top of page

Corporate

Ownership

8 August 2014

Last revised

minutes

5

Reading time

Traditionally, large yachts are owned through companies and trusts, typically based in small offshore locations. However, their use can still leave owners liable for non-compliance with the law. This article examines the reasons behind the tradition, and considers how effective companies and trusts can be at insulating the owner from the liabilities of ownership.

minutes

5

Reading time

8 August 2014

Last revised

Traditionally, large yachts are owned through companies and trusts, typically based in small offshore locations. However, their use can still leave owners liable for non-compliance with the law. This article examines the reasons behind the tradition, and considers how effective companies and trusts can be at insulating the owner from the liabilities of ownership.

  • Companies have their own legal personality and can buy and sell goods and services like individuals.

  • Trusts are arrangements where property is handed over for the benefit of another, with legal rights enforceable by the courts.

  • Companies and trusts can help reduce personal tax exposure and protect assets, such as yachts.

  • Owning a yacht through a company can ring-fence liability and protect other assets.

  • Companies and trusts can isolate ownership in politically unstable countries or protect against creditors.

  • Establishing transactions through a company provides personal liability protection for directors and shareholders.

  • Yachts can be arrested following accidents, pollution allegations, or unpaid services, requiring payment or security to release them.

  • 'Lifting the corporate veil' allows individuals involved in fraudulent transactions to be held liable.

  • Companies cannot be used to evade legal obligations, and privacy may not be entirely guaranteed.

  • Offshore jurisdictions are commonly used for private, tax-efficient business operations, and careful consideration is needed when choosing one.

  • Yachts can be arrested following accidents, pollution allegations, or unpaid services, requiring payment or security to release them.

  • 'Lifting the corporate veil' allows individuals involved in fraudulent transactions to be held liable.

  • Companies cannot be used to evade legal obligations, and privacy may not be entirely guaranteed.

  • Offshore jurisdictions are commonly used for private, tax-efficient business operations, and careful consideration is needed when choosing one.