I just agreed to buy a boat in Italy. Now what do I do?

[Time Out]

You have to be a MYBA member to obtain the latest e contract. Even then the member company has to buy ‘credits’ for each contract.

 

[westernman]

You have to be a MYBA member to obtain the latest e contract. Even then the member company has to buy ‘credits’ for each contract.

Cost is peanuts in relation to the transaction you are undertaking.

 

[Time Out]

Cost is peanuts in relation to the transaction you are undertaking.

Apologies I was not criticising the costs I was explaining the process for obtaining a MYBA contract.

 

[PowerYachtBlog]

Thanks for the comments.

The owner is an individual and I plan to own it in my name and to keep it on the Maltese registry to avoid the hassle and cost of measured surveys. I take it the only advantage of company ownership is of time delays as compared to private registration? I understand company ownership may have some liability advantages, but I'm not sure I need that.

There shouldn't be time issues with the survey and sea trial. The vendor indicates he is flexible enough.

Unless the Italian owner has a Maltese residence with relative ID, he can only have it on his name with a legal representative. That has to be a Maltese lawyer, accountant/auditor, or a notary.
What you pay to one of the above is subject to who the lawyer is, but usually a legal representative is always paid north of four figures a year.
It will be the same for you if you want to keep it on your name.

 

[PowerYachtBlog]

You are correct, Malta requires a company ownership for a UK citizen and that costs €85/yr plus agent fees and probably legal set up fees. The Malta ship registry is €175/yr. Not a deal breaker, but it may well be best to move to a cheaper jurisdiction and pay the measurement survey costs.

Those figures are totally wrong.
Company formation is 200 euros, plus agency or lawyer fees add a minimum of 800k
Renewal of a certificate is 200 euros a year plus agency fees for you. Initial registration is just under 400 euros, add another 100 for MMSI. Plus agency or lawyer firm that is about another 1k.
That the company needs to submit its audited accounts every year if you make zero cost this from 1-2k a years by the agency.

 

[Dogone]

Unless the Italian owner has a Maltese residence with relative ID, he can only have it on his name with a legal representative. That has to be a Maltese lawyer, accountant/auditor, or a notary.
What you pay to one of the above is subject to who the lawyer is, but usually a legal representative is always paid north of four figures a year.
It will be the same for you if you want to keep it on your name.

Those figures are totally wrong.
Company formation is 200 euros, plus agency or lawyer fees add a minimum of 800k
Renewal of a certificate is 200 euros a year plus agency fees for you. Initial registration is just under 400 euros, add another 100 for MMSI. Plus agency or lawyer firm that is about another 1k.
That the company needs to submit its audited accounts every year if you make zero cost this from 1-2k a years by the agency.

Thanks for that. I knew there would be more costs, but that adds up to a very expensive service and more than I expected. I'll probably be going to the UK or Jersey. Much cheaper even with the extra tonnage measurement cost. I wonder if Poland might be an option. In the EU, which might make the authorities happier a little with possibly fewer VAT challenges. I think it has some advantages, not sure what though. Still I have a few hurdles to overcome first.

 

[westernman]

Thanks for that. I knew there would be more costs, but that adds up to a very expensive service and more than I expected. I'll probably be going to the UK or Jersey. Much cheaper even with the extra tonnage measurement cost. I wonder if Poland might be an option. In the EU, which might make the authorities happier a little with possibly fewer VAT challenges. I think it has some advantages, not sure what though. Still I have a few hurdles to overcome first.

SSR is the way to go if UK resident.
Otherwise, if UK citizen but not resident, UK Part 1. It is a little more hassle, but less expensive than almost any other option.

 

[Dogone]

SSR is the way to go if UK resident.
Otherwise, if UK citizen but not resident, UK Part 1. It is a little more hassle, but less expensive than almost any other option.

Yes, it is very cheap, but it's no use if I want to secure finance on it.

I may do it anyway as in intermediate step to give me a little risk protection and to ensure I don't have hassles with having no yacht registration papers. There is always a period between de-registering and registration where you are vulnerable to being terrorised by officialdom for lack of paperwork.

Also some insurers have requirements as to how and where it is registered. I will check into all that before I make my move.

 

[westernman]

Yes, it is very cheap, but it's no use if I want to secure finance on it.

I may do it anyway as in intermediate step to give me a little risk protection and to ensure I don't have hassles with having no yacht registration papers. There is always a period between de-registering and registration where you are vulnerable to being terrorised by officialdom for lack of paperwork.

Also some insurers have requirements as to how and where it is registered. I will check into all that before I make my move.

Have you asked a marine finance company?
I don't think they care too much about how you register it providing you can show the previous owner de-registered it.
UK part 1 is usually considered adequate proof of title for mortgage purposes.

Have you spoken to some insurance companies?
UK part 1 or UK SSR will satisfy all UK based insurers and UK part 1 will probably satisfy most foreign ones as well.

 

[Dogone]

Have you asked a marine finance company?
I don't think they care too much about how you register it providing you can show the previous owner de-registered it.
UK part 1 is usually considered adequate proof of title for mortgage purposes.

Have you spoken to some insurance companies?
UK part 1 or UK SSR will satisfy all UK based insurers and UK part 1 will probably satisfy most foreign ones as well.

UK funders of moderate amounts require you to be on full UK part 1. Not the SSR. I've encountered this issue before. No doubt there are outliers and exceptions. They need to easily get their money back should things go bad and this rule protects them fairly well because mortgages can be registered under Part 1, but cannot be registered on the SSR.

Insurers will be fine with UK part 1 or 3 registers, some foreign registries are not OK, but nsurers have confirmed the ones I am considering will be fine.

 

[jointventureII]

Those figures are totally wrong.
Company formation is 200 euros, plus agency or lawyer fees add a minimum of 800k
Renewal of a certificate is 200 euros a year plus agency fees for you. Initial registration is just under 400 euros, add another 100 for MMSI. Plus agency or lawyer firm that is about another 1k.
That the company needs to submit its audited accounts every year if you make zero cost this from 1-2k a years by the agency.

This is about spot on, we (well, not we, an owner) had a 37m yacht which was under the Maltese flag and these costs are correct from my experience.

 

[Dogone]

So, we are nearly there. Deal and contract agreed, but not yet executed. Title is established, just the VAT as a hurdle.

The boat is on its second owner. The first owner was an Italian with the boat registered in Malta and bought via an Italian leasing company. The final invoice is available transferring ownership from the leasing company to the first Italian owner after 4 years. The amount on the final invoice represents about a quarter of the new boat price and VAT is shown as paid at 22%, the Italian VAT rate. No other leasing company documentation or invoices is available.

There is an invoice and Bill of Sale from the first owner to the second owner, also an Italian individual, also registering the boat in Malta.

So we have some sort of VAT evidence, but not complete evidence. No confirmation of 'VAT PAID' from the Italian, nor the Malta authorities. No full paper trail of all the lease payments with VAT invoices. We have informal assurances from registration agents that Italian leasing companies cannot lease without VAT being paid and cannot release title on a leasing agreement unless all the VAT obligations are paid, but we are not sure if that is is correct or if the authorities won't make trouble, especially as the intention is to register on the SSR and to keep in Italy or Greece. Also, when it comes to sell if the fourth owner will be unhappy with the VAT documentation?

Any comments on this or similar experiences to share?

 

[westernman]

So, we are nearly there. Deal and contract agreed, but not yet executed. Title is established, just the VAT as a hurdle.

The boat is on its second owner. The first owner was an Italian with the boat registered in Malta and bought via an Italian leasing company. The final invoice is available transferring ownership from the leasing company to the first Italian owner after 4 years. The amount on the final invoice represents about a quarter of the new boat price and VAT is shown as paid at 22%, the Italian VAT rate. No other leasing company documentation or invoices is available.

There is an invoice and Bill of Sale from the first owner to the second owner, also an Italian individual, also registering the boat in Malta.

So we have some sort of VAT evidence, but not complete evidence. No confirmation of 'VAT PAID' from the Italian, nor the Malta authorities. No full paper trail of all the lease payments with VAT invoices. We have informal assurances from registration agents that Italian leasing companies cannot lease without VAT being paid and cannot release title on a leasing agreement unless all the VAT obligations are paid, but we are not sure if that is is correct or if the authorities won't make trouble, especially as the intention is to register on the SSR and to keep in Italy or Greece. Also, when it comes to sell if the fourth owner will be unhappy with the VAT documentation?

Any comments on this or similar experiences to share?

Why not keep it on the Maltese registry?

 

[PaulRainbow]

Why not keep it on the Maltese registry?

Post #65 ?

 

[westernman]

Post #65 ?

Thanks. I remember now - that was quite some time ago!

 

[MapisM]

So we have some sort of VAT evidence, but not complete evidence. No confirmation of 'VAT PAID' from the Italian, nor the Malta authorities. No full paper trail of all the lease payments with VAT invoices.
We have informal assurances from registration agents that Italian leasing companies cannot lease without VAT being paid and cannot release title on a leasing agreement unless all the VAT obligations are paid, but we are not sure if that is is correct or if the authorities won't make trouble

The answer to your last two questions are, respectively, "yes that's correct" and "impossible to know for sure, but very unlikely".

Ref. authorities' confirmation of VAT paid, such document simply doesn't exist.
It surely doesn't in Italy anyway, but I very much doubt it exists in Malta too - or also in the UK, for that matter.
What should and pretty sure did exist is the first invoice from the boatbuilder to the leasing company. That is the invoice showing the VAT applied on the new boat price (albeit at the reduced rate allowed by the Maltese scheme), proving that VAT was paid upon purchase.
Such invoice should normally have been handed over to the lessee, who should have kept it with the rest of the boat papers.
And it might be possible to get a copy either from the lessor or from the builder, who should have it in their accounting files.
Though for Italian companies there's no obligation to keep such papers after 10 years from the relevant fiscal year.
BUT, that was actually a transaction between the boatbuilder and the lessor, so arguably there wasn't any obligation for the lessee to keep a copy of it for proving anything. Bottom line, I would rate the invoice upon redemption as good enough, in this instance.

All that said, I would never register in the UK a Med boat already registered in any EU Country, just to avoid the hassle of the 18 months temporary admission, and also because the moment it's registered in the UK, the boat loses her "VAT paid" status. But each to their own on that!

 

[DavidJ]

…. and also because the moment it's registered in the UK, the boat loses her "VAT paid" status.

This is a new one for me. Are you sure about that?
The VAT you refer to I assume is EUVAT. I find it hard to believe that you loose this.
Then what happens?

 

[westernman]

This is a new one for me. Are you sure about that?
The VAT you refer to I assume is EUVAT. I find it hard to believe that you loose this.
Then what happens?

VAT paid status has nothing to do with flag state.

 

[jfm]

... register in the UK a Med boat already registered in any EU Country, ... hassle of the 18 months temporary admission, and also because the moment it's registered in the UK, the boat loses her "VAT paid" status.

That ain't correct

 

[MapisM]

I find it hard to believe that you loose this.

Well, there isn't really such thing as a "VAT paid status", to start with - apologies for previous brevity.
What I meant is that if upon purchase you register the boat in a non-EU Country, the onus of proof that the boat wasn't actually imported upon purchase (hence being VAT-table) is reversed.
And that's a potential claim that personally I'd rather not deal with, if possible - though such claim can indeed be rejected with proper evidence of all transactions history.