Sep 2025
With a strong and well-established track record in the market, the Cayman Islands stands out as a premier choice for superyacht registration. In this article, Conyers Partner Barnabas Finnigan and Associate Lucy Macris provide a high-level overview of what makes the Cayman Islands the preferred flag state for discerning yacht owners worldwide.
1. A Globally Respected Flag
The Cayman Islands Shipping Registry (CISR) is a Category 1 member of the prestigious Red Ensign Group, which means vessels flying the Cayman flag benefit from British Consular and Roya Naval support worldwide. The Cayman Islands flag is synonymous with high levels of safety, compliance, and operational standards, making it a mark of quality in the international yachting community.
2. Flexible and Efficient Registration Process
The CISR offers a streamlined registration process, with the majority of documents now capable of being handled digitally. Combined with the CISR’s experienced and highly responsive team of maritime professionals, this means that registrations can be conducted quickly and efficiently. Whether registering a new build or transferring an existing vessel, the process is designed to be user-friendly, with minimal bureaucracy involved. The CISR offers flexibility for ship owners with a choice of three ports: George Town, the Creek and Bloody Bay. There are also registration options for commercial and private use, including availability of the Yacht Engaged in Trade (YET) notation for yachts that charter.
3. Global Reach
In addition to their head office in George Town, the CISR are able to provide registration services through their representative offices in London, France, Greece, Singapore, Japan, Fort Lauderdale and Panama. They also have teams of surveyors based in the UK, France, Greece, Singapore, Japan, the USA and the Cayman Islands to facilitate pre-registration inspections in a timely manner. This ensures the registration process can be undertaken within a time zone suitable for the client.
4. Compatibility with International Regulation
The Cayman Registry is well-equipped to handle large private and commercial yachts, including those engaged in charter operations. It supports compliance with international conventions such as SOLAS, MARPOL, STCW, and the Maritime Labour Convention (MLC), ensuring that Cayman-flagged yachts meet the highest global standards. In particular, the Cayman Islands is consistently on the “white list” and rated as “low risk” for both the Paris and Tokyo MOUs, which encourages fewer vessel inspections and smoother port access. In addition, the Cayman Islands is recognised under the US Coast Guard Qualship 21 Programme, and has been identified as having positive performance indicators in all of the key areas by the International Chamber of Shipping in their annual flag state performance review. The CISR also supports hybrid and green technologies including newer models of yachts with innovative propulsion and fuel technologies.
5. Technical Excellence
The CISR is recognised for their technical expertise in the oversight and regulation of yacht construction and operation. Playing a key role in the development and implementation of an updated Large Yacht Code and shaping legislation within the Red Ensign Group. in developing the relevant legislation governing the regulation of yachts operating in both the commercial and pleasure sectors. Leveraging on this, the CISR offers tailored consultancy services to support yacht owners and managers throughout constructions or conversion projects.
6. Competitive Cost Structure
The CISR offers excellent value given the quality of service, regulatory strength, and international recognition that they offer. The CISR’s cost structure is competitive when compared to other high-standard registries, and reflects the jurisdiction’s focus on quality and safety.
7. A Stable and Trusted Legal Framework
The Cayman Islands is a British Overseas Territory with a democratically elected parliament, an electoral system based on the British parliamentary model and a legal system based on English common law, with the Privy Council as the ultimate court of appeal. The jurisdiction offers a number of advantages including:
- A stable political and legal environment
- A solid fiscal position
- Creditor-friendly laws
- A robust yet flexible corporate regime
- No direct taxes (e.g. on income, capital gains, or withholding) imposed by the Cayman Islands government on any Cayman Islands company
- Adherence to international regulatory standards, including the implementation of measures to comply with FATF and OECD standards of anti-money laundering and anti-corruption and the introduction of beneficial ownership and economic substance regimes.
These features make the jurisdiction particularly attractive for the ownership, financing and registration of high-value assets such as superyachts.
8. Financing and Security Advantages
As a creditor friendly jurisdiction, the Cayman Islands is an attractive jurisdiction for owners who need to finance their yacht, as well as for financiers who are looking for comfort that their security interests and rights over the underlying yacht will be upheld and enforced.
In order to be filed with CISR and recorded by the registrar of shipping (the Registrar), any mortgages over a Cayman Islands flagged vessel will need to be governed by Cayman Islands law and must be in the prescribed form of statutory mortgage required under the Merchant Shipping Act (as revised) of the Cayman Islands (the “Merchant Shipping Act”).
There are two types of ship mortgage available in the Cayman Islands:
- an ‘account current’ mortgage, which secures all amounts payable to the mortgagee by the mortgagor under the loan and any other associated security documents, together with enforcement costs of the mortgage itself; and
- a ‘principal sum and interest’ mortgage, which simply covers the principal sum secured under the mortgage plus any interest as agreed between the parties.
It is also possible to register a mortgage over any vessel under construction registered with the CISR in addition to fully completed vessels.
With the exception of the ship mortgage, Cayman Islands law does not require documents relating to a Cayman Islands flagged yacht to be governed by the laws of the Cayman Islands, and commonly they would follow the governing law of the loan and other transaction documents. A Cayman Islands court will recognise and enforce foreign law-governed contractual and security arrangements, provided these are validly created under the applicable governing law of the relevant document. Additionally, the courts of the Cayman Islands will generally recognise and enforce any monetary judgement (and in certain circumstances, for non-monetary relief) obtained in a foreign court arising under those foreign law governed security documents in respect of a Cayman Islands owner or Cayman Islands flagged vessel.
A financier will not be deemed to be resident, domiciled or carrying on business in the Cayman Islands solely as a result of the entry into/performance and/or enforcement of any transaction or security documents in relation to a Cayman Islands flagged vessel, nor will they need to be licenced, qualified or otherwise entitled to carry on business in the Cayman Islands in order to enforce their rights under those documents.
9. Depth of Experience
The Cayman Islands has long been a jurisdiction of choice for registering not only yachts but also aircraft, investment funds, and other high-value assets. Its deep pool of experienced service providers, including legal, fiduciary, and corporate services, ensures that owners receive world-class support throughout the lifecycle of their asset.
10. A Broad Range of Ownership Structures
More than 70 countries are now qualifying jurisdictions for the purposes of owning Cayman flagged vessels. This means that it is no longer necessary that a ship owner be located or incorporated in the Cayman Islands to register a vessel with the CISR.
In order for a ship or yacht to be registered in the Cayman Islands, it must be majority-owned by a person qualified to do so under the Merchant Shipping Act. This includes, amongst others, individuals and/or bodies corporate, and shipping entities or foreign companies incorporated, established or registered in:
- the UK or any of its Overseas Territories or Crown Dependencies (including the Cayman Islands, Bermuda and the British Virgin Islands);
- 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” being any jurisdiction that is designated as having measures for combatting money-laundering and the financing of terrorism which are equivalent to that of the Cayman Islands under the Proceeds of Crime Act (2020) Revision, or any overseas country, territory or dependency of such “approved country.”
Non-resident owners of a Cayman Islands-flagged ship or yacht, or do not otherwise have their principal place of business in, the Cayman Islands, are required to appoint a local Representative Person in the Cayman Islands in connection with the vessel. The Representative Person may be either a resident or a company incorporated in the Cayman Islands and having a place of business there. The Representative Person must remain appointed for the entire period the vessel is registered under the Cayman Islands flag.
11. Flexible Alternatives
For owners who don’t meet the requirements for a “qualified person” under the Merchant Shipping Act, the good news is that they have access to a variety of alternative structuring options in the Cayman Islands, each of which offer flexibility, privacy, and asset protection. These structures are particularly attractive to high-net-worth individuals and family offices seeking to manage their assets efficiently. These include:
a) Cayman Islands Special Purpose Vehicles (SPVs)
The most common ownership structure for yachts and other similar assets is to establish a Cayman Islands exempted company as an SPV to act as a holding company for the purpose of acquiring and holding title to the yacht or asset. Cayman Islands exempted companies offer a number of advantages, including:
- Limited liability and separate legal personality
- No minimum capital requirements
- No local director or shareholder requirements
- No requirement to file audited financial statements
SPVs can be structured as on-balance sheet structures, where the shares are owned directly by the beneficial owner, or as off-balance sheet/orphan structures, where ownership is held by a trustee under a charitable or purpose trust. These types of “orphan” structures are often used in secured financing arrangements where lenders want to ensure the structure is bankruptcy remote.
b) Trust Structures
In some cases, it may be appropriate for the beneficial owner to establish a trust structure (for instance, for estate planning purposes) to own the yacht either directly or indirectly. This allows for:
- Succession planning
- Asset segregation
- Enhanced privacy
Although it would be possible for a trust to hold title to a Cayman Islands flagged yacht directly (provided it met the requirements of a “qualified person” under the Merchant Shipping Act), it is more common for a trust to be established in combination with an SPV to create a layered structure that meets both operational and personal planning needs.
c) Foundation Companies
A newer option under Cayman Islands law, foundation companies combine features of trusts and companies. They are particularly useful for owners who want a governance framework without shareholders, and are increasingly popular for philanthropic or multi-generational ownership structures.
Conclusion
For yacht owners and advisors seeking a reputable, flexible, and efficient jurisdiction for superyacht registration, the Cayman Islands offers a compelling solution. With its globally respected flag, robust legal framework, and user-friendly structures, it continues to set the standard for excellence in the superyacht space.
If you are considering registering your yacht in the Cayman Islands or would like to explore structuring options using Cayman Islands SPVs, please do reach out to the Conyers team and we would be happy to discuss your requirements further.