Ian Harris, Phoenix Yacht Management: Steering Through the UAE Yacht Market

The increase in premium boat ownership in the region is propelling substantial expansion in ultra-luxury marine infrastructure. Ian Harris, founder of Phoenix boat Management in Dubai, offers insights into the developing UAE yachting landscape.

Ian Harris is CEO and Founder of Dubai-based Phoenix Yacht Management

The yachting sector in the Middle East has undergone swift expansion during the past ten years. A growing quantity of yachts is situated in the area, with a projection of 175 superyachts above 30 meters anticipated to visit the region at least once by the conclusion of 2024, as per a 2023 market analysis by Gulf Superyachts.

Ten years ago, Middle Eastern clients favored chartering boats ranging from 40 to 80 meters.

There is an increasing inclination to construct their own vessels and retain them within the region. Government agencies are proactively facilitating this transition by swiftly constructing ultra-luxury marine infrastructure throughout the Middle East.

This expansion has increased the demand for premier yacht management firms that provide exceptional operational services, technical maintenance, and onboard care, while also possessing a comprehensive understanding of the region's distinctive market dynamics, regulatory framework, and cultural nuances.

The warm environment occasionally poses issues and necessitates particular maintenance and operational measures to guarantee yachts remain in optimal condition. This include the utilization of sophisticated air-conditioning and seawater cooling systems, along with compliance to maintenance schedules customized for the local environment.

Consequently, management companies actively include these factors into their operations, guaranteeing that boats comply with local legislation and are tailored to the region's specific requirements.

The luxury boat market in the Middle East, propelled by consumers desiring exclusivity, necessitates an elevated degree of seclusion and customized service. Certain clients may favor culturally attuned management that adheres to specific traditions, necessitating staff training in the comprehension of distinct customs and etiquette.

In contexts where there is a pronounced inclination towards family-centric activities, these experiences may necessitate accommodation for extensive, multi-generational assemblies.

Yacht management firms have evolved by ensuring that crew members possess not just expertise in luxury service but also cultural awareness, enabling them to provide customized experiences that cater to the distinct requirements of clients from other cultures in the region. This encompasses all aspects, including food requirements like halal catering, as well as the organization of private, culturally suitable entertainment and activities.

Ian Harris, founder and CEO of Phoenix Yacht Management, alongside Managing Director Yousuf Al Hashimi during the Monaco Yacht Show.

The legal and regulatory framework governing yacht activities in the Middle East is complex, exhibiting considerable disparities both between countries and among the various emirates within the UAE.

In this context, the UAE enacted a new marine law, Federal Decree-Law No. 43 of

2023, effective from March 2024. It superseded prior maritime legislation, resolving several concerns and ambiguities that have developed over time. Article 18 permits charterers of foreign-registered vessels to seek UAE registration and display the UAE flag, contingent upon a charter length of no less than six months and fulfillment of all registration criteria.

Article 19 allows proprietors of UAE-registered vessels to request authorization to display a foreign flag when leasing the vessel without equipment. This legislation implements extensive improvements to vessel registration and precautionary arrest protocols, enhancing clarity, broadening eligibility, and conforming to international norms. These modifications are anticipated to optimize maritime operations and create a more resilient legal framework for maritime activities in the UAE.

Re-registration may serve as a strategic initiative; nonetheless, it necessitates meticulous planning and a comprehensive comprehension of local legislation. In the realm of yacht charter operations in the Middle East, adherence to local regulations is essential for guaranteeing safe and lawful activities.

Yacht management businesses must establish explicit policies and training to guarantee that all crew members and visitors comprehend and comply with these restrictions, especially when traversing countries where rules may differ markedly. This method preserves respect for local traditions while guaranteeing that all onboard activities are legal.

Oman, a growing locale for yacht charters, poses distinct regulatory challenges. Foreign yachts entering Omani waters must secure a cruising permission, necessitating meticulous preparation and compliance with stringent environmental laws, especially in ecologically sensitive regions such as the Musandam Peninsula.

The legislative system of Oman, shaped by Islamic law, impacts multiple facets of yacht operations, including aboard behavior and the activities endorsed in a charter itinerary.

The taxation framework introduces an additional layer of intricacy. In the UAE, a five percent value-added tax (VAT) may be applicable to yacht charters, contingent upon the particulars of the service and location. This tax must be precisely computed and reported to evade fines.

Although Oman lacks a VAT system, several fees and levies pertain to charter operations, necessitating meticulous monitoring. Yacht management businesses are essential for securing requisite permits and licenses, maintaining compliance with local and federal rules, and training crews to adhere to the cultural and legal standards specific to each nation or emirate.

By adeptly addressing these problems, they guarantee that yacht charters in the Middle East provide not just a smooth and legally compliant vacation but also one infused with the region's culture, exquisite cuisine, and distinctive adventures.