Chartering a yacht with its captain to paying guests without a manning permit or commercial yachting status exposes the owner to prosecution for sailing without the required title and for undeclared work, to VAT and customs reassessments, and to refusal of cover by the insurer. The broker who organises the charter incurs its own liability.
The boat is expensive to keep, it sails only six weeks a year, and a broker offers to charter it with its captain to guests who will pay thirty thousand euros a week. The owner signs, the broker collects its commission, the guests come on board. Everyone is happy until the day a maritime gendarmerie or customs launch comes alongside at the harbour entrance and asks for the manning permit, the crew list, the safety certificate and the employment contracts.
That day, the owner discovers that his boat never had the status that would have allowed it to carry paying passengers, and that what seemed to him a rental between private persons is, in the eyes of the administration, a clandestine commercial operation. The consequences pile up: criminal, social, tax, customs, insurance, and civil liability with no safety net on the day a guest is injured. The broker is not safe just because it is not the owner. Here is what the law says, and what each party risks.
The dividing line: personal use or commercial use
French law knows only two ways of using a pleasure vessel, and it tolerates no grey area between them. Article 1 of Decree no. 84-810 of 30 August 1984, as amended by Decree no. 2025-1101 of 19 November 2025, defines a pleasure vessel for personal use as one used privately by its owner, by a non-profit association, by a hirer who has full disposal of it or by a borrower free of charge, for leisure or sport, without it being used for any commercial activity, the sole exception being the display of sponsorship messages.
The same article defines the pleasure vessel for commercial use, which everyone calls a NUC (navire de plaisance à utilisation commerciale), as a pleasure vessel used for a commercial service of carrying passengers, under the responsibility of the shipowner or its representative the captain, for tourist or sporting navigation, with a number of passengers limited by order and not exceeding twelve on a motor vessel and thirty on a sailing vessel.
Two lessons follow immediately from these definitions. The first is that bareboat charter of a private boat is not in itself prohibited: a hirer who has full disposal of the vessel uses it personally, and the boat remains a pleasure vessel for personal use. The second is that everything changes as soon as a crew is supplied with the boat, or the owner keeps control of the navigation, or what is sold is no longer a boat but a holiday. The client no longer has full disposal of the vessel: he is carried. He is a passenger. And a paying passenger may only board a vessel manned for that purpose.
The ministry responsible for the sea says nothing different. Its guidance on commercial yachting states that a pleasure vessel engaged in the commercial carriage of passengers must be recognised as a NUC, that its captain must hold at least the Capitaine 200 certificate, and that carrying passengers for payment on a vessel that is not a NUC, or without a command certificate, is a serious offence of unlawfully exercising command and may be recharacterised as undeclared work. That is the inspectors’ reading grid.
What the commercial regime requires, and what illegal charter bypasses
NUC status is not a box ticked on a form. It requires the vessel to meet the technical requirements of Division 241 where it measures 24 metres or less, and of Division 242 above that, to have been surveyed and to have been issued a navigation permit for that use. It then requires full administrative manning.
Article L. 5231-1 of the Transport Code requires every French-flagged vessel to hold a maritime navigation title, and article L. 5231-2 recognises only two: the manning permit (permis d’armement) and the circulation card (carte de circulation). The circulation card, provided for in article L. 5234-1, is reserved for vessels used for personal use. The manning permit, required by article L. 5232-1 for any vessel used professionally, is the authentic instrument constituting the vessel’s administrative manning and certifies that the crew composition and conditions of employment comply with Book V of the fifth part of the Code. A private yacht chartered with crew therefore sails with the title for personal use while engaged in professional use: it sails without the title it must hold.
Add to this the requirements relating to seafarers, the part of the system that informal arrangements most often forget: a written seafarer’s employment agreement containing the particulars of article L. 5542-3, a captain and crew holding the training certificates and medical fitness required by articles L. 5521-1 and L. 5521-2, and affiliation of commercial yachting crew to the scheme of the Établissement national des invalides de la marine under article L. 5551-1. Illegal charter is precisely commercial operation without any of these building blocks.
The criminal side: three sets of offences that add up
The first level concerns navigation titles. Article R. 5232-25 of the Transport Code punishes with a fifth-class petty offence fine the shipowner or owner who sails, berths or operates a vessel without the navigation title it must hold, or fails to produce it on first request by the maritime authority. The amount is modest, but it applies as many times as there are findings, and it is only the entry point.
The second level concerns safety. Article L. 5241-12 punishes with one year’s imprisonment and a fine of 75,000 euros the operator or owner of a vessel who sails it without a valid safety certificate, and the captain incurs the same penalties. The safety certificate of a NUC is the navigation permit issued after the safety centre’s survey for that specific use: a boat carrying paying passengers without ever having been surveyed as a NUC sails, for that operation, without a certificate.
The third level concerns qualifications, and it is the one expressly targeted by the administrative guidance on unlawful command. Article L. 5523-2 punishes with six months’ imprisonment and a fine of 3,750 euros exercising command of a vessel or any other function on board without meeting the qualification requirements of the Code. Article L. 5523-3 extends these penalties to the owner of the vessel, the operator, their legal representative or de facto manager, and any person exercising in law or in fact a power of control or direction in the management or running of the vessel, where that person caused the offence. Article L. 5523-6 imposes the same penalties on the shipowner or captain who admits on board a crew member without the training certificates corresponding to his duties or a valid medical fitness certificate. A yacht captain who holds only a pleasure craft licence, engaged by an owner who never asked what it takes to command a commercial vessel, exposes both of them.
The social side: undeclared work is not a textbook case
A captain and a stewardess paid in cash, or by transfer from a foreign company without declaration in France, to serve paying guests on board a yacht operated from Antibes or Saint-Tropez amounts to concealed employment within the meaning of article L. 8221-5 of the Labour Code. It is punishable under article L. 8224-1 by three years’ imprisonment and a fine of 45,000 euros for individuals, the fine being multiplied by five for legal entities under article 131-38 of the Criminal Code. On top of these penalties comes the reassessment of contributions for the whole period, with the surcharges specific to undeclared work.
Maritime law adds its own sanctions. On board a foreign vessel providing a service mainly in French waters, articles L. 5561-1 et seq. of the Transport Code apply the French rules on minimum wage, working hours and social protection, and article L. 5566-1 punishes with a fine of 3,750 euros recruiting seafarers without a written employment contract, a repeat offence being punishable by six months’ imprisonment and a fine of 7,500 euros. Article L. 5566-2 imposes the same amount, per seafarer, for lack of social protection of an EU Member State. Having the captain sign a contract with a management company established outside France therefore does not make the problem disappear: it moves it to another charge.
The tax and customs side: what the administration takes back
Short-term hire of a means of transport is subject to VAT at the place where the boat is made available to the hirer, under article 259 A of the General Tax Code. A charter departing from Cannes is a supply taxable in France at the standard rate, subject to the reduction allowed by the tax guidance for the time the vessel is actually used outside EU waters, which the lessor assesses on its own responsibility from AIS data or the logbook, for contracts concluded since 1 November 2020 (BOI-TVA-CHAMP-20-50-30, § 40). An owner who collects hire without invoicing or paying over the tax owes it on all the charters, with late interest and the 40% surcharge for deliberate failure or 80% for fraudulent practices under article 1729 of the General Tax Code. The hire itself is taxable income, and the reassessment period is extended from three to ten years where the activity is concealed. In clear-cut cases, the offence of tax fraud under article 1741 of the same code, punishable by five years’ imprisonment and a fine of 500,000 euros, cannot be ruled out.
Fuel is the second item. The commercial regime allows bunkering free of excise duty, and some owners of private boats rely on this by presenting their charters as a commercial operation. The Cour de cassation has just recalled, in a decision of 16 September 2026 to be published in the Bulletin (Cass. com., 16 September 2026, no. 24-19.047), that the test for the exemption is the use made of the vessel by its end user, hirer or charterer, and that chartering or hiring a boat for pleasure purposes does not qualify for the exemption, in line with the case law of the Court of Justice (CJEU, 16 September 2021, case C-341/20). It reserves only one case, that of contracts which, under the name of charter, provide a package of services comparable to that of a cruise ship to parties who are in reality only passengers with no control over the use of the boat, and it requires the lower courts to examine each contract. For an owner who charters out his private boat, the hope of duty-free fuel is therefore vain, and having obtained it exposes him to a reassessment.
The same case illustrates the third item, which concerns yachts under a non-EU flag: a vessel registered in the Cayman Islands, operated commercially in Martinique by a French company under temporary admission, was notified of an offence of misuse of the temporary admission regime amounting to import without declaration, with a reassessment of import VAT on the vessel. Temporary admission is reserved for private use by non-residents; illegal charter of a yacht under this regime triggers the customs debt on the value of the boat.
Insurance will not follow
All yacht policies exclude commercial use of the vessel, or make it subject to a declaration and an extra premium. An owner who charters his boat with crew without telling his insurer is in one of the two situations the Insurance Code treats most severely. If the policy is governed by the marine rules, article L. 172-2 allows the insurer to seek annulment of the contract for omission or misstatement likely to reduce significantly its view of the risk. If it is governed by the non-marine rules, article L. 113-8 makes the contract void for intentional concealment or misstatement, and article L. 113-9 reduces the indemnity proportionally where bad faith is not established. Article L. 113-2 also requires new circumstances aggravating the risk to be declared during the contract.
In practical terms, on the day the boat hits a rock with guests on board, the owner has neither hull cover nor liability cover, and he alone is liable for his passengers’ personal injuries. Limitation of liability under articles L. 5121-2 et seq. of the Transport Code remains available to him in principle, but article L. 5121-3 refuses it to a person whose loss results from a personal act committed recklessly and with knowledge that such loss would probably result, and a court may be tempted to see such recklessness in carrying paying passengers on a vessel never surveyed for that purpose, with a captain lacking any certificate.
The broker: not the owner, but not untouchable
A broker who markets the charter of a boat it knows lacks commercial status is exposed on three counts.
Criminally, first. Article 121-7 of the Criminal Code makes an accomplice of anyone who knowingly, by aid or assistance, facilitated the preparation or commission of an offence, or induced it by abuse of authority. Organising the charter, drafting the contract, collecting the price and passing it on to the owner means providing the help without which the illegal operation would not take place, and complicity in undeclared work as in the maritime offences is incurred. Article L. 5523-3 of the Transport Code, which targets any person exercising in fact a power of control or direction in the management of the vessel, may also directly reach a broker who appointed the captain and organised the rotations.
Civilly, next. A charter contract concluded for an operation the law prohibits is contrary to public policy within the meaning of article 1162 of the Civil Code, and its nullity leads to restitution under articles 1352 et seq. A client who learns, after a week spoilt by an inspection and a ban on sailing, that he paid for an unlawful service has a claim for return of the price and damages, and the broker, a professional bound by a duty to inform and advise, is the most solvent target. Its commission is, moreover, the consideration for a void transaction.
Professionally, finally. The market’s standard contracts contain representations by the owner on the regulatory compliance of the vessel. A broker who does not check them fails in the duty of care of its profession, and its professional liability insurer may raise against it a risk knowingly accepted.
Legal options exist, and they cost less than an inspection
An owner who wants to make his boat pay for itself has lawful routes. Bareboat charter, without crew supplied, remains within personal use provided the hirer has full disposal of the vessel; it calls for a suitable policy and declaration of the hire income, but no change of status. Moving to NUC status, with a survey of the vessel, a navigation permit, a manning permit and a qualified and declared crew, is the normal route for crewed charter, and it then opens, on their conditions, the tax and customs regimes specific to commercial operation described in our article on commercial yachts and the VAT exemption. Between the two, making a boat available with crew for a price, whatever it is called, has no place.
For yachts under a foreign flag, commercial status recognised by the flag State does not exempt them from French rules where the service is provided mainly in French waters, and the declaration of activity under article R. 5561-2 of the Transport Code, to be sent seventy-two hours before the activity begins, is the first document inspectors ask for.
What the firm does
We act at both stages. Before, to characterise the owner’s project and choose between bareboat charter, NUC status or operation under a foreign flag, costing what each option costs and yields, and to review the charter and management contracts the broker proposes. After an inspection, to organise the defence before the customs, the maritime administration and, where necessary, the criminal court: arguing the characterisation retained, challenging VAT and excise reassessments, negotiating social regularisation, and handling in parallel the insurance claim and guests’ claims. We also advise brokers and management companies who want to protect their practice before a file catches up with them.
This subject sits at the crossroads of two of our practical guides, both free to download: Operating a yacht in France: charter, crew, berth, accidents, what rules and what risks?, which brings together the ten building blocks of a lawful operation, from commercial status to crew contracts, berth and insurance, and Yacht tax and customs: which status to choose, and at what cost?, which sets out the three statuses side by side, with the documents that prove each one and the cost of leaving it. To have your own situation reviewed, contact the firm.
Further reading: Pollution from a ship: what the master and the owner risk; Disputes with a yacht broker: commission, mandate and deposit.
Frequently asked questions
Can I charter my pleasure boat to private individuals without changing its status?
Yes, on a bareboat basis: article 1 of Decree no. 84-810 of 30 August 1984 includes among pleasure vessels for personal use those used by a hirer who has full disposal of them. As soon as a crew is supplied with the boat or you keep control of the navigation, the hirer becomes a passenger and the vessel must be a pleasure vessel for commercial use.
What is a NUC and what does it take to obtain it?
A pleasure vessel for commercial use is a pleasure vessel used for a commercial service of carrying passengers, under the responsibility of a shipowner and a captain, for tourist or sporting navigation, with a maximum of twelve passengers under power and thirty under sail. It requires a safety survey, a navigation permit, a manning permit within the meaning of article L. 5232-1 of the Transport Code, and a qualified, declared and affiliated crew.
What penalties does the owner of a yacht illegally chartered with crew face?
They add up: a fifth-class petty offence for operating without a navigation title (article R. 5232-25 of the Transport Code), one year’s imprisonment and a fine of 75,000 euros for sailing without a valid safety certificate (article L. 5241-12), six months and 3,750 euros for unlawful command or employing an unqualified crew (articles L. 5523-2, L. 5523-3 and L. 5523-6), and three years and 45,000 euros for undeclared work (article L. 8224-1 of the Labour Code).
Does the broker who organises the charter risk anything?
Yes. It can be prosecuted as an accomplice under article 121-7 of the Criminal Code, or directly under article L. 5523-3 of the Transport Code if it exercises in fact a power of direction in the management of the vessel. Civilly, a charter contract contrary to public policy is void (article 1162 of the Civil Code), the client may claim return of the price and damages, and the broker’s commission is the consideration for a void transaction.
Can fuel be bought duty-free for a charter?
Not for a private boat hired out for pleasure purposes. The Cour de cassation holds, in its decision of 16 September 2026 (Cass. com., no. 24-19.047), that the excise exemption is assessed by reference to the use of the vessel by its end user and that hiring a boat for pleasure purposes does not qualify, except for contracts providing a full cruise-type service to passengers with no control over the vessel, which the court checks contract by contract.
What are the tax consequences of hire income collected without declaration?
Short-term hire of a boat made available in France is subject to French VAT (article 259 A of the General Tax Code), subject to the reduction for time spent outside EU waters allowed by BOI-TVA-CHAMP-20-50-30. Undeclared hire income leads to reassessment of VAT and income or corporate tax, with late interest and a 40% or 80% surcharge (article 1729 of the General Tax Code), and the reassessment period is extended to ten years for a concealed activity.
Does my yacht insurance cover an accident during a charter?
Almost never. Yacht policies exclude commercial use, and the insurer may seek annulment of the contract for misstatement of the risk (article L. 172-2 of the Insurance Code for a marine policy, article L. 113-8 for a policy under the non-marine rules) or reduce the indemnity (article L. 113-9). Passengers’ personal injuries then remain the owner’s personal responsibility.
Can a foreign-flagged yacht with commercial status charter in France?
Yes, provided it complies, in addition to the rules of its flag, with those of the host State where the service is provided mainly in French waters (articles L. 5561-1 et seq. of the Transport Code), in particular the prior declaration of activity under article R. 5561-2, the written contract and the crew’s social protection. A non-EU yacht under temporary admission, by contrast, cannot be operated commercially without triggering the customs debt.
Hervé Guyader, avocat at the Paris Bar, doctor of law.
For a charter project or after an inspection, the firm can be reached through its contact form.
Related analyses on yacht operation: yacht crew, on the contract, governing law and dismissal of the captain; marina berths, on usage rights, fees and termination; assistance and towage at sea, on the invoice and how to challenge it; accidents on board, on liability towards guests, passengers and crew; the French International Register, on the conditions and benefits of the flag.
On tax and customs: commercial yachts and the conditions of the VAT exemption and holding a yacht through a company.