Registration of a yacht in the Cayman Islands. Service offer

Section 4(1) of the Merchant Shipping Act, 2024 (the “Law”) sets the following exhaustive list of persons qualified to own a ship registered in the Cayman Islands:

• British citizens;
• British Overseas Territories and Crown Dependencies citizens;
• British Overseas citizens;
• British subjects;
• persons who, under the Hong Kong (British Nationality) Order 1986, are British Nationals (Overseas);
• Cayman Islands citizens;
• persons, other than those referred to in previous paragraphs, who are nationals or citizens of a Member State of the European Union, European Economic Area or an approved country*, including the overseas countries, territories or dependencies of such Member State or country;
• bodies corporate, shipping entities or foreign companies incorporated, established or registered in:
  • the United Kingdom or any of its Overseas Territories or Crown Dependencies;
  • a Member State of the European Union or European Economic Area, including any overseas country, territory or dependency of such a Member State; or
  • an approved country or any overseas country, territory or dependency of such an approved country; and
• foreign companies as defined in section 183 of the Companies Act (2023 Revision) carrying on business within the Cayman Islands which comply with all the requirements of foreign companies under that Act.

*“Approved country” means:

• a country included in the jurisdictions that are designated as having measures for combating money laundering and the financing of terrorism which are equivalent to that of the Cayman Islands in accordance with section 5(2)(a) of the Proceeds of Crime Act (2024 Revision) as amended from time to time; or
• a country whose citizens are persons qualified to own a ship registered in the United Kingdom.

The Law provides the following types of registration:

• full, interim and temporary registration of a vessel;
• registration of vessels that are under construction and any related mortgages;
• demise charter in/out vessel registration.

A ship cannot use a name that is already in use by another ship or a name that has already been reserved. Therefore, you will need to provide three names to be checked at the Registry to see whether they can be used.

The cost of initial registration of a vessel under a flag of Cayman Islands is USD 5 500. The services of Authorized Representative for the first year are paid extra.

The annual fee for acting as an Authorized Representative for a ship is USD 2 750.

The annual tonnage fee is calculated by the Shipping Registry based on the total tonnage of the ship. The minimum fee is USD 550 per year.

Provide for each director, shareholder (if individual) and beneficial owner:

• full name, residential address, occupation, citizenship;
• copy of passport/ID and proof of address certified by us/a notary;
• reference letter from a bank or a law firm addressed to the agent;
• completed questionnaire with possible names to be checked, description of the objects of the future company, etc.
• CV.

It is also necessary to disclose the origin of funds of the shareholder / beneficial owner, as well as the origin of funds of the company.

Section 5 of the Law states that no ship can be registered until a local representative person has been appointed in relation to the ship, which role our Cayman agents are prepared to perform.

Section 6(2) of the Law requires the local representative person in relation to the ship to be:

• an individual resident in the Cayman Islands; or
• a body corporate incorporated in the Cayman Islands and having a place of business there.

It is important to note that, despite the right to register a ship in the Cayman Islands, the Chief Executive Officer of the Maritime Authority of the Cayman Islands may instruct the Registrar not to register a ship if he believes that registration of the ship would be detrimental to the interests of the Islands or of international shipping based on:

• the condition of the ship;
• the safety, health and welfare of persons employed or engaged in any capacity on board the ship;
• the possibility of illegal use of the ship; or
• the record of the ship owner’s management and operational quality.

Accordingly, agents should be informed of any adverse circumstances mentioned above prior to registering a ship in the Cayman Islands.

Section 8(1) of the Law lists several noteworthy reasons why the Registrar may terminate the registration of a ship in the Cayman Islands:

• if a penalty imposed on the owner of a Cayman Islands registered ship for a contravention of the Law has remained unpaid for more than three months or if the owner of a registered ship fails to appear after being summoned to the trial after three months;
• if the tonnage fees have remained unpaid for more than two years;
• if a registered ship is no longer entitled to remain registered, for example, because the person qualified to own a Cayman Islands registered ship no longer holds a majority interest in the ship;
• if the owner makes an application to terminate the registration of the ship;
• if the registered ship becomes a total loss or is otherwise destroyed; or
• if a ship no longer has a local representative person.

*The fees are valid as of March 2025.