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Legal requirements for chartering in Spain

Legal requirements for chartering in Spain

To many people, the chartering of yachts in Spain legally –has always seemed like a riddle wrapped in a mystery inside an enigma, which is largely due to the cottage industry that has grown up around the provision of chartering licences there, and the dangerous, tail-chasing attempts to exploit non-existent loopholes.
In fact, although the process of obtaining a charter licence may seem overly bureaucratic, even by Spanish standards, it is actually logical and relatively straightforward.

Obtaining a charter licence

There are three steps, explained in greater detail below, that owners must take in order to charter:

Obtain a charter licence;
Pay the matriculation tax; and
Account for the value added tax (VAT) on the yacht.
If a charter agreement states that the charter begins and ends outside Spain, then, theoretically, no licence should be required and no matriculation tax should be payable. It is still possible for guests to visit places on land, leave and return to the yacht. But picking up guests in Spain begins to look like the charter is actually starting there. Port-specific advice should be taken, however, as official interpretations of the law vary considerably.

The entire process can be accomplished in as little as one month, but only if all the correct documents have been presented. If a yacht is not commercially registered, then the registration process itself may also require several months to complete; especially if the yacht requires additional equipment and modifications. However, it would need to fulfil these requirements wherever it was going to be chartered.

It should be noted that some agencies set up to help obtain charter licences and assist with matriculation tax use neither legally qualified staff nor take regular advice from specialist Spanish lawyers. Taking the wrong advice can lead to breaches of the law by owners, brokers and charterers alike, raising the spectre of fines being imposed and yachts being impounded.

Obtaining a Charter Licence

Step 1 – Prove your identity
To start with, owners (whether companies or individuals) must be able to demonstrate their existence and identity.

For individuals, their original passport (or a notarised copy) will be required, while companies will need to produce the original, or notarised copy, of their articles of association.

Step 2 – Prove you can charter a yacht
Owners must be able to show that they have the capacity to charter out their yacht. This is obviously not a problem for individual owners, but for companies, their articles of association will have to show their power to charter out the vessel.

If someone else is obtaining the licence on the owner’s behalf, a notarised power of attorney must be prepared by or for the owner, empowering the owner’s representative in Spain to undertake all such actions as are necessary to obtain the charter licence.

Step 3 – Register as a Spanish taxpayer
An owner must be made accountable for tax in Spain by registering as a taxpayer there. Alternatively, it is possible to lease the yacht to a charter management company that is tax-registered in Spain, although the company will then become liable for any unpaid taxes in Spain relating to the yacht, such as any unpaid VAT. A bank guarantee could be used to cover such liabilities, however.

Step 4 – Prove ownership and commercial registration
An owner must then be able to demonstrate ownership of the yacht, as well as showing that it is registered for commercial use and is therefore in compliance with the flag state’s safety laws applicable to commercial operation. So an original or notarised copy of the yacht’s certificate of (commercial) registry must be produced.

Step 5 – Show compliance with safety codes
Next, an owner must show the flag state safety code with which the yacht complies. For example, one of the UK’s Large Yacht Codes (hard copies are available from the Marine & Coastguard Agency).

For crewed yachts, an original crew list is also required, stamped by the flag state authority.

Step 6 – Yacht survey and compliance check
While the Spanish authorities respect the EU-wide safety measures for yachts over 24 metres LOA, those relating to yachts under this length tend to be less stringent, so a smaller yacht must be surveyed to ensure Spanish compliance and any required measures carried out.

The original survey report indicating compliance with the relevant Spanish safety regulations is then added to the pile of documents.

Step 7 – Supply original insurance certificates
Finally, original insurance certificates are required from underwriters, stating that a yacht is covered for third parties liabilities pursuant to Royal Decree 607/1999, and liabilities to passengers (and crew if applicable) as required by Royal Decree 1575/1989.

Once official, certified translations of all non-Spanish documents are prepared, after which the licence can be issued by the local Maritime Authority. This will usually last for three months but can be easily renewed.

Only EU-flagged yachts may be chartered in Spain. For the purpose of obtaining a charter licence, it seems that the Spanish authorities are prepared to consider the Isle of Man as part of UK, but this does not apply to other British flag states.

A yacht on charter may not carry more than 12 people, excluding the crew.

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