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Eclipse shows Bermuda can make waves in yacht registry business

If there is one thing that Bermuda has over the Cayman Islands, it’s a very large yacht.

In fact, it’s the largest privately owned yacht in the world — the 533-foot

Eclipse owned by Russian billionaire Roman Abramovich — now docked in Hamilton, which flies the Bermuda flag.

And that’s no small feat considering that Cayman holds the majority of private yacht registries.

Private yacht registry is big business for offshore domiciles and growing here in Bermuda.

“More often than not, people who own these mega-yachts have other assets, property and interests that involve off shore, so hopefully when you see a yacht it’s part of a bigger picture, whether that is a holding company, business interests or insurance needs or private client work,” said Timothy Counsell, partner at Appleby Bermuda who specialises in banking & asset finance. Appleby is one of the local law firms that provide shipping registry services. “It could spin off into other things, so it could be a part of a bigger package.”

Because many of these yachts are so incredibly expensive, many yacht owners set up holding companies to offset some of the liability, should the vessel be chartered out or if the boat was say, damaged, sank or spilled oil.

While no doubt that Bermuda and Cayman’s tax neutrality is also attractive, it’s also the cache of a British flagged ship that is appealing.

Being that both ports are British, a Bermuda registry carries with it the benefit of the protection of the British Navy.

“That all ties in with residual value and recognition of a good register are where good yachts are looked after properly — people who have safety in mind and play by the rules — that’s where owners will go,” said Mr Counsell.

“The cost of registering in Bermuda will generally be more expensive than one would see than other shipping registries, like Panama, Liberia and Marshall Islands,” he explained, adding that in Bermuda owners pay a tonnage fee — the bigger the boat, the more expensive it is to register here. “Those registers tend overwhelmingly to be commercial ship registers.”

Where as private yachts tend to go a small handful of places like Bermuda and more likely, the Caymans.

“They (Cayman) really steal the march on private yachts worldwide,” said Mr Counsell.

Part of the reason for Cayman’s stronghold on the industry is its aggressive marketing at yacht shows and trade events where these mega-ships are built and sold. Over the years and as word of mouth takes hold, it is difficult to stop the momentum.

“One skipper talks to another and word gets around,” he said. “Cayman recognised this as a good business opportunity and they’ve actively marketed at events.”

Bermuda, however, seeing the potential of this market, is trying to increase its share of business.

Ed Robinson, Bermuda’s Shipping Registrar within the Department of Maritime Administration said that there is ample room for Bermuda to grow this industry. To further advertise Bermuda’s advantages as a yacht registry, Mr Robinson’s group is planning on attending some of the largest yacht shows this year in Monaco and Florida.

Though Bermuda is the David to Cayman’s Goliath, the Island can still lay claim to be the registry of choice for the world’s largest private yacht.

“There are some significant yachts registered in Bermuda, the

Eclipse being one of them. That’s a feather in our hat,” said Mr Counsell. “That shouldn’t be underestimated and it’s a good thing.”

Bermuda-registered: Pictured is the mega-yacht Eclipse flying the Bermuda flag (Photo by Mark Tatem)

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Published February 07, 2013 at 8:00 am (Updated February 06, 2013 at 7:48 pm)

Eclipse shows Bermuda can make waves in yacht registry business

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