Mr Smith was now back in Hong Kong but wanted to keep momentum going on both his business jet and yacht projects, so we arranged a video conference call for him with Brian T Richards of RegisterAnAircraft (RANA) and Gabriel González of RegisterAYacht (RAY). Now that he had our written analysis and proposals, the purpose of the call was to agree a practical way forward.
The aircraft was discussed first. Mr Smith has decided to proceed with a Brazilian-built Embraer Phenom 300, a popular light business jet that is in service globally. The price for a new build aircraft (which is his clear preference) is in the region of $9 million at current prices. Brian provided details of a recommended broker together with some financing options. Comprehensive, cost-effective insurance cover for the airframe, engines and public liability is to be arranged through Sovereign Insurance Services.
It was agreed that RANA would liaise with VAT and customs specialists, particularly in relation to delivery from the manufacturer and possible use of the EU’s temporary importation regulations. A number of suitable aircraft management companies based in the Middle East had been identified. These would provide management service for the aircraft including crew/maintenance and hangarage.
The discussion then turned to the yacht. As most of the yachts he had been considering would be on display at the Monaco Yacht Show, it was agreed that Mr Smith should attend the show together with wife and his chosen captain (whom he had known for several years). The captain’s role would be to manage the project, co-ordinate the operational and technical issues and, post delivery, command the yacht and its crew.
In addition to closing an acquisition in Monaco, Mr Smith would be introduced to reputable yacht management companies and crew recruitment firms. Any interior design customisation could also be discussed. The necessary work would likely take several months so that the vessel is unlikely to be ready before March 2016. This will give the captain and crew sufficient time to familiarise themselves with the yacht.
As with the aircraft, Sovereign Insurance Services will be used to arrange the full range of necessary insurance brokerage, including health and accident cover for the crew. From the outset, fiscal and legal issues are to be reviewed independently and arrangements for the yacht’s commercial coding will be put in place.
As soon as the captain and management have recruited a suitable crew, RAY will ensure that the employment contracts are fully compliant and that a payroll and banking system is established such that the vessel can operate all round the world. Mr Smith is keen to develop a long-term relationship with his crew, which is to include the provision of a pension scheme that Sovereign is also to manage.
The conversation turned to the ownership structure and registration issues. An Isle of Man company is to be established for the aircraft. The yacht will be owned by a Gibraltar company. The shareholdings of both entities will in turn be held by one of Mr Smith’s existing companies. Separating the ownership of each asset in this way provides for better liability protection and will also provide Mr Smith with the confidentiality that he requires.
The registration of the aircraft in the Isle of Man will be managed in full by RANA and the personalised registration “M-SMTH” will be requested. RANA has an excellent working relationship with the popular Manx registry. The yacht, meanwhile, is to be registered in Gibraltar where RAY enjoys a very close business association with the Maritime Administration.
The meeting concluded with a review of both strands of the project and the commitments made by RAY and RANA respectively. A plan of action, including a schedule, was agreed because the various tasks need to be completed in a logical, well-structured order. Monthly meetings are planned, although it was stressed to Mr Smith that he should feel free to contact Gabriel and Brian, or their teams, whenever he feels necessary. After all, he is likely to have a lot of questions in the months ahead. Mr Smith reiterated his confidence in the strategy and, after many years of thinking about it, is looking forward to finally getting “aloft and afloat”.