Thailand’s Charter Rules Changing
Stringent government regulations have posed a barrier for foreign-flagged charter growth in Thailand. However, as governments across ASEAN countries continue to explore the benefits of yacht chartering at the economic front, yacht chartering in Thailand could witness substantial growth.
Gordon Fernandes, co-founder of Asia Pacific Superyachts explains where the Charter Rules stand now and why the need for changes, as reported in Part III of a 4-part Asia – a world of possibility written by MaryAnne Edwards for Ocean Magazine.
While the Thai Minister of Transport granted a foreign superyacht a ‘charter licence’ in 2016 to give a sense of purpose to the newly launched Thailand Yacht Show, Thailand’s own Revenue Department (tax office) still requires the owner to import their yacht into Thailand first – and pay tax on its total value.
The article points out this is clearly a non-starter and has completely negated any benefits of obtaining the ‘licence’ in the first place. The key now is to persuade the Revenue Department that it would be better to allow yachts to come in and charter, and then just collect taxes on the charter revenue. They would already be automatically collecting tax on all the yacht’s spend on fuel, provisions, excursions, refit and repair etc, amounting to hundreds of millions of dollars.
Fernandes, reporting from the APS office in Phuket, states, “I am a firm believer that relaxation of the charter rules is essential. Not being able to charter simply here in Thailand is a massive barrier to growth in the industry and to a growth in ownership”.
“Charter is critical for Thailand and the rest of Asia as it provides the introduction to the superyacht lifestyle. Moreover, the more boats that are owned by Asians, the more the ability to charter will lead to more people loving the lifestyle a boat provides. Many people in Asia disliked the rocking and rolling of a boat, but technology has changed considerably over the years and zero speed stabilisers have added to the enjoyment of boating and WiFi capabilities have meant people can stay connected and work from their boats. There is a growing demand for charter in the region. Opening up Thailand to charter would create much-needed jobs. We are already seeing far more Thais being employed in the industry compared to five years ago.”
Marinas are playing an increasingly important role globally and in South East Asia. Phuket marinas are ready for the rules to change and can handle all the needs of a superyacht. Berths in the resort island are available for yachts up to 130M’s in length at any one of Phuket’s many fully equipped marinas. Fernandes notes that it’s the combination of a growing superyacht labor force, along with excellent docking facilities, wonderful tourist attractions and nearby island cruising that makes Thailand a complete package. Superyacht visits are increasing exponentially and over the past 15 years approximately 1,500 yachts and cruisers visited the ‘Pearl of the Andaman’ annually.
“On the eastern side of the country, the Gulf of Thailand and Koh Samui are also seeing more superyachts visit each year”, adds Captain Charlie Dwyer, a co-founder of Asia Pacific Superyachts and based on Koh Samui.“Cruising stunning islands and waters of the eastern area of Thailand prior to the pandemic were a stunning group of superyachts: the 61.42-metre M/y White Rabbit with support superyacht M/y Charley; 98-metre M/y Aviva; and 60.1-metre M/y Paraffin. Changes in Thailand’s Charter Rules will have a huge impact on vessels like these, interested in exploring the natural splendor of Thailand and South East Asia, away from the hustle & bustle of the Med and Caribbean.”
“Stringent government regulations pose a barrier for growth in the region”, adds Capt. Charlie, “However, as governments in Thailand and across the ASEAN countries continue to explore the benefits of yacht chartering at the economic front, the yacht chartering market in the region will witness substantial growth”.