The yachting industry in the Middle East has experienced rapid growth over the last decade. An increasing number of yachts are based in the region, with 175 superyachts over 30m forecast to enter the region at least once by the end of 2024, according to a 2023 market report by Gulf Superyachts.
While 10 years ago, Middle Eastern clients preferred to charter yachts in the 40-80m
range, there is now a growing preference for building their own vessels and keeping them in the region. Government agencies are actively supporting this shift by rapidly developing ultra-luxury marine infrastructure across the Middle East.
This expansion has heightened the demand for top-tier yacht management companies that offer not only exceptional operational service, technical maintenance, and onboard care but also possess an in-depth understanding of the region’s unique market dynamics, regulatory environment, and cultural specialties.
The warm climate occasionally presents challenges and requires specific maintenance and operational strategies to ensure yachts remain in peak condition. This includes using advanced air-conditioning and seawater cooling systems, and adhering to maintenance schedules tailored to the local environment.
Management companies therefore proactively integrate these elements into their operations, ensuring yachts are not only compliant with local regulations but are adapted to the region’s unique demands.
The Middle Eastern luxury yacht market, driven by clients seeking exclusivity, demands a very high level of privacy and seeks a personalised service. Some clients might prefer culturally sensitive management that aligns with certain traditions, requiring crews to be trained in understanding particular customs and etiquette.
Where there is a strong preference for family-oriented activities, these experiences might need to cater to large, multi-generational groups.
Yacht management companies have adapted by ensuring that crew members are not only skilled in luxury service but also culturally aware, capable of delivering tailored experiences that meet the specific needs of clients of all cultures present in the region. This includes everything from dietary preferences, such as halal catering, to arranging private, culturally appropriate entertainment and activities.
Essentially not different from any other region, the legal and regulatory framework for yacht operations in the Middle East can, however, be intricate, with significant variations not only between countries but also among the different emirates within the UAE.
On that note, the UAE introduced a new maritime law, Federal Decree-Law No. 43 of
2023, which came into effect in March 2024. It replaced previous maritime legislation, addressing various issues and confusion that have arisen over the years. Article 18 allows charterers of foreign-registered vessels to apply for UAE registration and fly the UAE flag, provided the charter duration is at least six months and all registration requirements are met.
Article 19 permits owners of UAE-registered vessels to seek permission to fly a foreign flag when renting the vessel without equipment. This new law brings comprehensive reforms to vessel registration and precautionary arrest procedures, improving clarity, expanding eligibility, and aligning with international standards. These changes are expected to streamline maritime operations, and establish a more robust legal framework for maritime activities in the UAE.
Re-registration can be a strategic move, but it requires careful planning and a deep understanding of local laws. In the context of yacht charter operations in the Middle East, compliance with local laws is crucial for ensuring safe and legal operations.
Yacht management companies should have clear policies and training to ensure that all crew members and guests are aware of and adhere to these regulations, particularly when travelling across borders where rules may vary significantly. This approach helps maintain respect for local customs while also ensuring that all activities on board are lawful.
Oman, another emerging destination for yacht charters, presents its own regulatory challenges. Foreign yachts entering Omani waters must obtain a cruising permit, a process that requires detailed preparation and adherence to strict environmental regulations, particularly in ecologically sensitive areas like the Musandam Peninsula.
Oman’s legal framework, influenced by Islamic law, also affects various aspects of yacht operations, from onboard conduct to the types of activities promoted in a charter itinerary.
The taxation landscape adds another layer of complexity. In the UAE, for example, a five per cent value-added tax (VAT) may apply to yacht charters, depending on the specifics of the service and location. This tax must be accurately calculated and reported to avoid penalties.
While Oman does not currently have a VAT system, other fees and charges apply to charter operations, requiring careful management. Yacht management companies play a vital role in ensuring all necessary permits and licenses are obtained, that yachts comply with both local and federal regulations, and that crews are trained to meet the cultural and legal expectations unique to each country or emirate.
By expertly navigating these challenges, they ensure that yacht charters in the Middle East offer not only a seamless and legally compliant experience but also one enriched with the region’s culture, fantastic cuisine, and unique adventures.
phoenix-yachts.com
This article was first seen on YachtStyle.co
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