Glossary
Flag of Registry
Definition: A flag of registry is the state in which a vessel is registered. While at sea, the flag determines which state's law applies, which inspection regime the vessel follows, and which tax it pays.
What the flag affects
- Legal regime — Turkish Commercial Code, Marshall Maritime Act, etc.
- Tax position — VAT, corporate tax, charter income regime
- Crewing rules — nationality requirements, social security
- Mortgage law — where and how a mortgage is perfected
- Inspection frequency — port state control profile
Typical flags in the yacht segment
- Open registries: Marshall Islands, Cayman Islands, BVI
- EU registries: Malta
- Local registries: Turkish flag (including TUGS)
Re-flag
An owner can change the vessel's flag after purchase. Process: application to new registry → deletion from old → re-registration. If a mortgage exists: re-perfection is planned first, then deletion.