In the same way that there is stiff competition between registries for the registration of ships, so too is there stiff competition for the registration of yachts. One might think that the larger registries such as Panama and Liberia would have a monopoly on the registration of yachts as well as ships, but this is not the case. In the case of yachts, there are other registries that are able to offer specific benefits that other registries are not able to offer.
As there are for ships, there are rules and regulations in place for yachts, but they tend not to be so rigorous or adopted by all flag administrations. However, due to the nature of the business, commercial yachts are subjected to stricter rules than those applying to private yachts. Commercial yachts are in effect small and exclusive passenger vessels. In most cases they must be classed, and additionally they must also comply with the Commercial Yacht Code Regulations as adopted by the flag state, and various International Conventions and Regulations such as MARPOL, SOLAS, Load Line, STCW, ISM, ISPS, MLC 2006, and safe manning requirements.
Therefore, when registering a commercial yacht, the fees, taxes, rules applied, and where the yacht operates are some of the key factors to consider, in addition to the reputation and stability of the registry in question.
The Red Ensign Group (REG) has become a favoured group of British Shipping Registries under which to register a commercial yacht. The group comprises of the UK, Crown Dependencies, and UK Overseas Territories which maintain and operate ship registries from their jurisdiction. Such registries include Bermuda, Cayman Islands, Gibraltar and the Isle of Man to name a few.
Yet not all of the Red Ensign jurisdictions operate in the same way. The registries are split into two categories. Category 1 registries are permitted to register vessels of all types and size. A registry which is a category 2 registry may only register yachts and commercial ships vessels up to 150 GRT, and non-commercial ships and yachts up to 400 GRT. Some charge higher fees, have more strict manning regulations and will only register a vessel under a certain age. However, the one major benefit they all hold is that they each have access to world-wide British Consular support and services, and Royal Naval assistance should they need it.
The Cayman Islands has become one of the most popular of the Red Ensign registries for owners of yachts. It is steeped in history having been established in 1903, and has a reputation for running an efficient and well managed registry. As a category 1 member of the Red Ensign Group, any size and type of private or merchant vessel can be registered in the Cayman Islands. Having such a status and reputation makes it less likely for those yachts and ships registered under its flag to face unwarranted scrutiny by Port State Control.
As a major financial centre, obtaining and registering a mortgage in the Cayman Islands is also a far simpler process than most other parts of the world. This encourages many companies and owners to have their new yachts to be built under the Cayman flag. Equally attractive is the fact that the Cayman Islands Registry permits yachts to change their status from being registered as a commercial yacht to a pleasure yacht and vice versa.
With such a wide range of rules and benefits applied by the various registries, to compete for yacht registrations you need to provide that little bit extra than is offered by your competitors.