TYBA pushes to tap yacht charters potential
Thailand needs to overhaul crucial aspects of allowing superyachts to operate in Thai waters if the country wants to remain competitive in the lucrative industry, says the Thai Yachting Business Association (TYBA).
Thailand, among other Southeast Asian countries, must keep regulations for foreign-flagged yachts clear and simple. Ideally, all departments involved, such as the Revenue, Customs and Immigration, Harbour Department and Tourism Authority, collaborate to deliver a seamless experience,” explains Lies (‘Lisa’) Sol, Charter Broker/Manager at Northrop & Johnson (SEA) Ltd, based in Phuket.
Ms Sol is a TYBA Board member, while Northrop & Johnson has been on the board of TYBA for over a decade. “Over the years, representatives of the TYBA succeeded in obtaining longer stays for visiting yachts of up to 2.5 years. The next urgent issue is to find a solution for crew being allowed to stay for 30-days at a time only, after which they have to leave Thailand,” Ms Sol said.
“TYBA members are in discussion with government officials about creating a ‘yacht crew’ visa category and linking crew visas to the yachts,” she added. Last but not least, an ‘Inter-provincial Cruising Permit’ would be welcomed, Ms Sol noted.
HOOPS
“A day-charter from Phuket to Phang Nga to Krabi and return is only a few hours’ cruising but requires checking in and out of all these provinces each and every time: a time-consuming process for which many documents are required, and cost are considerable,” Ms Sol explained.
The call for greater streamlining of bureaucratic procedures follows a meeting of the TYBA with leading government officials in July. The meeting was presided over by Phuket Governor Sophon Suwannarat, and attended by key figures including Surat Sirisayat, Director of the Ship Registration Standards Bureau, and Phuket Marine Chief Natchapong Pranit.
Joining the meeting were more than 100 people representing government agencies on the island, as well as key tourism industry figures and operators from Phuket’s marine tourism sector. The primary agenda was to discuss the draft announcement of the Ministry of Transport, aimed at establishing new criteria, methods and conditions for granting permissions to large cruise and sports boats ‒ that is, superyachts ‒ to non-Thai owners.
Ms Sol explained that the TYBA is a non-profit marine leisure industry association run completely on a volunteer basis serving yacht builders, charter operators, sales brokerage and dealerships, marinas, yacht repairs, yacht management and other yachting-related companies throughout Thailand.
“The primary objective of the TYBA is to provide a medium through which all yachting related businesses in Thailand can address their concerns with the relevant authorities,” she said.
“The TYBA has been one of the organisations at the forefront of opening up Southeast Asia to superyacht charters. Many years of working behind the scenes culminated, finally, in the announcement of the new Thai Charter License (TCL), the first of which was presented to luxury yacht Ocean Emerald in 2015.
“Further clarifications, such as VAT and import arrangements were next on the agenda. By early 2021 all was in place and foreign-flagged yachts could apply for a license,” added.
“Initially very time-consuming, it will take less time now as the application process runs a lot smoother. A TYBA member company must handle the applications,” Ms Sol noted.
Ms Sol described the process, in short, as:
The license allows foreign-flagged yachts (LOA 30m+) to charter in Thai waters.
Adequate insurance, covering paid charter guests is required.
A Thai VAT number is applied for.
Thai VAT (7% of the charter fee) is payable by the charterer.
Corporate Income Tax (CIT) of 5% is payable by the owner.
A Thai Fiscal Representative (TFR) handles VAT and CITpayments on behalf of the owner.
However, Ms Sol also noted that the application fee for a 30m yacht, including “substantial” cost of translating yacht documents, is about B170,000. “The license will be valid up to the end of the yacht’s insurance period only, and it takes two to three months to obtain the license,” she said.
At the hearing at the Phuket Provincial Hall on July 19, amendments to the Superyacht License regulations were discussed, and included: Reducing the minimum size able to apply to yachts of 24m+; standardising and clarification of the process; and reducing the application time to 25 days.
BOOM
The Phuket charter market stands to benefit greatly from making charters easier to operate and more accessible, Ms Sol said plainly. 9/9/24, 9:31 AM TYBA pushes to tap yacht charters potential https://www.thephuketnews.com/tyba-pushes-to-tap-yacht-charters-potential-93558.php 2/7
“Although many private and charter yachts were sold or relocated elsewhere due to COVID, (super) yachts are appearing again in Southeast Asia, specifically in Phuket. After years of cruising in the Caribbean during winter time, owners and charterers seem to be open to new, exciting destinations as found here,” she explained.
Other APAC countries are already taking advantage of the burgeoning market, Ms Sol said.
“Australian yachting industry stakeholders have long campaigned for legislative change, resulting in the Special Recreational Vessels Bill of 2019. This permits non-Australian superyachts to conduct commercial charter activities in Australian waters for a two-year period, which can be extended,” Ms Sol said.
“‘Explorer Charter Destinations’ New Zealand, Tahiti, Fiji and Papua New Guinea created Temporary Import Entry (TIE) rules, permitting foreign-flagged yachts to cruise/commercially charter in each of the four countries on a revolving basis, for a minimum of two years,” she added.
Polynesia has announced an even longer period of 60 months for foreign vessels to visit its islands, including Tahiti, while Australian officials have noted that the two-year contract can be extended in that country. French Polynesia announced an even longer period of 60 months for foreign vessels to visit its islands, including Tahiti. Further, any goods, equipment, and services purchased during the TIE period ‒ such as berthage costs, repairs, or refit works ‒ are exempt from being taxed.
BENEFIT
“Numbers show superyacht charter is important for the Thai economy. Tremendous potential for charters in the APAC region can be determined from a report by Northrop & Johnson’s Anne Dixon, using YachtFolio booking data of May 2023/4, Ms Sol noted.
“YachtFolio, the world’s prime industry platform, lists over 2,200 charter yachts worldwide of which 1,700 yachts over 24m. In May 2023, 9 charters were booked in Thailand at an approximate charter value of US$5,3 million [about B181.124mn] and in May 2024, 13 charters were booked at US$1.35 million [B46.142mn],” she said.
“Compare that to the Caribbean, where in May 2023 388 charters were booked at US$109mn, and in 2024 412 charters at US$130mn. In the Mediterranean, charter values in both years were over US$500mn. These numbers do not include yachts smaller than 24m, or yachts not listed on this platform: actual numbers are much higher,” Ms Sol said.
“Besides Thai VAT and CIT revenue, there are other benefits to the Thai economy. Yachts require maintenance and service and food and beverage provisioning for crew and charter guests (per charter about 25% of the charter value). Charter guests tend to spend heavily on hospitality and tourism activities. Superyacht crew expenditure also directly benefits local and national businesses,” she added.
“So, is it worthwhile to encourage yacht charter, and is there room for growth in Thailand? Yes and Yes…… absolutely! The TYBA is looking forward to keep working together to increase revenue for the yachting industry and for Thailand,” Ms Sol concluded.
Original story from The Phuket News
