Superyachts and vessels: Maritime legal support in Thailand
LATEST NEWS: Regulatory framework for superyacht charter license (Thai Temporary Charter License) announced to be modified in 2017.
Building, buying, selling, owning, operating and managing a superyacht or vessel in Thailand
Ownership of a yacht or other seagoing vessel in Thailand, the “Marina Hub of ASEAN”, provides the top-notch of a luxury lifestyle. PUGNATORIUS advises and assists international clients in on the legal and tax aspects of the construction, sale, purchase, registration and operation of such particular asset class. Whether the client prefers to build, buy from the shipyard or a pre-owned vessel or sell his luxury yacht, the law firm guides him and also handles the whole process, as well as coordinates and communicates with the Thai or international participants through the whole life cycle of the yacht. Compared to buying a new ship, the acquisition of a pre-owned yacht requires some extra legal and tax considerations.
PUGNATORIUS offers clients the ability to acquire yachts by way of an offshore structure, allowing for the substantial tax savings which would otherwise be payable on the relevant acquisition. Different types of structure are available, and, in each case, the law firm offers a one-stop service, undertaking all of the relevant corporate formalities and making all of the required taxation notifications. The flag is a matter of image for every yacht owner as there are substantial differences with respect to integrity, appearance, and reliability of particular jurisdictions.
The law firm is well connected to the Marine Department (MD), part of the Thai Ministry of Transport. The MD is formerly known as Harbour Department which has incorporated maritime undertakings which used to belong to the former Office of the Maritime Promotion Commission. It is responsible for supervising, promoting and developing water transport system as well as to link other modes of transport in order to support the transport of passengers and cargoes, ports, shipyards, Thai fleet and enterprises concerned and to ensure convenience, rapidity and safety for the people and also to support and to strengthen the export sector.
Maritime legal advice in the twelve areas of the yachting industry
Each case is different and the firm’s tailor-made legal advice depends on the nationality and residence of the yacht owner, length, and tonnage, existing registration of yacht, historical proof of ownership title, the usage of the yacht for private or for charter purposes, tax status, as well as specific crew and operational considerations. The law firm assists in these twelve steps and aspects of yacht ventures:
- Corporate structure: Designing, creating and managing of marine ownership structures including set-up of Thai, international and offshore yacht owning and yacht management companies that provide a tailor-made acquisition and operation concept from the legal, business, tax and financial point of view. Compliance with Thai foreigner legislation and a protective ring fence from other business and personal affairs. Ship mortgage and maritime lien.
- Sale and purchase: Drafting and negotiating of domestic or cross-border vessel sale and purchase agreements and supporting documents. Agreements for the acquisition of additional equipment. Arranging surveys and valuations. Monitoring of acceptance, delivery and yacht conveyancing, the transfer of legal title of the yacht from one person to another.
- Legal yachting framework: Advice on Thai yachting legislation, regulations and industry practice including the Navigation in Thai Waters Act, Thai Vessels Act, Prevention of Ship Collision Act, Mercantile Marine Promotion Act and other relevant laws. SOLAS Convention.
- Due diligence: Vessel due diligence regarding yacht title search, ownership history, seaworthiness, builder’s certificate, vessel documentation, etc.
- Financing: Legal assistance on the financing or refinancing of both new and existing motor and sailing vessels, including leasing schemes.
- Import and export of Thai yachts and foreign vessels into and out of Thailand. Customs duties, Customs Department procedures, VAT calculation, guarantee agreement of the importer,
- Tax planning of ownership structure, funding and yacht operations including VAT optimization, income and excise tax issues, taking advantage of tax write-offs like interest deductions, depreciation, deducting expenses like berthing, insurance, maintenance, property taxes and more.
- Registration; Private and commercial yacht registration under Thai or international flags and flags of convenience. Advice which flag to choose from the viewpoint of taxes, liability, operating requirements. Change of ownership, flag dismission, and reflagging issues. The registration is the most critical issue as almost all legal issues are determined by the flag.
- Repair: Drafting and negotiating of ship repair, maintenance and improvement agreements with Thai or international shipyards. Legal representation of vessel owners and repair yards and shipyards. Sea trial assistance.
- Crew: Drafting of crew agreements including crew screening regarding diplomas, compliance with the corresponding flag regulations, insurance, and working contracts, including contracting, salaries and social security issues.
- Charter: Legal advice and assistance on boat chartering issues for owner, charterer and charter broker or charter agent. The distinction between demise charter (bareboat charter) and crewed charter (time and voyage charter, commercial charter). Charter license requirements and application process. Charter brokerage agreement between owner and broker/agent.
- Foreign-flagged superyachts: Multiple entry superyacht charter license (Thai Temporary Charter License). Visa, tax and customs issues by bringing foreign-flagged vessels to Thailand.
- Currently, the law firm does not assist in ship arrest procedures under The Arrest of the Ships Act.
PUGNATORIUS provides reliable and high-quality advice on matters relating to yachts and other high-value purchases. Buying a yacht is a significant investment and obtaining quality legal advice will ensure your investment is a wise one. We would strongly encourage owners to contact PUGNATORIUS at the earliest possible stage in the yacht acquisition process, ideally following the selection of a particular yard or vessel but before any contractual arrangements are entered into.
PUGNATORIUS provides legal advice for the (re-)structuring of the current ownership and operating structure for an enhanced protection and privacy for the yacht owner and his personal assets as well as a more tax-efficient approach. This is not only relevant for new yacht owners, but also for existing owners who’s yachts are privately registered and for captains and owners representatives responsible for a new build project.#PugnatoriusPosh