In continental Europe, particularly in France, Italy, and Malta, leasing is a dominant form of securing yacht ownership. It is not just a method of finance, it is a structural solution that has historically offered significant VAT advantages and flexibility for owners navigating EU waters.
Silver Oak Capital specialises in arranging marine lease structures for our clients. We work with major French and Italian leasing banks to provide this product to clients purchasing vessels in the Mediterranean, offering a seamless alternative to a traditional marine mortgage.
Unlike a mortgage where you own the boat and the bank has a charge over it, in a marine lease, the bank buys the boat.
A marine lease is like a mortgage in that the economics resemble principal plus interest over time, however, legally it is a lease until the end.
The leasing company buys the yacht and leases it to you for a fixed term while you pay regular rentals that cover its cost plus a return. At the end, you typically have the right to buy the yacht for a pre-agreed option price/balloon, so it functions like “paying it down” over time.
You’re essentially renting the yacht for an agreed period and then returning it, rather than aiming to own it. The lessor takes most of the residual value risk (what it’s worth at the end), and you pay for the use of the yacht under defined operating and maintenance conditions.
For a yacht under construction, the lessor funds the shipyard in stages as build milestones are achieved, mirroring the shipbuilding contract’s payment schedule. Your lease payments may start immediately or from delivery, but the key feature is that funding is released progressively as the yacht is built and verified.
If you plan to keep your boat permanently in EU waters (e.g., berthed in Antibes or Porto Cervo), a leasing scheme is often the most legally robust way to own the vessel. It demonstrates clear VAT compliance, as the bank (the owner) ensures all tax matters are handled correctly during the lease term.
Leases can often be transferred. If you sell the boat mid-lease, the new buyer can sometimes take over the leasing arrangement (subject to bank approval). This can make a pre-owned yacht more attractive to buyers looking for ready-made finance.
Historically, marine leasing offered VAT reductions based on “time spent outside EU waters.” While rules changed in 2020 creating a stricter environment, leasing remains a powerful tool for VAT deferral and cash flow management. The VAT is payable on the monthly rentals rather than in one lump sum upfront.
We have direct relationships with the specialist marine divisions of major European banks. We speak their language and handle the application process, ensuring your KYC and financial documents meet their specific compliance standards.
We advise on the interplay between the lease and the flag. For example, a French Lease usually requires the vessel to be commercial or pleasure registered in a way that aligns with French maritime law. We ensure your ownership structure doesn’t conflict with your cruising plans.
If you already own a yacht outright but want to release equity, we can structure a Sale-and-Leaseback. You sell the vessel to the bank, they release the cash to you, and you immediately lease it back. This releases capital while allowing you to retain full use of the vessel.
Ownership. With a mortgage, you are the legal owner from day one. With a lease, the bank is the legal owner until you pay the final option fee. Leasing is often preferred in France/Italy for VAT simplicity, whilst mortgages are preferred in the UK/US for title simplicity.
Yes, but it can be complex. Banks calculate a “termination value” based on the amortisation table. Unlike a mortgage where you just pay the balance, a lease termination involves buying the asset from the bank ahead of schedule. We negotiate terms upfront to ensure exit penalties are minimised.
Yes, but it requires bank permission. Commercial leasing is possible and can allow you to reclaim VAT on running costs. However, the lease contract must be specifically drafted for “Commercial Use” rather than “Private Pleasure Use.” Silver Oak Capital has deep access to lenders who permit mixed-use.