Disclaimer - Selecting a flag state under which to register your vessel is a decision that should be made with full consideration of your complete financial situation. This article does not constitute legal advice and we always recommend that our clients consult with a maritime attorney and tax accountant familiar with their specific situation before making a decision regarding the selection of a flag state authority.

When you purchase a yacht one of the first actions of your purchase team is to register the vessel with a suitable maritime authority for your situation.

Choosing the right flag state is essential as this defines the primary set of rules under which the vessel will be operated.

Legal jurisdiction is determined primarily by Flag state, then Port state (the laws of the country in which the vessel is traveling) and finally, to a lesser extent, the nationalities of your crew, guests or charterers.

The selection of the flag state is very important as it may have significant legal and financial implications for the yacht owner.

For example certain flag states do not maintain commercial registries so would not be suitable should you wish to charter in an area which requires commercial documentation of your vessel.

Some of the most popular flag states are - 

	Comments
United Kingdom	The UK flag is the most instrumental in the development of new rules and regulations for the yachting industry. Since their development of the first Code of Practice for large commercial yachts this has been the flag state that others follow. Due to their "parent" status to other British registries, such as Isle of Man, Bermuda, Cayman Islands and British Virgin Islands, most yachting tonnage follows some sort of UK regulation.
Marshall Islands	With a proven track record and very large commercial fleet the Marshall Islands registry has entered the yachting market and developed significant market share in the past few years. Where this registry excels is their practical approach to applying the commercial codes and for many American beneficial owners this is becoming the flag of choice. An example of their accommodating approach is their interpretation that a vessel is not operating commercially unless it is generating a profit. Therefore for a vessel which charters occasionally and does not wish to maintain the commercial certificates this registry offers a cost effective solution should you just wish to undertake a few Caribbean charters.
United States	The US flag is one of the most restrictive flags for yacht registry and despite the large number of US beneficial owners, due to it's restrictive nature the US flag is not a popular one in yachting. Some examples of the limitations for US registry are - Must be a US citizen, restrictions upon nationality of captain and crew, Vessel must be US built or US federal tax paid, commercial rules are very prohibitive for chartering in US waters (with more than 6 passengers).
Cayman Islands	The Cayman Islands flag is probably flying on more yachts than any other single flag. With a large registry and government support this flag has a very pro-active and complete approach to assisting yacht owners comply with Cayman and international regulations. The registry is classed as a Category I UK registry and it is held in high regard around the world. The Cayman Islands shipping registry maintains offices staffed with surveyors on both sides of the Atlantic.
Bahamas	The Bahamian registry took an interesting approach to yachting in recent years and currently requires all yachts in their fleet to carry all of the certification necessary for commercial activity but does not allow commercial activity. If you are looking to maintain your private yacht with first class certification then the Bahamian flag may work for you.
St. Vincent	The St. Vincent registry has been very popular within the yachting industry but with the development of the commercial codes of practice was seen as a little slow to respond and as a result has lost market share to some of the other registries. The St. Vincent authorities do now have a commercial code of practice and a complete network for inspection and survey for compliance in many major yachting centers.

For more information please click on the links to go to expanded information for these flag states or call Luxury Yacht Group and speak with one of our technical representatives. Or E-mail us.