Short answer. Buying a yacht abroad, or from a foreign seller, exposes a buyer to risks that a condition survey does not cover: a mortgage recorded on a register he never searched, a maritime lien that follows the hull, VAT that was never paid and falls due on entry into the European Union, a seller caught by sanctions, an absent CE conformity that bars the boat from the European market, an owning company whose debts come with the vessel. Ten checks, carried out before signature or at the latest before acceptance, cover the essentials.
The second-hand yacht market is international by nature. A French buyer buys in Palma, Genoa, Fort Lauderdale or Antalya, from a seller in the British Virgin Islands, under the Maltese flag, through a Monaco broker, on an English law contract. Each of those elements brings its own rule, its own register and its own trap. What follows is the list of checks the firm carries out on a pre-purchase due diligence, in the order in which they arise.
1. Title: who actually owns the vessel
The first check is the register. Every registered ship appears on a register kept by the flag State, showing the owner and the recorded real rights. In France this is the file provided for by article L. 5114-2 of the Transport Code, whose entry records the owner, the co-owners and the rights over the ship (article L. 5114-3). Abroad, each register has its own rules: the British, Maltese, Cypriot or Cayman registers issue official transcripts of registry, which must be obtained directly from the authority and not from the seller, and dated within a few days of signature.
The buyer verifies that the seller named in the contract is indeed the registered owner, that the vessel identified by name, hull number, official number and call sign is the one he inspected, and that no entry affects ownership. A seller who is not the registered owner, or who sells on behalf of a company without evidence of authority, cannot transfer title.
2. Mortgages and maritime liens
A ship mortgage recorded on the register follows the vessel into the buyer’s hands: the seller’s lender can arrest the new owner’s boat. The transcript of registry reveals recorded mortgages, and the contract must provide for their discharge before or simultaneously with payment, through an escrow mechanism releasing the price against deregistration of the security.
Maritime liens are more dangerous, because they appear on no register: crew wages, salvage, port dues, damage done by the ship, and depending on the applicable law, yard or bunker supplies. They follow the hull into whosoever’s hands she passes. The check consists in obtaining evidence of payment of the crew, recent yards, marinas and suppliers, questioning the manager, and securing a contractual warranty that no privileged claim exists, with a retention of part of the price over the period during which a lien could still emerge.
3. The VAT status of the vessel
This is the check that costs the most when it is skipped. A yacht navigating in European Union waters must be in free circulation with VAT accounted for, or benefit from temporary admission, a regime reserved for vessels flying the flag of a third State and used by non-residents, limited in principle to eighteen months. A buyer resident in the Union who acquires a boat whose VAT was never paid, or whose proof of payment has disappeared, becomes liable for import VAT, in France at twenty per cent of value, at the first customs inspection.
The words VAT paid in a listing are worth nothing without evidence: an original invoice showing the tax, a customs receipt, a T2L document, a status attestation. The contract must turn that status into a seller’s representation, supported by the documents, and provide for the consequences of its inaccuracy. Where the boat lies outside the Union, the buyer organises importation, chooses the port of entry and computes the VAT on the purchase price; where the boat has been chartered under a leasing structure with VAT recovery, he checks that the structure has been properly closed.
4. Regulatory conformity and CE marking
A recreational craft placed on the Union market must satisfy Directive 2013/53/EU on recreational craft and personal watercraft, evidenced by the CE marking and the builder’s declaration of conformity. A boat built outside the Union for a non-European market and imported for the first time must undergo post-construction assessment by a notified body before it can be registered and used in the Union. That procedure carries a cost and an uncertainty: some boats cannot be brought into conformity at a reasonable price.
Above twenty-four metres, or for commercially operated vessels, other frameworks apply, notably the flag State codes for commercial yachts. The buyer therefore checks that the declaration of conformity exists, what design category it states, and whether that conformity matches the intended use and flag.
5. The intended flag and registration
Before signing, the buyer knows which flag he will fly, and checks that the flag will accept the vessel. The French register requires enregistrement and immatriculation, and for pleasure craft conditions of ownership based on nationality or residence. Open foreign registers such as Malta, the United Kingdom, the Cayman Islands or the Marshall Islands have their own conditions, often a local company or a representative.
Deletion from the existing register is a condition of entry on the new one: the contract provides for delivery of the deletion certificate, or of an irrevocable undertaking to delete, against payment. A boat that remains on two registers, or that cannot be deleted because a mortgage subsists, cannot be registered in France.
6. International sanctions and the beneficial owner
Since 2022, checking the seller has become a sanctions check. Buying a yacht from a person listed under the asset-freeze regimes of the European Union (Regulation (EU) No 269/2014 for Russia, and its equivalents for other regimes), of the United Kingdom, or of the United States (the OFAC SDN list), or from a company that such a person controls, exposes the buyer to nullity of the acquisition, freezing of the vessel and criminal proceedings for circumvention.
The check covers the seller, the beneficial owner of the owning company, the manager, and the source of funds where the seller himself acquired recently. It relies on beneficial ownership registers, consolidated sanctions databases and, in sensitive files, a reputational enquiry.
7. The vessel’s history: casualties, charter, refits
A yacht has a life before the sale. The buyer asks for the maintenance log, earlier survey reports, casualty declarations and their settlements, refit and yard invoices, and the commercial operating history. A boat operated in charter has run more hours, has been subject to flag State inspections, and may fall under a tax or social regime whose exit must be regularised. A vessel that has suffered a significant casualty, even repaired, carries a structural risk and a discount.
Requested in writing, this information becomes a set of seller’s representations; their omission or inaccuracy opens a remedy independent of the as is clause in the contract.
8. The survey and the sea trial
The condition survey is the technical check. It should be entrusted to an independent surveyor chosen by the buyer, at a yard where the boat can be lifted, with a written scope: hull and structure, moisture readings, through-hull fittings, appendages, engines with oil analysis and ECU readouts, electrics, gas, safety equipment, and a sea trial at full load. The report is delivered before the acceptance deadline expires.
Its contents mark the boundary between what the buyer accepts and what he may complain of later: whatever the surveyor saw, or ought to have seen, becomes apparent.
9. The contract: law, forum, deposit, closing sequence
The sale contract, most often a MYBA form or a broker’s form, designates a law and a forum. For a French buyer, French law adds a layer of protection against a professional seller, whereas London arbitration, the default in many forms, makes a mid-sized dispute economically impossible. These clauses are negotiable.
The contract then organises the deposit, usually ten per cent, held by a stakeholder whose identity and release conditions are written down; the conditions precedent covering finance, deletion, discharge of mortgages and conformity; and the closing sequence, where the balance is paid against simultaneous delivery of the bill of sale, the deletion certificate or irrevocable undertaking, the mortgage discharges, the conformity documents and the protocol of delivery. For a vessel registered in France, the bill of sale must be in writing on pain of nullity and carry the particulars identifying the parties and the ship (article L. 5114-1 of the Transport Code).
10. Buying the boat or buying the company
Many yachts are held by a company, often incorporated where the flag requires it. The seller then sometimes proposes to transfer the shares rather than the vessel: ownership of the ship does not change, the register is untouched, and the deal is presented as simpler. It is mostly riskier.
The buyer of shares acquires the company with all its liabilities, known and unknown: tax debts, unregularised VAT, crew contracts, pending disputes, commitments to a yard. A share purchase therefore calls for due diligence on the company itself, warranties and indemnities, and often a retention. Where the structure is not required by the chosen flag, buying the vessel itself, with deletion and fresh registration, is the safer route.
You have found a yacht abroad and the broker is pressing you to wire the deposit? The ten checks run in parallel with the survey, over one to three weeks. An initial discussion identifies which of them are critical in your case.
Frequently asked questions
How do I check that a yacht bought abroad is free of mortgages?
By obtaining a recent official transcript directly from the flag register authority, showing the owner and any recorded mortgages, and by providing in the contract for discharge against payment through escrow. Maritime liens, which are not recorded anywhere, are checked through evidence of payment of crew, yards and ports.
What happens if VAT on the boat was never paid?
A buyer resident in the European Union becomes liable for import VAT, in France at twenty per cent of the value of the vessel, at the first inspection. The words VAT paid in a listing are worth nothing without an original invoice, a customs receipt or a T2L document.
Can a boat built in the United States be registered in France?
Only if it satisfies Directive 2013/53/EU, which for a vessel without CE marking means post-construction assessment by a notified body. Both the cost and the likely outcome should be established before the purchase, not after.
Should the seller be screened against international sanctions?
Yes, systematically. The seller, the beneficial owner of the owning company and the manager are screened against European Union, United Kingdom and OFAC lists. Buying from a designated person exposes the buyer to nullity, freezing of the vessel and prosecution.
Is it better to buy the yacht or the company that owns it?
The vessel, unless the chosen flag requires a structure. Buying the shares transfers the whole of the company’s liabilities, known and unknown, and calls for due diligence on the company, warranties and indemnities, and a retention of part of the price.
Further reading: ship and yacht purchase due diligence, international yacht sales, ship arrest in France.
Written by Hervé Guyader, avocat at the Paris Bar, doctor of law. This content is general information and is no substitute for advice on your own matter.