Plain sailing on both sides of the Atlantic
For many yacht owners, the dream is simple. Winters in the Bahamas, summers cruising the Med. It's a well-established course. Every year, yachts follow the sun west for the Caribbean season, then head east again as summer arrives in Europe.
The reality takes a little more planning. The US and Europe have very different rules on flag, tax, charter and crew, and it's these differences that catch owners out.
The good news? With the right plan, you can enjoy the best of both worlds. Here’s everything you need to know before you cross the Atlantic.
Every decision flows from one simple question: Will your yacht be used privately, chartered, or both?
Private use means lighter regulation and simpler crewing. Chartering brings in income, but it also brings commercial codes, safety surveys and VAT. Many owners choose both, chartering for part of the year to help cover running costs, which typically total around 10% of the value of the yacht each year.
Your flag is a bit like your yacht's passport. It decides which rules apply on board, wherever you drop anchor. Here's how the main options compare.
A US flag is only open to US citizens and qualifying US companies. Because of these restrictions, many owners choose the Cayman Islands instead, a Red Ensign flag that's respected worldwide and well suited to larger yachts.
One thing worth noting early on: Foreign-flagged yachts generally can't be chartered in US waters. This is because of long-standing US laws, including the Passenger Vessel Services Act, which reserve paid passenger trips in US waters for US vessels.
A foreign-flagged yacht can visit the US on a cruising licence, which are usually valid for 12 months. However, you can only apply for a cruising licence if your flag has a reciprocal agreement with the US.
If you want to keep the yacht in the US for longer, you’ll usually need to import it. This brings two main costs to plan for.
Timing and residency can both affect what you pay, so it's worth planning before you arrive.
Chartering comes with its own rules. To run crewed charters in US waters, the yacht generally needs to be US-owned and US-built. A foreign-built yacht can only take crewed charters with a MARAD small vessel waiver. These waivers are limited to 12 passengers, the yacht must be at least three years old, and approval isn’t guaranteed.
The rules are complex, so if you plan to charter, take advice before you buy or import.
In Europe, it's all about VAT. What you pay depends on who you are and how you use the yacht.
Under the Temporary Admission scheme, yachts that are non-EU registered, non-EU owned, and used by non-EU residents can usually stay in the EU for up to 18 months without paying VAT.
EU residents, or commercial yachts that charter, will normally need to pay VAT or set up a compliant commercial structure. Getting this wrong can be costly. VAT is charged on the yacht’s full value, at rates around 20% in most EU countries.
Chartering in Europe also comes with local rules, as some countries limit which yachts can charter in their waters. That’s why many owners choose Malta or Cyprus as a base. Both offer EU membership and well-established systems for commercial yachts.
Crew rules depend on both your flag and where you sail. If your yacht is commercially registered, it must meet the Maritime Labour Convention (MLC), with proper contracts, rest hours and certification. In the US, foreign crew will also need the right visas before they step ashore. For crew on private yachts, this is often a B1/B2 visa.
If you sail between continents, you need to check employment, payroll and social security arrangements on both sides. Good crew are hard to find and even harder to keep, so getting this right protects your yacht and the people who run it.
Most owners hold their yacht through a company rather than in their own name. This protects you personally, makes a future sale easier and keeps the yacht separate from your day-to-day affairs. Some owners also set up a separate company to employ the crew, keeping employment risks away from the yacht itself.
A Cayman or Malta company, a trust or a foundation can also tie your yacht into your wider succession plans. The right structure depends on where you live, where you sail, and who you'd one day like to hand the helm to.
At Affinity, we're personally invested in every client we work with. From day one, we take time to understand you, how you use your yacht and the bigger picture behind it. Then we design a structure that fits you exactly.
We bring over 20 years of maritime heritage and experience managing over £2 billion in assets under administration. Our teams in Florida, Cayman, Malta and Cyprus live and work in the markets they cover, giving you real local insight on both sides of the Atlantic. From ownership structuring to crew management, we protect your asset wherever you sail.
And we stay close for the long term, because your yacht is part of a legacy that reaches far beyond this season.
Speak with our yachting team today, and set sail with confidence.
Registered in the Isle of Man.
Affinity Group, Second Floor, 14 Athol Street, Douglas, Isle of Man, IM1 1JA.
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