Walkers has a very experienced global shipping team across our offices in Bermuda, the British Virgin Islands, the Cayman Islands, Dubai, Guernsey, Hong Kong, Ireland, Jersey, Singapore and the United Kingdom and we are able to assist with all legal aspects of the vessel and mortgage registration process. This article summarises the advantages and processes regarding registration of and mortgages over yachts in Jersey. If you're interested in how Walkers can assist, please get in touch.
Yacht registration in Jersey is popular for both Jersey residents and non-residents alike, as registration is open to a wide range of individuals and entities within a politically stable and tax efficient offshore jurisdiction. Registration in Jersey provides worldwide proof of ownership and enables owners to mortgage their yachts to secure any financing. Jersey has been white-listed as a transparent and well-regulated offshore finance centre by the Organisation for Economic Co-operation and Development and operates a registry which is part of the prestigious Red Ensign Group. Financiers of yachts can therefore have confidence in the effectiveness of their mortgages over such vessels.
Advantages of registering in Jersey
There are many benefits to registering a yacht in Jersey:
- the Jersey Ships' Registry (the
"Registry") is falls under the umbrella
of the Registry of British Ships. Jersey registered yachts are
therefore entitled to:
a) British consular assistance;
b) Royal Naval protection and diplomatic protection;
c) access to the capabilities of the United Kingdom Maritime and Coastguard Agency; - registration in Jersey lasts for ten years (the United Kingdom is five yearly) with no annual fee;
- Jersey has commercially driven legislation and efficient taxation, thereby providing a wide range of flexibility of ownership structures with low to no tax. Owners can access a wide range of high quality financial services available in Jersey in supporting their decisions regarding their asset management and wealth planning. Jersey offers an extensive network of professionals experienced in yacht ownership, management, technical assistance and crew recruitment.
Alongside a friendly and forthright Registry, owners and financiers will find ship and mortgage registration in Jersey simple and cost-effective, given that it forms part of the British system.
Registration of yachts
The Registry is authorised to register both pleasure and commercial vessels up to 399GT, with an overall length in excess of 24 metres. Vessels less than 24 metres in overall length may be registered under the small ships register, subject to certain Jersey residence and ownership limitations.
Full registration of a vessel in Jersey is available to individuals and body corporates resident or established in:
- Jersey;
- the United Kingdom;
- British Overseas Territories;
- British Commonwealth of Nations;
- European Economic Area countries; and
- certain other countries*.
*Entitled countries listed at the end of this article.
Individuals who are British Citizens living overseas may also register a vessel in Jersey. Where an individual is not a British Citizen or resident in any of the above countries, they may set up a company or appropriate structure in an entitled country to hold ownership of the yacht.
If an owner does not have a Jersey address for the purpose of the registration they may appoint a representative person in Jersey, upon whom official documents in relation to the vessel can be served by the Registry. There are a number of providers in Jersey who can assist with such representative services.
An application for the registration of a vessel in Jersey must include a proposed name for the vessel, which must be unique to the Registry and comply with certain regulations regarding naming conventions. The Registrar must give the applicant written notice if a proposed name is approved or not approved, stating (if it is not approved), the grounds for the Registrar not approving it. A vessel name can be reserved for a period of 12 months which may be extended or further extended by the Registrar on written request of the applicant. There is no fee for a vessel name reservation in Jersey.
The full list of documents, information and fees required by the Registry to register a yacht can be found at https://www.ports.je/shipsregistry/fullregistration/. Provided that all documents are submitted promptly and meet the Registry's requirements, the registration can be processed fairly quickly.
Mortgage registrations over yachts
If a yacht registered in Jersey is being purchased or refinanced, the lender will require a mortgage over the yacht to be registered with the Registry. Mortgages over Jersey registered vessels may be granted for a principal sum and interest or to secure a 'current account' (ie. the amount due at the time of enforcement), allowing flexibility with respect to the amounts secured by the mortgage.
In order to register a mortgage, the Registry will require:
- the original signed mortgage to be delivered to the Registry, which must be in the form issued by the United Kingdom's Maritime & Coastguard Agency; and
- the payment of the fee to register the mortgage. The latest fees will be set out on the Registry's website. The Registry may have additional requirements if the mortgage has been signed by a power of attorney.
It is also common practice for the lender and the borrower to sign a supporting deed of covenant in addition to the mortgage document, which contains representations and undertakings in relation to the vessel such as insurance, compliance with laws and maintenance of registrations. Additional security (such as over the yacht insurance policy) or guarantees from an owner may also be required by a lender, which will sit alongside the yacht mortgage.
All mortgages are recorded by the Registry in the order in which they are presented to the Registry (as opposed to the date of execution of the mortgage) and will rank in priority according to the registration date of the mortgage.
It is possible for a secured party to register a notice of mortgage intent against a yacht whilst the mortgage documentation process is ongoing. The notice is valid for one month from registration and it may be renewed for one month at a time thereafter, by paying the prescribed fee. A notice of intent can also be accepted prior to the actual registration of the vessel with the Registry.
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.
