Starting a Private BVI Charter Company

[captstu]

Wendy is correct on several points. Departing and Returning to the US is roughly 2 days faster than a similar trip from BVI. Two less cabs and one less ferry and fair less tight connections.

True, you have to clear in/out of the BVIs, bus such clearance at Yost is easy, not terribly expensive, and is a good first stop on land.

You can depart Compass Point (several marinas lots of slips), stop at Christmas Cove for a short snorkel, and still make Jost on the first full day.

If you get a season or year's license for the boat in the BVIs, clearance in takes about an hour and involves only the skipper.

Clearance to the US is much more complicated, but there are various ways to pre-clear that might work for a non-profit -- takes some work to find outl.

I would not even think of a mooring - provisions, servicing, and boarding your guests is a logistical nightmare. Compass Point is right near the food center so your problems would be minimized - and it is near repair services that would probably help you establish a relationship to keep your boat running.

Are you contemplating a full time skipper - or hiring one for each trip? For a boat this size, a skipper/chef-crew pays for themselves in reduced maintenance costs. Be careful, they can make or break your deal.

[Mithril Bham]

I established a charter company in the BVI and it was more involved than you might think unless things have changed.
It helped to have a "Belonger" as a partner.
I established a corporation in the BVI with a local attorney.
I set up an account at First Caribbean.
I also aquired a work permit.
Took a lot of time and a few bucks.
There are also additional licenses required. Can't remember what they call them.
Seems like leaving on mooring ball is a bad idea.
You might be better off working with The Moorings or Sunsail.
Good luck.

[contrail]

Here's how it basically works for "crewed" yachts, which yours would almost certainly be.

You don't need to flag in the BVI. I flag in the US, for example. There are advantages to each. If you are not flagged in the BVI, you don't need to create a BVI company. You do, however, need a BVI trade license. Mine costs me $500 per year, but it takes some time to get, and you can be refused. You can also work under the Trade License of a "Clearing House", otherwise known as a Central Agent, although your business plan might not interest any of them. If the boat is BVI based, anyone who works on the boat, in any capacity (and don't try to get around this} will need a work permit, no matter what country them come from, if they aren't BVIslanders. UK citizens get no break. If you are not BVI based, you don't need a Trade License, nor work permits. Either way you will need a Commercial Recreational license, which, for your boat, will cost you $801 per annum. In the past month, however, the cruising permit fees for everyone have skyrocketed. For a BVI based boat, the per person/perday fee has gone up from a high season max of $2, to $6, no matter what season. For a non-BVI based boat, it has gone up from a high season max of $4, per person/per day to $16, year round! So, if you have eight passengers for a week, that's 7 days x 8 passengers x $16, which totals about $900 for the week! No joke and it restores some of the advantages of being BVI based. If you are non-BVI based, you can start a maximum of 7 charters, per annum, in the BVI, but you can come in with an unlimited number of charters where the guests are picked up elsewhere, such as St. Thomas.

Your captain has to have a BVI boatmaster's license, which can be granted reciprocally with the appropriate USCG Master's license (not a six pac license) as well as all the additional internationally required training, such as STCW. Same thing applies if you have an RYA license. The chef needs a BVI foodhandlers license which is very easy to get, as well as STCW.

The boat will need to be MCA compliant. Oddly, if a boat that would be a six pac boat in the US, is certified for 7 to 12 passengers in the BVI, there is now a waiver that allows it to operate with the same number of passengers in the USVI, even if the boat never works in the BVI!!! It's a Jones Act exemption and means a BVI boat can pick up more than six persons in the USVI, but it also can apply to a boat doing day charters in the USVI! I wonder if The Donald knows that for a US boat to be exempt from the six pac limit in the USVI, it has to be so certified by the BVI?

I could go on and on with the details of the legalities in the BVI, where I live and work, and not even touch on any IRS issues, which you need to look into.

I would echo someone else's comment that the place for you to start regarding the BVI regulations is the Charter Yacht Society (CYS of BVI). You will get a more accurate and precise answer there than from the government officials. The CYS is the non-profit advocate for the crewed yacht industry and they do a terrific job....if you become BVI based you will want to be a member. The phone number is 284 494 6017. Speak to Janet Oliver, the Executive Director, who has been at this for over 20 years. She is a Canadian who has lived in the BVI for 30 years. Listen carefully and take her advice.

No one does 40 charters a year. Hurricane Season, maintenance time and turn-around time puts a brake on things. 30 weeks of charter is huge and only a very few boats do that. Some bareboats do more and it shows.

The mooring balls, anchored by sand screws, are very well maintained and rated for boats up to 60 or 65 feet. They would handle your boat just fine. Very few crewed yachts use them or have permanent slips. Usually, they are at anchor when off charter and then they come alongside for prep and pick ups and drop offs, and those alongside days run well in excess of $100 per day, including electricity and water. You will need to figure out something for hurricane season, as well, because you will want a hurricane slip, or a haul out, or go to another location like Grenada.

Your maintenance estimate is several times too low for many many reasons. Same thing for cleaning.

I could go on but I am getting tired! Hope this helps and best of luck in what sounds like a well intentioned venture.

Cheers,
Tim

[Mithril Bham]

Originally Posted by contrail

Here's how it basically works for "crewed" yachts, which yours would almost certainly be.

You don't need to flag in the BVI. I flag in the US, for example. There are advantages to each. If you are not flagged in the BVI, you don't need to create a BVI company. You do, however, need a BVI trade license. Mine costs me $500 per year, but it takes some time to get, and you can be refused. You can also work under the Trade License of a "Clearing House", otherwise known as a Central Agent, although your business plan might not interest any of them. If the boat is BVI based, anyone who works on the boat, in any capacity (and don't try to get around this} will need a work permit, no matter what country them come from, if they aren't BVIslanders. UK citizens get no break. If you are not BVI based, you don't need a Trade License, nor work permits. Either way you will need a Commercial Recreational license, which, for your boat, will cost you $801 per annum. In the past month, however, the cruising permit fees for everyone have skyrocketed. For a BVI based boat, the per person/perday fee has gone up from a high season max of $2, to $6, no matter what season. For a non-BVI based boat, it has gone up from a high season max of $4, per person/per day to $16, year round! So, if you have eight passengers for a week, that's 7 days x 8 passengers x $16, which totals about $900 for the week! No joke and it restores some of the advantages of being BVI based. If you are non-BVI based, you can start a maximum of 7 charters, per annum, in the BVI, but you can come in with an unlimited number of charters where the guests are picked up elsewhere, such as St. Thomas.

Your captain has to have a BVI boatmaster's license, which can be granted reciprocally with the appropriate USCG Master's license (not a six pac license) as well as all the additional internationally required training, such as STCW. Same thing applies if you have an RYA license. The chef needs a BVI foodhandlers license which is very easy to get, as well as STCW.

The boat will need to be MCA compliant. Oddly, if a boat that would be a six pac boat in the US, is certified for 7 to 12 passengers in the BVI, there is now a waiver that allows it to operate with the same number of passengers in the USVI, even if the boat never works in the BVI!!! It's a Jones Act exemption and means a BVI boat can pick up more than six persons in the USVI, but it also can apply to a boat doing day charters in the USVI! I wonder if The Donald knows that for a US boat to be exempt from the six pac limit in the USVI, it has to be so certified by the BVI?

I could go on and on with the details of the legalities in the BVI, where I live and work, and not even touch on any IRS issues, which you need to look into.

I would echo someone else's comment that the place for you to start regarding the BVI regulations is the Charter Yacht Society (CYS of BVI). You will get a more accurate and precise answer there than from the government officials. The CYS is the non-profit advocate for the crewed yacht industry and they do a terrific job....if you become BVI based you will want to be a member. The phone number is 284 494 6017. Speak to Janet Oliver, the Executive Director, who has been at this for over 20 years. She is a Canadian who has lived in the BVI for 30 years. Listen carefully and take her advice.

No one does 40 charters a year. Hurricane Season, maintenance time and turn-around time puts a brake on things. 30 weeks of charter is huge and only a very few boats do that. Some bareboats do more and it shows.

The mooring balls, anchored by sand screws, are very well maintained and rated for boats up to 60 or 65 feet. They would handle your boat just fine. Very few crewed yachts use them or have permanent slips. Usually, they are at anchor when off charter and then they come alongside for prep and pick ups and drop offs, and those alongside days run well in excess of $100 per day, including electricity and water. You will need to figure out something for hurricane season, as well, because you will want a hurricane slip, or a haul out, or go to another location like Grenada.

Your maintenance estimate is several times too low for many many reasons. Same thing for cleaning.

I could go on but I am getting tired! Hope this helps and best of luck in what sounds like a well intentioned venture.

Cheers,
Tim

Realistic

[Jeff Skelley]

There is only ONE WAY to work a charter in the BVI's. You must partner with a "Belonger," a local who already possesses a charter license and go on their license. Otherwise they will just take your money and you will wait for YEARS and still wind up with NOTHING. My partner was a good friend who took nothing from me to add me to his "stable." You may have to share a small amount of your profits but could gain priceless amenities like dockage, reduced yard rates etc. Pick your partner carefully and everyone will profit. You might try to contact my partner if he's still in business...Haven't contacted him myself in about ten years, he will know EVERYTHING about how to do all this. He added me on in a week! His info: Johnny Hassan, Johnny's Maritime Services, Nanny Cay, Tortola Office: 284-494-3661 Home:494-2330. There are several local lawyer "experts" that will claim to obtain a license for you and will be happy to take your money and you will be strung along FOREVER. Belongers are the only ones that can get licenses....PERIOD.

[captainjay]

I'll rattle off my questions in order.

1) If everything moves forward, we'll probably buy a new or close to new 5 cabin Lagoon 52. I'm estimating a $1.3M purchase with a 25% down payment and a 7 year mortgage. Does that sound about right?

This is in the ballpark.

2) The next thing I need to know is the cost to register the boat and where to register. I was thinking of setting up a local company in the BVIs. I don't have any plans to bring the boat stateside. All transactions and income would happen there, so that seems to make sense. But this is new territory, so if anyone has any wisdom on that, I'm all ears. Also, what do I need to budget annually for boat registration, taxes, etc.? I know there are no taxes in the BVI's but if I have state side liabilities, I want to make sure they're covered.

If you do it in the BVI's you will need a trade license registration work permits etc. Not terribly expensive but will cost and be an aggravation. You also will have to pay national park fees and cruising fees for every charter.
These numbers are not insignificant. $8 a person per week for the cruising fee for a BVI based boat and $16 per person USVI based. $70 for the park per week.

As someone pointed out on another thread, I also need to know what work permits are required. As a US Citizen, would it make more sense to register in the USVI and just operate in BVI when needed?

You can do it St Thomas based for less up front. The customs fees to visit the bvi's will be higher. But you won't need work permits.

3) I've estimated 2% for insurance ($26k annually)
This is about right.

4k for cleaning ($200 after each charter)
Not even close probably more like $400 to $500 per week.

$5k per year for scheduled maintenance for the first three years since the boat will be new or nearly so, then $6k for years 4&5, $7k for years 6 and 7. Do these numbers seem reasonable?

Not even close. Annual haul and bottom paint, hurricane storage, keeping up the systems you could double this number and probably still not be right.

4) Dockage. Here's where things get nebulous. I'm planning on keeping the boat on a mooring ball most of the time with a few day rates when we're island hopping on the charters. In the interest of planning for worst case, I took a $35 day rate and multiplied by 365 for a total of $12,775 per year. What are some real world numbers for long term mooring / dockage?

You will need to add in crew salaries or caretaker for this. Add in the hurricane storage listed above. A boat that size at Spanish Town for three months will add another 7 t 10 K to your budget.

5) Fuel. What can I plan on spending on fuel each month or year? I sail a Jeanneau 409 out of Marina Del Rey and the fuel costs are pretty minimal. But I know a cat has two of everything and I don't have a good feel for how much motoring we would be doing in a typical week of island hopping.

With the gen air conditioning etc. $300 a week.

6) What am I missing?

Wear and tear. Upgrades, surprises and accidents. Any or all of these will raise your costs of operation. Interior upholstery, cockpit cushions, sail bag, sails, dinghy. None of these will last seven years of charter. The genset will likely die or be near death at the end of seven years.

For disclosure purposes I am part of the management team for a bare boat company that runs 20 plus boats in St Thomas.