In the world of yacht transactions, particularly at the higher end of the market, it is not uncommon for buyers and sellers to consider completing a sale “on the high seas” — that is, outside a country’s territorial waters, typically beyond the 12-nautical-mile limit. While this may sound unconventional at first, it is in fact a well-established practice used in carefully structured transactions where legal, tax, and operational considerations intersect.
At its core, the rationale behind a high-seas closing lies in how jurisdictions assess the place of supply of goods — and, in turn, how VAT and other indirect tax implications arise. In many cases, the location of the yacht at the exact moment ownership transfers can influence the tax treatment of the transaction. For this reason, completing a sale outside territorial waters is often used as part of a broader strategy to support a particular VAT position, especially in cross-border scenarios, exports, or transactions involving non-EU buyers.
Why Yacht Sales Are Sometimes Completed on the High Seas
However, it is important to be clear: closing offshore is not, in itself, a solution. Tax authorities will always look beyond the mere location of signing and assess the full substance of the transaction — including where the yacht was prior to closing, where it is heading, who is responsible for its movement, and whether the documentation supports the intended treatment.
Beyond tax considerations, there are also practical and commercial reasons why parties opt for this approach. One of the most compelling is the ability to align the moment of legal completion with the physical delivery of the yacht. By closing offshore, parties can clearly define the exact point at which ownership, possession, operational control, and risk transfer from seller to buyer.
High-seas closings can also offer a degree of jurisdictional neutrality, particularly in international transactions where buyer and seller are based in different countries.
Documentation, Substance and Practical Risks
That said, the advantages must be weighed against complexity. Offshore closings require careful coordination — weather, crew, fuel, timing of funds, and legal documentation all need to align.
There is also a higher evidential burden, including AIS tracking, captain’s statements, and delivery protocols. Without this, the structure may be difficult to defend.
Importantly, VAT and customs obligations may still arise when the yacht enters another jurisdiction, meaning offshore closing is just one element of a broader strategy.
Ultimately, the effectiveness of a high-seas closing depends on substance over form — ensuring the entire transaction is coherent, well-documented, and commercially aligned.
Speak to UNICO Yachting
At UNICO Yachting, we understand that no two yacht transactions are the same — particularly when they involve cross-border structuring, VAT considerations, or offshore closings.
As a boutique yacht brokerage backed by the wider expertise of CSB Group, we offer a fully integrated service that goes beyond the transaction itself.
From brokerage and acquisitions to flag registration, VAT structuring, yacht finance, insurance, surveys, delivery, and ongoing support, we ensure every aspect is aligned from the outset.
If you are considering buying or selling a yacht and want to ensure your transaction is structured efficiently and compliantly, we invite you to contact UNICO Yachting.
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