In most cases, you need to be a fiscal resident in the EU to benefit from a European bank (or leasing company) financing your boat, whether she’s new or pre-owned. You may also be required to own commercial activity, assets (property) and a bank account within the EU so that the financial institution is comfortable with your credit guarantees.
Generally, European financial institutions with a nautical program will propose a leasing solution, where you actually rent the yacht for up to 10-12 years with a purchase option at the end. This popular way of financing a yacht will require a 25 to 50% down-payment and the balance will be paid with monthly instalments. You will also benefit from VAT advantages, generally cut in half.
If you do not match these requirements, YACHTS INVEST may be able to provide alternative yacht finance solutions through different boat financing partners but you should also search from alternative banking solutions in your country of origin or just have your broker negotiate a great cash deal for you.
Boat leasing is a great way to finance a boat and indeed the most popular form of boat financing. With this solution of marine finance, you can make significant VAT savings, on both new and used boats. The schemes offered on the market are recognized marine finance schemes for boats and yachts of all sizes, established by the French, Italian and other European governments.
The Italian and French leasing finance schemes have been established for many years in Europe, and provide a legitimate and safe way to obtain credit and reduce the VAT on your boat purchase. Some other benefits can be found by several clients by not showing wealth and ownership, only the leasing of a boat.
Boat Finance – Yacht Leasing
If you are using your boat in EU waters, including the UK, then this simple form of yacht leasing finance can save you VAT. The process is very simple:
You choose your yacht, boat, or superyacht and negotiate a final price with the seller, boat dealer or manufacturer. This includes all the extras that you would like as part of the overall specification. The deposit is then paid. The leasing company (or bank) then arranges to buy the boat and the balance is financed by them, with the vessel then being leased to you for the agreed period at a contracted rate per month (or quarter). Reduced rates of VAT are paid on these instalments according to the type of boat, its size, navigation area and the type of scheme (Italian or French). At the end of the leasing contract you have the option to buy the vessel, or simply return her to the bank. The residual values vary from lender to lender and currently range between 1% and 5%.
Boat Loans – Chartering
If the ownership of your boat is through a commercial or chartering company, then yacht financing using a lease makes even more sense, as most lenders will offer VAT free leasing which can save considerably on costs. However, it must be emphasized that this is for legitimate chartering companies only, which are exclusively those actually running a rental business and with full-time crews.
For private owners, part-time chartering is permitted within the terms of the lease.
Italian and French Leasing Programs
The two main marine finance leasing programs available on the market are the most popular, namely the French and the Italian. We can also propose the Maltese and Madeira lease options, but we have to study the feasibility of your application before we submit it. The Italian and French programs offer slightly different benefits, depending on the size and class of vessel, with the first being based on type and size of the vessel, whilst the second is based on Class. In principle the larger the boat, then the greater the savings in VAT, and for yachts over 24 meters, it is possible to reduce the VAT to 6%.
Please note that the minimum deposit for leasing in excess of 5 years is 30%.
There is no upper limit on the size of boats benefiting from finance using a lease, so boat finance for even mega and superyachts is possible given the right qualifications.
Yacht Leasing (French or Italian) – Key Points
- The minimum value of boat (Ex-VAT): € 250,000
- No maximum value
- Minimum deposit 25%
- Maximum deposit 50%
- Contract terms from 3 to 8 years, sometimes up to 10/12 years
- Residual values from 1% to 5%
- The contract can be made through either private or company ownership
- Available for both new and used boat finance, please verify the age of boats qualifying
- Registration in most EU countries and flags, including UK flag
- Chartering is permitted under the terms of the lease
- VAT-free leasing available for chartering companies
- Avoids showing wealth or ownership
- Non-disclosure and confidentiality towards each client
- Leasing contracts are frequently possible to recover by future buyers, and even re-negotiable
At YACHTS INVEST, we will direct you to the appropriate bank or leasing company partner capable of financing your yacht and we will help you not only to negotiate the best possible marine finance conditions but also to adequately fill-in and submit your application.