With a long and successful history in providing finance for the superyacht industry Ken Griggs joined old friend Chris Allix to run Dominion Marine SARL in 2014. Dominion Marine SARL and it’s Director Ken Griggs have developed a product that in essence gives owners a free circulation yacht. Although, to be financially beneficial the value of the yacht does need to be north of €10m.
Nearly half of all second-hand yachts sales are purchased by buyers in the USA, and Ken Griggs explains how the Monaco solution can provide a yacht to owners looking for free circulation, so it’s no surprise that they have no desire to have a VAT paid boat. Non-EU residents, such as owners from the Middle East, or Eastern Europe tend to use TAR, and with the bulk of yachts either side of the 50m mark commonly used for commercial purposes, VAT has a massive impact on the decision of whether or not to buy a superyacht.
Dominion Marine SARL have developed what is now recognised as the preferred VAT deferment solution for superyacht owners. Set in Monaco, the scheme is based on the widely known car rental solutions that we’ve all used numerous times. Leasing. The vital element being that when you hire or lease a car, you pay VAT on the rental element, but you then have the ability to visit any country you fancy. The car is in free circulation, and this is precisely what the Monaco solution delivers to yacht owners.
In a simpler fashion, the scheme is already used by bare boat rental companies popular in Greece and the eastern Mediterranean. The rental company does not pay VAT on the yachts they buy as a commercial asset, but you as the renter will pay VAT on your rental fee. In his own words Ken likens the yacht solution to that used by the likes of Hertz Rental. But they do differ slightly, Ken explains “While Hertz buys cars through a mixture of its own cash, loans, leasing and finance, Dominion buys the superyachts with a loan provided by the ultimate beneficial owner (UBO). There are three companies involved in the solution, the lending company and a rental company (both owned by the UBO) and a company in Monaco owned by Dominion Marine SARL.
The yacht in question gets its own company in Monaco with its own VAT number in order to provide the individual lending the money, total security on the asset. There is obviously a fairly large cost for Monaco, but these pale into insignificance when compared to the savings that are realised by the owner through this scheme, but as mentioned before the most beneficial starting point is for yachts with a value in excess of €10M.
The simple steps are as follows:
- Dominion Marine SARL provide the lender with a mortgage, as well as an executed notarised draft bill of sale, which can then be filed with the vessels flag state to take back ownership at any time. The lender now has a mortgage, bill of sale and he is in possession of the yacht, this provides a more than adequate level of security….BUT
- Dominion also provides the lender with a charge of the shares of the owning company. In Monaco, it requires government approval to sell shares in a company so the UBO can be assured that the yacht cannot be sold or mortgaged without his consent
- There are, therefore, three levels of security
- The UBO then rents the superyacht from the owning company based on the best estimate of the future depreciation of the asset
