Private Yacht YET Regime - Overview For Cayman Islands Flagged Vessels

Key takeaways

• YET allows Cayman yachts to charter up to 84 days a year while remaining primarily private and compliant with the Yacht Code.

• Owners gain flexibility and income opportunities without full commercial conversion or repeated registration changes.

• Strong compliance, documentation and VAT awareness are essential when operating under the YET framework.

Overview

The Cayman Islands Shipping Registry has updated its guidance on the Yacht Engaged in Trade (YET) regime. This programme enables qualifying yachts to combine private use with limited charter activity in EU waters, without the need to change registration status for each use. It replaces earlier arrangements and reflects current EU VAT and regulatory requirements.

YET programme overview

The YET regime enables a privately registered yacht to:

1. undertake commercial charter activity for up to 84 days per year;
2. continue to operate primarily as a pleasure yacht; and
3. remain compliant with Red Ensign Group (REG) Yacht Code.

During charter periods, the yacht is temporarily reclassified through:

1. a YET Certificate of Compliance (YET CoC); and
2. a Temporary Certificate of British Registry (CoBR YET).

Eligibility and owner requirements

To qualify for YET status, a yacht must:

1. be 24 metres or more in length;
2. be Cayman Islands registered;
3. hold a valid REG Yacht Code Certificate of Compliance;
4. comply with all applicable international and local regulations;
5. successfully pass annual surveys.

Key restrictions

Charter limits: Charter activity is capped at a maximum 84 charter days per calendar year.

Private use restrictions: The owner cannot use the yacht privately during any period when a CoBR YET is in force.

Jurisdictional limitations: The regime is only available in jurisdictions that recognise the YET framework. Owners should confirm applicability with a customs broker or fiscal adviser prior to chartering.

VAT restrictions: Yachts operating under the YET regime cannot benefit from VAT exemptions on fuel or operating consumables.

Compliance and inspections

While operating under YET, the yacht is treated as a commercial vessel and is subject to Port State Control inspections under the Paris MoU regime. Continuous compliance with the REG Yacht Code and completion of annual surveys remain mandatory.

Ongoing compliance requirements

Notwithstanding its private use, the yacht must at all times:

1. comply with the REG Yacht Code;
2. meet applicable commercial yacht safety and operational standards; 
3. maintain a clean compliance record through annual surveys;
4. not be used as a pleasure yacht by the owner during validity of the CoBR YET, which must be carried on board and held in the certificate folder for the duration of the charter; and
5. retain on board the original Master's Limited Trade Declaration for a YET.

Pre-charter documentation requirements 

Before each charter, yachts must:

1. remove the 'Pleasure Yacht' Certificate of British Registry (CoBR) and retain it safely on board; and
2. include the following documents in the certificate folder:
   1. YET CoC;
   2. CoBR YET;
   3. charter agreement;
   4. customs documentation for the placement of the Yacht under

Temporary Admission for Commercial Activity (TACA);

v. Master’s Limited Trade Declaration; and

vi. customs documentation for the removal of the Yacht under TACA (for end of charter).

Post-charter documentation requirements

After each charter:

1. YET-related documents must be removed and safely retained on board; and 
2. the 'Pleasure Yacht' CoBR must be reinstated in the certificate folder.

Key benefits for owners

The YET regime offers significant operational and financial flexibility:

1. ability to generate charter income without full commercial conversion; 
2. no requirement to repeatedly switch between pleasure and commercial registration; 
3. reduced VAT and customs disruption, including no need to leave the EU when changing use; 
4. continued private use without VAT exposure (outside charter periods); 
5. reduced regulatory risk associated with extended private use; 
6. potential access to VAT relief on certain works, depending on circumstances; and
7. the Temporary Admission 18 month period is paused each time the yacht is used under YET and placed into the TACA for a YET regime.

Next steps for yacht owners of Cayman Islands flagged vessels

Please speak to your usual Cayman Islands law counsel at Walkers for more detailed advice on the content of this advisory and how it may impact your charters.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.