Managing the US-Driven Boom in European Shipyards
American owners are driving a boom period for European-built superyachts, with a growing number of new, younger American owners turning to the continent to build their dream. While the trend is exciting for the industry in Europe, constantly changing rules and regulations mean that owners have to be shrewd in their legal preparations.
Global professional services provider Equiom is helping owners and shipyards mitigate the regulatory implications of this shift. Chris Stokes, who has recently joined the firm as Yachting Director, holds over 18 years of experience in the industry, from from modest beginnings as a crew member to operating a multi award winning brokerage business in the Middle East. Chris talks to superyachts.com about this trend and the challenges it brings.
America’s European Pivot
Following the sales of Spectre, Elaldrea+ and Metis to American owners, Benetti CEO Franco Fusignani declared in June that this was “evidence of the American market’s growing interest in the Benetti brand.” This is something that Stokes sees as being prevalent across Europe.
“With American owners now,” says Stokes, “you aren’t seeing a dramatic rise in sales of US built superyachts even though American buyers are the most prominent globally right now. If you look at the Dutch shipyards for instance, in 2018 close to 80% of their orders received were from American clients. Clearly a strong indication of where these owners are going to buy their yachts.”
“European brands are obviously well established, and have a proven quality of design and build. European yacht designers are also leading the way in terms of innovation and custom design, which is drawing in American owners. There is also a greater sense of brand recognition, advancement of build techniques and experienced labour which has consequences for when you want to sell a yacht after you finish with it.”
A Changing Demographic
At the core of this development is the changing profile of owners. A younger demographic of US owners are demanding superyachts that fit their global nature, drawing them to innovative European shipyards.
“How they use the superyacht and the demographic is changing,” Chris explains. “The style of the yacht, what they’re specifically looking to use the yacht for has also changed. We are getting younger and more adventurous owners from America. Typically, US buyers have bought American made products, particularly in the smaller boat and yacht arena, but when it comes to superyachts they are drawn in by the European manufacturers who have a much more diverse global appeal.”
“American superyachts designs are typically quite traditional and indeed still hold high value with a section of the market. However, they lack the variety of usage when you think of explorer type vessels, the new way in which you entertain guests and the facilities on board. These are all things that Europe has taken to a new level.”
Where owners choose to use their yachts, whether for personal or charter, will always have legal and financial implications. “Depending on which territorial waters you are using it in, residency of owner and crew, where it’s berthed and where you are flagging it, these are all factors that contribute,” says Stokes. “Itineraries for both personal and charter use have also changed, which has consequences for taxation and VAT, especially when in charter. If the law changes and you are not aware, then there could be financial penalties involved. Even in the EU, how people interpret and implement these laws can vary and owners need to be astute to this.”
Making for Smooth Sailing
With 18 offices worldwide and a strong division of yachting experts, Equiom is on hand to help mitigate the risks of this trend.
“Equiom is well balanced in that we offer a broad range of services. Some companies may do flag registration, others crew payroll and some offer VAT and accounting. Very few offer it all and have offices throughout the world who are up to date on the constantly changing rules and regulations. So whether for charter of personal use, all the bureaucracy and red tape of tax and documentation implications, we can take that daunting stress away.”
“What Equiom do best is understand exactly the requirements and itinerary of a vessel, which allows us to find the best solution to that particular client. It is hard to keep up to date with all the jurisdictions and changes in tax while applying a personal service globally. With our breadth of expertise, size and coverage, we are able to handle that challenge and is a core difference that we can offer to clients.”
Building for the Future
Chris Stokes’ insight into the industry is valuable to the growth of Equiom’s yachting division, which is set to develop further both in terms of expertise and global reach in the coming years.
“I’m looking to develop our specific yachting hubs in places likes Monaco, Hong Kong and America. The aim is to grow the specific expertise here and worldwide, building on what we already have. We have our 18 offices worldwide, and are going to develop that. By having people in these areas who are on the ball 24/7 and able to meet clients in person, we are able to give a personal touch.You can have expertise but client-facing interaction is vital.”
"European yacht designers are leading the way in terms of innovation and custom design, which is drawing in American owners"