YACHTING INDUSTRY – Good for business on the Rock

Gibraltar Magazine – September 2017
Ian Le Breton

Spare a thought for Gibraltarians living in the UK as you welcome in September. There, the days are already noticeably shortening with each passing week, and was that, just maybe, a hint of rain in the wind? Oh dear. Back to the gloating season. Looking out from my terrace over Marina Bay, sitting in bright, warm sunshine, what of the view? Yachts. Hundreds of yachts. All shapes and sizes, bobbing (if that is a nautical phrase) on the crystal waters. And so on.

OK, enough of the Tourism Department-inspired spiel – although it is all perfectly true. To business and, specifically this month, to the yachting business and how Gibraltar benefits from this growing industry.

Regular readers may recall from previous columns that I prefer things that fly rather than float. I’ve done my fair share of piloting small aircraft and captaining boats back in the day, but the sky wins over the water for me any time. After all, you can spend all day pootling around in a yacht – and get precisely nowhere, particularly if the tide is against you. Pootle about carelessly in an aircraft and the consequences are highly likely to ruin your day! Maybe that is precisely why people love yachts. I do too, but for a far more practical reason – the business they bring to our Rock. Read on.

From a business viewpoint I estimate the value of the private marine industry to our local economy in two completely separate ways (although they are closely linked). First, there is the visible. We live in a tiny space but boast no less than three marinas. That’s an awful lot of boats. And I’m sure that if extensions to the existing facilities or indeed brand new marinas were built, they would soon be full to capacity.

The reasons aren’t hard to fathom. Gibraltar just about has it all when it comes to the marine leisure industry. The location of course is unbeatable. Imagine it. Totally secure, a commanding position at the mouth of the Mediterranean, exciting new ports in North Africa within touching distance and one of the great oceans just a few miles away. An international airport thrown in and what else was it? Oh yes, the climate – which is how I started this piece.

This location has ensured that Gibraltar has always punched well above its weight in terms of its maritime history. Although we see far fewer naval visitors than in the days of yore, the strategic advantages that appealed to naval commanders still pertain today for the leisure mariner.

It doesn’t end there. Once in Gibraltar, fuel is considerably cheaper, despite the pound’s fall in value over the last year or so. Supplies of all kinds are also readily available and there is hardly anything you cannot find here. And remember, there is no VAT!

The economic advantages of all this activity are obvious. Visiting yachts in particular should be made especially welcome by all of us. Think of the opportunity. Apart from fuel and supplies for the vessels themselves, yacht captains and crews stay and spend some of their earnings here, be it in the bars and restaurants or some well-earned retail therapy after all that time aboard.

I referred earlier to the two separate ways in which the yachting industry plays a vital part in our economy. Everything above can be seen by the public. After all we cannot miss the fact that the marinas are full and who cannot be impressed by the increasing number of ‘super’ or even ‘mega yachts’ that visit every year? But, although it may be an unfortunate expression to use in nautical terms, this is just the tip of the iceberg. There are countless other business opportunities lurking beneath the surface.

Gibraltar is part of the Red Ensign Group, the elite of shipping registries, which comprises the UK, its Crown Dependencies and Overseas Territories. Indeed as a ‘Category 1’ member, Gibraltar can register ships of unlimited tonnage and type. I may return to commercial shipping in a future piece, but for now we’ll just stick to yachts.

The Red Ensign or ‘Red Duster’ is, of course, familiar to all and much respected worldwide. In fact the flag that flies from Gibraltar-registered yachts should be the ‘defaced’ ensign that features ‘the Union Flag in the canton and the badge of Gibraltar in the fly’.

The Gibraltar Yacht Registry is a thriving business and there are a number of local service providers who can assist in the process. Apart from the prestige and international recognition that derives from the flag itself, other practical advantages arise – the English language and a globally respected Common Law legal system. Any title issues should therefore be easier to manage and, should difficulties occur anywhere in the world, flying the Red Ensign allows access to British embassies and consulates where assistance will be provided.

Apart from the registration process, a Gibraltar company can also be used to hold ownership of a yacht. There are several advantages to this: limited liability should anything go wrong, or ease of sale through the simple transfer of shares in the yacht-owning company. Insurance can also be arranged locally to cover the yacht, its crew and all other aspects of its operation.

I mentioned earlier the lack of VAT in Gibraltar in the context of purchasing fuel and supplies. The same exemption applies to the yachts themselves. Strict rules apply to the ‘temporary importation’ of a yacht into European Union waters but, with proper advice and execution, the prospect is hugely attractive.

In essence it works like this. A Gibraltar-registered yacht owned by a non-EU resident can operate in EU waters VAT-free for up to 18 months. It must then leave the VAT area and obtain some form of documentary evidence that it has done so at the end of that time. This can of course be arranged in Gibraltar itself, or in Morocco or further afield if preferred. Changes brought in last year now mean that when re-entering the EU, an oral declaration must be made; this can be done most easily in one of our neighbouring Spanish marinas – Alcaidesa Marina just across the bay is ideal.

Too often in Gibraltar we are accused of not promoting ourselves with sufficient vigour. This cannot be said of the local professionals involved in the yacht industry. The Gibraltar Yachting Business Development Association (GYBDA) was officially launched in May last year to further develop the yachting and Super Yacht sector in Gibraltar by creating the right business conditions for its success That will be good for the industry and for all the rest of us because more yachts – and their crews – will be encouraged to visit and stay longer.

My good friend Gabriel González, the GYBDA’s general secretary, reminds me that the association will be representing Gibraltar at the Monaco Yacht Show at the end of this month – proof indeed that our jurisdiction is playing at the top table in this game. Check out their website www.gybda.com

When next you visit one of our local marinas, stop a while. Look around and see how many Gibraltar-registered vessels you can see – and be proud. The leisure marine sector provides vital additional income and value to our diversified economy. We should all embrace this exciting industry and welcome more yachts – and their crews – to Gibraltar.

Contact Ian Le Breton for more details
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