Superyacht finance—key characteristics of superyacht finance
Produced in partnership with Ince and Co
Superyacht finance—key characteristics of superyacht finance

The following Banking & Finance guidance note Produced in partnership with Ince and Co provides comprehensive and up to date legal information covering:

  • Superyacht finance—key characteristics of superyacht finance
  • Finance leases
  • Loan finance
  • Registration
  • Tax and customs
  • Insurance
  • Enforcement of security

This Practice Note provides an overview of the main issues to be considered in relation to superyacht finance. Whilst the law underpinning yacht finance is, in principle, the same as for any ship, there are considerable differences of practice by comparison with mainstream ship finance.

A commonly agreed definition of a ‘superyacht’ is a yacht (motor or sailing) that is greater than 30 metres (98 feet) in length. Lenders will finance the purchase of second-hand yachts, new build projects (pre and/or post-delivery) and yacht refits.

The borrower is very often an offshore, single purpose vehicle (SPV). Specialist yacht lenders are generally private banks or private wealth divisions of large international banks who will require a personal guarantee from the high-net worth individual who is the client and ultimate beneficial owner together with the deposit of assets under management.

This Practice Note addresses the following topics:

  1. finance leases

  2. loan finance

  3. registration

  4. tax and customs

  5. insurance, and

  6. enforcement of security

Finance leases

Yacht finance may be arranged by way of a leasing transaction where the bank or leasing company acquires legal title to the yacht and then leases it to the owner for an agreed term on bareboat charter terms, so that the lessee enjoys possession and use of the yacht, whilst the lessor will be the legal owner and register the yacht in