Yacht and Pleasure Boat Lawyer in France: Purchase, Sale, Tax and Disputes

Yacht and pleasure boat lawyer in France: purchase, sale, tax and disputes

The short answer

• A vessel is not an ordinary chattel: it is registered, it can carry a maritime mortgage enforceable against a buyer, and it carries a VAT history that follows it for its entire life.
• VAT is the main financial risk on a second-hand purchase: a vessel whose VAT was never properly accounted for exposes the buyer, not only the seller, and the proof of status must be examined before signing.
• Exclusion of warranty clauses are not equal: between private parties such a clause is in principle valid unless the seller knew of the defect, while against a professional seller it is deemed unwritten.
• Hidden defects: the buyer has two years from discovery of the defect to bring an action under article 1648 of the French Civil Code, and the quality of the initial survey shapes everything that follows.
• Corporate ownership: article 39, 4 of the French Tax Code treats pleasure craft as non-deductible luxury expenditure, with a narrow exception for a vessel genuinely operated as part of the company's business.
• Arrest: a vessel can be arrested in a French port within days to secure a maritime claim, and getting an arrest lifted is equally a matter of days rather than months.

We act on yacht and pleasure boat matters for buyers, sellers, owners and lenders, in France and abroad. A significant part of this work is done for clients established in Switzerland, the United Kingdom, the Gulf and the United States, in English, by video conference, with the French formalities coordinated from Paris.

The difficulty of this field is that it is not one field. A single acquisition engages contract law (warranties, conditions precedent, escrow of the price), maritime law (registration, flag, mortgage), tax law (VAT, the status of the vessel, ownership through a company) and sometimes customs law (importation, temporary admission). A adviser who sees only one of those four sees only one quarter of the risk, and it is precisely at the junction of the four that disputes arise.

What we do

Acquisition and sale

Reviewing a purchase project before signature: the documentary position of the vessel, its VAT status, any maritime mortgage, the declared casualty history, the broker's mandate, the draft memorandum of agreement and its conditions precedent. Then the transaction itself: drafting or reviewing the deed of sale, organising escrow of the price, the transfer and registration formalities, and coordination through to closing. Cross-border sales add VAT, customs and flag questions that must be sequenced in the right order, a point developed in our guide on selling a yacht from France to a buyer outside the EU.

Finance and tax

Reviewing and negotiating a finance lease before signature, including the clauses that depart from ordinary hire law and the VAT undertakings that shift the tax risk onto the lessee. Securing the VAT position of a vessel and building the evidence file that supports it. Advising on ownership structures, flag and the French annual duty, and on the deductibility question examined in our note on owning a yacht through a company in France.

Disputes

Hidden defects and non-conformity, for claimants and for defendants. Disputes with a shipyard over construction or refit, and with a broker over the duty to advise. Arrest of a vessel to secure a claim, and applications to release a vessel that has been immobilised. These matters are urgent and technical, and the first two weeks usually decide the rest.

What we see in practice

In the files we handle, the same three things go wrong. The price is released before the formalities are complete, so the buyer is left negotiating for documents he has already paid for. The VAT position is taken from the seller's assurance rather than from a document, and the question resurfaces years later on resale or at a customs check. And the survey is commissioned in a hurry, by one party alone, at a moment when the vessel has already been moved or partly repaired, which weakens it precisely when it matters. None of these is a legal subtlety. They are sequencing failures, and they are avoidable at a cost that is a fraction of the price of the vessel.

How we work

Remote by default. Most of this work is done by video conference and secure document exchange, with slots arranged around your time zone. Your presence in France is not required for the analysis, the negotiation or the formalities.

In English, on French law. The deeds, the registration formalities and the tax filings are French-language documents. We draft them, and we advise and report in English.

Fees agreed before the work starts. The preliminary review of a project or a dispute is a fixed fee, communicated before any engagement. Later stages are fixed or quoted according to the value of the vessel and the complexity. No fee arrangement carries any promise as to the outcome of a file.

Contact

Whether you are about to sign, have just discovered a defect, or need a vessel released, the useful first step is a short call to identify what is time-barred, what is still open and what must be preserved. You can reach the firm at 34 Avenue des Champs-Élysées, Paris.

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This page was written by Guillaume Leclerc, avocat at the Paris Bar, 34 Avenue des Champs-Élysées, Paris. Practice covering yacht and pleasure boat transactions, financing, tax and disputes, working in French and English, with files handled remotely for clients in France, Switzerland and abroad.

Typical engagements and indicative budgets

These are ranges observed on comparable matters, not a price list. Fees are agreed in writing before any work starts, and no arrangement carries any promise as to the outcome.

• Preliminary review of a purchase or sale project: documentary audit of the vessel (VAT position, registration, mortgage, declared casualties), review of the draft agreement or broker's mandate, risks and plan of action.
  • Budget: fixed fee, agreed in advance.
• Full transaction work: drafting or reviewing the deed of sale and its conditions precedent, escrow of the price, pre-closing checks, transfer and registration formalities, coordination to closing.
  • Budget: fixed fee according to value and complexity.
• Cross-border purchase or sale: coordination of VAT (intra-Community supplies, exportation, customer established outside the EU), customs and change of flag.
  • Budget: on quotation.
• Finance lease review and negotiation: derogating clauses, VAT undertakings and reporting obligations, warranty and early termination clauses, before signature.
  • Budget: fixed fee.
• Securing the VAT position of a vessel: applicable regime, evidence file, and the deductibility analysis where the vessel is held through a company.
  • Budget: on quotation.
• Hidden defect or non-conformity claim: survey, formal notice, negotiation, then proceedings if required, for claimants and defendants.
  • Budget: fixed fee per phase.
• Arrest of a vessel, or release of an arrested vessel: urgent work, handled in days.
  • Budget: on quotation, emergency instruction possible.