Yacht Charter explained
Yacht Charter
Yacht Charter explained

What is a CA?

CA is the abbreviation for ‘Central Agent’ or ‘Central Agency’.

The CA is the company that handles all bookings, enquiries, charter contracts and payments related to the charter. It is the intermediate between the owning company, the yacht and the client regarding all charter related issues.

What is a Charter Manager?

The Charter Manager is the representative of the Central Agent, assigned to one or more specific yachts under Charter Management.

Their role is to ensure a smooth process in handling the charter enquiries and contracts, liaise with crew, captain and owners, in order to provide the best service, recommendations, advice and support regarding charter management. The Charter Manager will receive direct enquiries from fellow brokers or direct clients for his assigned vessel and see them through until signature of the contract, payments and follow up after the charter has finished.

What is a Charter Broker?

A Charter Broker handles all incoming enquiries from direct clients. They ensure the thorough research of possible vessels for the enquiries, liaise with Charter Managers and colleagues for availability and the negotiation of charter rates, terms and conditions.

The Charter Broker follows through a direct enquiry from the first correspondence until the final signature of the charter contract, payment and organisation of the charter itself (provisioning list, possible special requests, reservations ashore etc.).

This is relevant for yachts which are not under the companies’ central agency. In case of proposing the companies’ own central agency vessels, the Charter Broker will refer back to the respective Charter Manager.

What are charter rates?

Yacht charter rates are quoted per week for the hire of the yacht. Seven days is generally the minimum yacht charter period accepted by yachts, but charters can be for any duration over seven days. Yacht charters over seven days are calculated pro-rata against the weekly rate divided by seven and multiplied by the number of yacht charter days.

During low season periods, or for special events such as Grand Prix’s, some yachts may consider charters of less than seven days.

High season rates apply to July / August and Christmas / New Year; Mid-season rates apply to June and September; Low season rates apply to May and November.

Please note that charter rates may be subject to change.

What is included within the charter rate?

Most charter rates that appear online are based on MYBA Terms, which imply that the yacht will be provided to the charterer in full commission and with all necessary equipment, properly insured for marine risks and managed by a crew.

Operating expenses are payable by the charterer and comprise (but are not restricted to) the following items: fuel and lubricating oils for the yacht, tenders and motorised water toys, local taxes, pilotage, port, harbour and marina dues, customs clearance, water and electricity, personal laundry, all provisions, wines, beers, spirits, soft drinks and consumables including satellite telecommunication if any for the charterer’s party.

Please note that, occasionally, a yacht may offer a variation on the terms described above.

Is insurance included?

No. We strongly recommend taking out cancelation insurance to cover any unforeseen circumstances. We also recommend that everyone on the charter has a travel and health insurance policy in place that covers all countries you may visit on the charter.

Are crew tips included in the charter fee or advance provisioning allowance?

No. It is customary to tip the crew between ten and fifteen percent of the charter fee as recognition for a high standard of service. To ensure the less seen but essential crew members are equally rewarded, it should be handed to the Captain when you leave the yacht.

Can I charter a yacht for an event in a fixed location?

Yes. Static charter is very popular for corporate events and parties, often putting you right at the heart of a major city.

Do the yachts accept children on board?

Almost all yachts are happy to have children on board, indeed some are particularly well suited to hosting families.

What is the duration of a charter?

Charters generally commence from noon onwards on the first day and terminate at noon on the final day. For example, a charter contracted to commence at noon on 1st June and terminate at noon on 8th June constitutes a one week, 7-day charter.

Is VAT applicable on the charter fee?

Due to European Union tax legislation, Value Added Tax (such as French TVA and Italian IVA etc.) applies on the gross charter fee for charters taking place within European Union, as well as in Turkish, waters. The VAT varies from 5% to 21% and specific rules apply to different locations, depending on the country and its legal terms.

The VAT charges vary from vessel to vessel, and depend on size of the boat, location to start the charter and area of chartering. Your Charter Broker will confirm to you the VAT applicable on every charter, and any alternative options available, at the time of enquiry.

What are the payment terms for a charter?

Generally, a deposit of 50% of the total charter fee is payable by bank transfer on signature of the Charter Agreement. This confirms the booking. The remaining 50%, plus an Advance Provisioning Allowance, together with any taxes, delivery/redelivery fees and any additionally agreed charges, is payable by bank transfer one month before the charter commences.

What is APA and how is it calculated?

The Advance Provisioning Allowance (APA) is due at the time of the final charter payment. Under MYBA terms, this sum is usually equivalent to 25% of the total charter fee but may be 30% in some cases. Intended to cover the operating expenses of a charter such as fuel, food, drinks, port fees etc, these funds will be given to the captain before the start of your charter.

The Captain will ensure that the yacht is fully fuelled and provisioned when you step on board. Whilst an up-to-date summary of accounts can be requested at any time during the charter, a full set of accounts will normally be submitted by the Captain at the end of the cruise. If, during the charter, the expenditure exceeds the sum already paid, additional cash funds will be required at once. All outstanding bills should be settled in cash before final disembarkation. Of course, any remaining credit at the end of your charter will be reimbursed to the client in full.

On request, transfer arrangements to and from the yacht can be made by the Captain, payment for which will be deducted from your APA. Crew gratuities are not mandatory, but usually subject to the charterers’ discretion of between 5 to 10%. This gratitude can be taken out of the remaining APA.

Can I specify the food and wine to be served aboard the yacht?

Every detail counts. Several weeks before the charterer steps on board the yacht, the charter broker will ask them to complete a detailed questionnaire, usually called preference sheet, describing the preferences and special needs of all the members of their party, such as dietary or medial requirements, cabin arrangements, allergies, and their sporting or entertainment requests etc.

This will enable the broker and the crew to ensure that everything possible is done to make the clients’ charter a fabulous experience.

Does my yacht need to be VAT registered?

Yes. In general, the yacht, yacht ownership company or another authorised third party as determined by the vessel’s Flag State, must be VAT registered in the country applicable from where the service is provided.

However, in a few countries it is still possible for the yacht to use the services of a third party that will arrange for your VAT payments and the set-up of a VAT account. Under the operation of a non-EU member Flag State, i.e., the Cayman Islands, Owners are advised to seek more detailed advice from a marine tax professional.

What is MYBA?

MYBA is an acronym for the ‘Mediterranean Yacht Broker Association’.

It is a trade association founded in 1984 by a group of prominent yacht brokers with the aim of promoting standards of professionalism and ethics in the yachting industry throughout the Mediterranean, and worldwide.

MYBA only endorses membership to brokerages with a proven track record of professional excellence in the yachting industry, thereby offering valuable benefits and safeguards to clients choosing to purchase, sell, build or charter a yacht through a MYBA brokers.

Who signs the charter contract?

There are 4 parties that agree to, and sign, the MYBA charter contract.

  1. The yacht Owner
  2. The Charterer
  3. The Charter Broker
  4. The Stakeholder.

What is a stakeholder?

A stakeholder is the entity that holds the funds until the charter commences. The stakeholder has an escrow or dedicated client account established by the central agent for holding the funds on behalf of the client until the consummation or termination of a transaction.

What is LOA?

LOA means ‘Length Over All’.

This indicates the full length of a vessel from bow to stern and is usually quoted in meters or feet. It is very important, as the costs of most of the berths are calculated by meters.

Please note that in case there is no available berth in the size of your yacht, the next available berth will be assigned and charged according to its size, even if bigger.

Claire Sinclair, Client Manager at West Nautical adds “Many of us at West Nautical are not only experts in our field but have worked on yachts ourselves. We therefore have knowledge on what a yacht charter on board is really like. From the charter contract down to your food and wine selection, we are here to manage your charter every step of the way.”

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