale and purchase, the inventory form, and the central agency agreement. The MYBA forms govern the majority of charters above 24 metres in the Mediterranean and Caribbean.
Source: MYBA Worldwide Yachting Association, https://www.myba-association.com/
URL: https://firstownersreference.com/glossary#myba

### OBBBA 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.
The One Big Beautiful Bill Act of 2025 (in force January 2025) restored 100 percent bonus depreciation on qualifying business assets including yachts placed in commercial service between 20 January 2025 and 21 December 2029. Conditions, drawn from US tax-law business-use principles, require greater than 50 percent charter use and greater than 50 percent US-waters time, with contemporaneous documentation. Identified by Stewart Campbell of BOAT International as the largest single driver of the 2025 surge that took global yacht transactions to USD 8.5 billion. Pre-transaction US yacht-tax counsel review essential.
URL: https://firstownersreference.com/glossary#obbba

### Owner’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.
The owner’s representative manages the buyer’s interests across yard selection, contract drafting, technical specification, build supervision, milestone inspection, snag-listing, and delivery acceptance. The independence test is whether the representative’s income is contingent only on the buyer’s instructions, with no yard commission, no broker referral, and no contingent-fee arrangement on closing.
URL: https://firstownersreference.com/glossary#owners-representative

### P&I
Protection and Indemnity. Mutual liability insurance covering crew injury, environmental damage, third-party claims, and charter-guest exposure. Typically written by mutual clubs.
P&I cover is the third-party and crew-liability layer above hull insurance. Yacht-specialist mutuals include Shipowners’ Club and Steamship Mutual; commercial insurers including Pantaenius, AON, Gallagher Specialty, and Lloyd’s syndicates also write yacht P&I. Standard limits for a 40 to 50 metre yacht run to EUR 500 million third-party. P&I covers MLC repatriation liability for crew, environmental damage including bunker spill, and charter-guest claims; hull insurance covers the asset itself.
URL: https://firstownersreference.com/glossary#p-and-i

### Polar Code
International Code for Ships Operating in Polar Waters. Mandatory IMO framework covering vessel design, equipment, and operations in Arctic and Antarctic waters.
The Polar Code (in force January 2017 for new build, July 2018 for existing) sets safety, training, and environmental standards for vessels in Arctic and Antarctic waters. Yachts intended for high-latitude cruising require Polar Ship Certification, with categories A, B, or C reflecting ice exposure. Specific build features include winterised systems, ice-strengthened hulls (Class polar notation PC1 to PC7), enhanced damage stability, and trained Polar-rated officers.
Source: International Maritime Organization, https://www.imo.org/en/OurWork/Safety/Pages/polar-default.aspx
URL: https://firstownersreference.com/glossary#polar-code

### Pre-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.
A pre-purchase survey covers structural, mechanical, electrical, and operational systems, typically over four to seven days afloat plus a haul-out. Cost on a 40 to 50 metre yacht runs USD 25,000 to 60,000 inclusive of paint specialist and class-society inspector. The buyer engages the surveyor directly, and the surveyor’s fee is paid by the buyer regardless of whether the deal closes.
URL: https://firstownersreference.com/glossary#pre-purchase-survey

### Punch 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.
The punch list (or snag list) is the buyer’s record of items not at acceptance condition at delivery. A diligent owner’s representative on a 40 to 50 metre new build will typically generate 800 to 1,500 items by delivery; the published Inglis case at ULTIMAR documented 1,200 items where the family office’s own count was 100. Punch-list management with the yard, with a withheld retention against final closure, is the standard discipline; final payment held against punch-list closure is the buyer’s lever.
URL: https://firstownersreference.com/glossary#punch-list

### Red 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.
The Red Ensign Group comprises Category 1 registries (UK, Cayman Islands, Bermuda, BVI, Gibraltar, Isle of Man) which can register vessels of unlimited tonnage and type, and Category 2 registries (Anguilla, Falkland Islands, Guernsey, Jersey, Montserrat, St Helena, Turks and Caicos) which are limited to commercial ships and pleasure vessels up to 150 GT, extendable to 400 GT by agreement with the UK. All members operate to MCA-equivalent standards under the REG Yacht Code.
Source: Red Ensign Group, https://www.redensigngroup.org/
URL: https://firstownersreference.com/glossary#red-ensign-group

### Refit
Major maintenance, modernisation, or rebuild work undertaken at a specialist yard. Typical scopes range from cosmetic refresh to multi-year structural rebuild.
Refit is the umbrella term for periodic capex on a yacht above survey-and-class minimum. Mid-life refits at year five to seven typically cover paint, soft furnishings, and selective system upgrades. Full refits at year ten to fifteen include structural and propulsion work and can run 30 to 60 percent of the yacht’s pre-refit market value. Overrun against initial budget runs 30 to 50 percent on the empirical opened-up-vessel pattern.
URL: https://firstownersreference.com/glossary#refit

### Retrocession
A commission rebate paid quietly between counterparties, often from a yard or supplier back to a referring broker, captain, or management company. Frequently undisclosed.
Retrocession arrangements are legal in most jurisdictions provided they are disclosed. The structural problem is that disclosure is typically not volunteered. The OnboardOnline legal column has stated the position plainly: retrocession is permitted only where the recipient discloses it to the principal whose interests they represent.
URL: https://firstownersreference.com/glossary#retrocession

### Sea 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.
The sea trial is the buyer’s last technical inspection before closing. Trial scope covers the failure modes the pre-purchase survey identified, plus stability, vibration, noise, electronics under load, propulsion at full power, and emergency systems. The buyer’s own captain candidate (and where relevant chief engineer) should be present alongside the surveyor. Findings can support renegotiation; readiness to walk away if material issues surface is the buyer’s structural lever.
URL: https://firstownersreference.com/glossary#sea-trial

### Spanish 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.
Spanish IPR (Inward Processing Relief) is the EU customs regime under which a non-EU-flagged yacht can enter Spain for refit work without triggering EU VAT or import duty, provided the yacht is re-exported on completion. The regime is widely used at MB92 Barcelona, STP Palma, and Astilleros de Mallorca. Equivalent regimes exist in France (Commercial Exemption) and Italy.
URL: https://firstownersreference.com/glossary#spanish-ipr

### Spanish 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.
The Impuesto Especial sobre Determinados Medios de Transporte applies at 12 percent of the yacht’s value when registered in Spain for private leisure use by a Spanish-resident owner or used in Spanish waters by a Spanish resident for more than 183 days. Yachts engaged in qualifying commercial charter activity, with documented charter contracts and a Spanish charter licence, are exempt. The tax is one of the structural reasons that VAT-paid yachts owned by Spanish residents are commonly held through non-Spanish SPVs operating commercially.
URL: https://firstownersreference.com/glossary#spanish-matriculation-tax

### SPV (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.
Single-yacht SPV is the practitioner-default ownership structure. Common SPV jurisdictions include BVI, Cayman, Jersey, Guernsey, Isle of Man, Malta, Marshall Islands, and Luxembourg. Reasons for the structure: limited liability ringfencing per asset, clean sale execution as a share sale (preserves VAT-paid status, registration history, crew contracts), marine-lender mortgage perfection, charter VAT routing through the EU SPV when relevant, succession transfer through share movement. Burgess, Camper & Nicholsons, Y.CO, Dixcart, IQ-EQ, and Praxis all default-recommend single-yacht SPV.
URL: https://firstownersreference.com/glossary#spv

### Stage 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.
Stage payment loading reflects the yard’s working capital requirement against build progress. Industry-typical loading is 50 to 70 percent of contract value paid before delivery, with the balance at delivery and final acceptance. Heavier front-loading is yard-favourable and may signal yard cash-flow pressure. Each stage payment should be backed by a refund guarantee from a tier-one bank with pay-on-demand wording; surety wrappers are weaker. Payment should be tied to verified milestone completion, not calendar dates.
URL: https://firstownersreference.com/glossary#stage-payments

### STCW
Standards of Training, Certification, and Watchkeeping for Seafarers. The IMO convention setting global minimum standards for seafarer competency.
STCW 1978 as amended (Manila amendments 2010) sets minimum standards for training, certification, and watchkeeping. All seafarers on commercially operated yachts above 500 GT require STCW Basic Safety Training as a minimum. Senior officers require STCW Certificates of Competency at deck (Master, Chief Mate, OOW), engineering (Chief Engineer, Second Engineer, EOOW), and other functional levels. Flag states issue endorsements recognising CoCs from other flags.
Source: International Maritime Organization, https://www.imo.org/en/OurWork/HumanElement/Pages/STCW-Convention.aspx
URL: https://firstownersreference.com/glossary#stcw

### SYBAss
Superyacht Builders Association. Membership signals an independently audited ability to deliver new builds above 40 metres.
SYBAss membership is granted to yards that demonstrate, through independent audit, the capacity to deliver yachts above 40 metres. Membership covers Northern European custom yards (Feadship, Lürssen, Oceanco, Heesen, Royal Huisman, Vitters, Baltic) and a small number of Italian and Turkish builders. SYBAss founded the Yacht Owners’ Register of Representatives jointly with the Superyacht Alliance, IAMI, and GUEST.
Source: Superyacht Builders Association, https://www.sybass.org/
URL: https://firstownersreference.com/glossary#sybass

### Temporary 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.
Temporary Admission (TA) permits a non-EU yacht to enter EU customs territory for a maximum of 18 months in any one period, with an aggregate cap of up to 10 years cumulative. The yacht must be non-EU registered, non-EU owned, and used by non-EU established persons; commercial charter from EU ports under TA is prohibited. Sale of a yacht under TA inside the EU triggers VAT and duty. TA resets when the yacht leaves EU waters and obtains a third-country customs stamp.
Source: European Commission Taxation and Customs Union, https://taxation-customs.ec.europa.eu/document/download/fa095d6b-45dd-4c7a-94c7-bad21d0473a9_en
URL: https://firstownersreference.com/glossary#temporary-admission

### Tier 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.
Tier III applies to marine diesel engines on vessels constructed after 1 January 2016 operating in NOx Emission Control Areas (the North American ECA, the US Caribbean ECA, the Baltic Sea NECA, and the North Sea NECA). The standard requires roughly 75 percent reduction in NOx emissions versus Tier I, achieved through SCR (selective catalytic reduction) or EGR (exhaust gas recirculation). New build superyachts crossing into NECAs must specify Tier III propulsion at design.
URL: https://firstownersreference.com/glossary#tier-iii

### VAT 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.
The applicable VAT regime depends on the yacht’s flag state, the owner’s residence, the area of operation, and whether the yacht is operated privately or commercially. EU member states harmonised their charter VAT treatment under Council pressure between 2018 and 2020; length-based reductions were withdrawn and replaced with effective-use approaches.
URL: https://firstownersreference.com/glossary#vat-regime

### VAT-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.
EU VAT-paid status attaches to the hull, not the flag. A Maltese-flagged yacht owned by a non-EU SPV is not automatically EU VAT-paid; conversely a Cayman-flagged hull on which import VAT was settled in Italy is EU VAT-paid. Documentary evidence is the importation declaration and VAT receipt. Loss of VAT-paid status can occur on certain ownership changes, modifications, or extended absence from EU waters under specific circumstances.
URL: https://firstownersreference.com/glossary#vat-paid-status

### Yacht 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.
YET frameworks exist under Cayman Islands, Marshall Islands, Isle of Man, and Bahamas registries, allowing private yachts to undertake limited commercial charter without converting to a fully commercial registration. The standard allowance is 84 days per calendar year, restricted to specified jurisdictions (typically France, Monaco, with some flags adding Croatia, Greece, or Italy). YET requires conversion to a Yacht Code Chapter II compliance standard for the duration of charter operation.
Source: Cayman Shipping Registry, https://www.cishipping.com/services/yacht/yacht-engaged-in-trade
URL: https://firstownersreference.com/glossary#yacht-engaged-in-trade

### Yacht 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.
A yacht management company handles the day-to-day operational, regulatory, financial, and crew matters that the owner does not engage with directly. Selection should be made independently of the broker who introduced the yacht, since the management contract is recurring revenue and brokerages have established management arms or referral relationships that may not align with the owner’s interest.
URL: https://firstownersreference.com/glossary#yacht-management-company

### YORR
Yacht Owner’s Representative Register. The cross-industry register on which qualifying owner’s representatives are listed; administered by the Superyacht Alliance for Professional Standards and searchable at superyachtalliance.org/register/register-table/.
YORR is the cross-industry register of vetted owner’s representatives, launched at The Superyacht Forum in Amsterdam in November 2024 by SYBAss, the Superyacht Alliance for Professional Standards, IAMI, and GUEST. Inclusion requires demonstrated independence from yards, brokers, and management companies, the SYBAss-aligned YORP training (practitioners with three or more approved large refit or new build projects can register via Unit 40 alone; all other candidates complete the full 200-hour programme over four courses), a CV audit, and a documented track record on builds above 40 metres. The register is published as a public table at superyachtalliance.org/register/register-table/ and is searchable by firm and by named principal; buyers considering an owner’s representative can verify the firm and the principal directly on the register before engagement.
Source: Yacht Owner’s Representative Register, https://superyachtalliance.org/register/register-table/
URL: https://firstownersreference.com/glossary#yorr

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