International Yacht Chartering, given its international clientele, is a business that lends itself well to “Offshore” Corporate Structuring. Here’s how it will typically work:
- The yachts will be owned by (or the leases held in the name of) the/a tax free Offshore Company
- Your international clients will enter into an agreement with the said Offshore Company (which is commonly an “IBC” ie International Business Company)
- The situs of the agreement (ie the place at which the contract was formed and or services provided) will be deemed in the agreement to be Offshore
- The nil tax IBC will have a bank account Offshore ideally in a nil tax International Offshore Financial Centre
- You will want to set up a merchant account facility for your Company so clients can pay you by card (and also ideally by paypal) as well as by bank wire if/as they may prefer
- Funds are ultimately directed to the Offshore Company’s tax free bank account and receipted free of tax in the first instance
- Your or your local company will be engaged by the Offshore Company to perform certain functions (eg client liaison, yacht sourcing, fleet maintenance, logistics management etc etc etc)
- The operating expenses can/will be paid from the Offshore account
- To cover your local living costs you could draw down regular instalments as wages (or consulting fees) and/or you could access funds using the Offshore Company’s VISA/Mastercard and/or the Offshore Company could loan you money
- If you want to make substantial purchases onshore eg to buy a car or a piece of realty or shares/investments your tax free IBC could buy these or (eg if you want to make these purchases as discreetly and as privately as possible) your existing IBC could form a subsidiary IBC to buy these
- The remainder of your Yacht Charter Business profits could be held and/or invested offshore potentially tax free.
Local laws can have an impact. Hence you should seek local legal/tax advice before committing to set up an Offshore Corporate structure such as that described above.
