Maritime Law
Yacht Registration, Serbia and the Region – Everything You Need to Know – Choice of Flag State
Recently, there has been an increase in the number of owners of luxury yachts, both individuals and legal entities, registering yachts in Serbia, Montenegro, and other countries in the region.
These yachts are primarily of private nature, often up to 24 meters in length, without economic purposes such as chartering or similar activities. Additionally, there are a smaller number of registered yachts for commercial use.
Considering the noticeable increase in yacht registrations, this text will focus on the basic steps involved in yacht registration and maintenance from a legal perspective.
The first step in yacht registration is the selection of the flag state.
The flag of state denotes the vessel’s affiliation with a particular jurisdiction.
Currently, there is a large number of classified flag registrations in the maritime world. The choice of flag under which the yacht will sail during navigation is the most important aspect for the owners of these vessels.
All matters relating to navigation safety, permitted navigation areas, compliance with maritime laws, jurisdiction, tax issues, maintenance costs, etc., depend solely on the flag of registration.
When selecting a flag state for yachts, it is important to note that world maritime organizations have classified these flags into three ranks based on the number of detentions by maritime authorities and other maritime organizations relative to the number of inspection visits in the previous three years.
Detention by maritime authorities implies that during the inspection of certain yachts, several deficiencies affecting the safe navigation of the yacht were noted. Thus, there are three ranking lists of flag states: the white list, the grey list, and the black list.
Yacht Registration – White List
Contains flags of countries that have shown no or minimal reasons for concern regarding navigation safety.
This group includes countries such as Italy, France, the United Kingdom, etc.
Flag registrations from this list are certainly the safest in terms of navigation, however, they are characterized by extremely high registration and maintenance costs, as well as costs related to tax issues.
Additionally, the registration process itself is more complex, requiring the submission of a much larger number of documents than usual.
Grey List
Contains flags of countries with average performance regarding navigation safety.
This group includes countries such as Saint Vincent and the Grenadines, Switzerland, etc.
Although the title suggests that these are countries with average performance, that is not actually the case. The mentioned flag registration countries are quite safe in terms of navigation safety, almost at the level of countries from the white list.
The advantages of countries on the grey list are certainly lower yacht registration costs, a simpler registration process, lower costs regarding tax obligations, simpler correspondence with the flag administration, etc.
Therefore, the majority of owners opt for yacht registration within the jurisdictions mentioned above.
or example, yacht registration under the Saint Vincent and the Grenadines flag, which is on the grey list, is certainly more cheaper than registration under the flag of some countries from the white list such as France, etc., and both flags states provide safety navigation.
Black List
Contains flags of countries that have shown a high number of deficiencies.
This group includes countries such as Cameroon, Togo, etc.
The reason for such qualification of the mentioned flags is the ratio of inspections and detentions by maritime authorities.
For example, with the flag of Cameroon, out of 93 inspections conducted in two years, there were as many as 22 detentions by maritime authorities, which is an exceptionally high number.
Flag registrations from this list are characterized by low yacht registration costs, a small number of documents required for registration, but also a high risk of vessel detention by maritime authorities and navigation restrictions in certain areas of the world.
Based on these parameters, yacht owners should choose a flag that meets their needs and desires for yacht registration.
This text does not constitute legal advice but rather the opinion of the author. For legal advice on the topic of Yacht Registration in Serbia, Montenegro, and other countries in the region, as well as other topics, please consult a lawyer.
