The referendum in which Britain voted to withdraw from the European Union has plunged the yachting industry into uncertainty. Despite the large number of expert opinions on this issue, we still do not know what consequences this historic vote will have or how it will affect the superyacht market. Before discussing the importance of Brexit in the superyacht market, we must ask ourselves a number of burning questions. Boat International has learned from some of the leading players in the industry what these questions are.
Firstly, it is necessary to understand when Britain will leave the EU and how this will happen.
«It will be a difficult task for negotiators," says John Leonida, a partner at the international law firm Clyde & Co. - I don't think there will be a special negotiating team from the superyacht industry, although it might be worth organizing one, given the vast majority of Britons in superyacht sales and services in Europe»," said John Leonida, a partner in international law firm Clyde &.
How will Brexit affect the pound sterling rate?
One of the immediate consequences of the vote for Brexit was the fall in the value of the pound in the foreign exchange markets and there is reason to believe that the trend towards weakening the pound will continue, says director of Centtrip Jonathan Mealey.
«Markets hate uncertainty, and as long as there is no understanding of the timing of key events and their impact on trade, until all key political players formulate their position in light of current turmoil, the foreign exchange market will remain volatile».
The devaluation of the pound will strongly affect the UK superyacht industry. Costs for import-dependent manufacturers will rise, but companies whose products are actively exported will benefit from cheaper than imported household goods and services.
In the brokerage market, buyers with pound liquidity will find that prices for foreign yachts have risen. For example, Lurssen's Solandge, which is on sale for €169 million, is £14 million more expensive in real terms for buyers paying in British currency following a referendum.
But foreigners who want to buy a yacht from a British shipyard will only benefit from a weak pound. After Brexit, the £7.5 million Princess 98 Fly 2014 is now available for sale for over a million dollars for American buyers.
How will Brexit affect British flagged yachts?
One of the key issues in the Brexit negotiations was the freedom of movement of labour. Any restrictions imposed on the movement of Britons within the EU will have an impact on the superyacht industry. Will British flagged yachts and British crews working in the EU still be governed by European labour law?
Leonida notes that yachts flying the flag of the European Union have cabotage rights, which means they can participate in trade relations in EU waters. The departure of Britain from the EU could complicate the process of chartering yachts under the British flag in Europe, and more importantly, in the Mediterranean.
«The status of the English commercial flag, in all its iterations, is not clear," says Leonida. - It will be particularly interesting to see how Spain feels about yachts flying the flags of Gibraltar».
How easy will it be to do business across borders?
Another key issue is Customs. Will Britain still be a member of the EU Customs Union, or will it lose this advantage after Brexit and need to consider import and export duties?
There is an uncertain future for UK citizens doing business in the EU - from crews and brokers to lawyers, bankers and tax consultants.
The fate of insurers is also unclear. British insurance companies may do business in EU countries without obtaining additional permits. After Britain leaves the Union, they may have to establish branches to continue doing business in European countries.
How will Brexit affect the global reputation of Britain?
In his farewell speech, UK Prime Minister David Cameron stressed that Britain is a «big trading country whose engineering thought is respected around the world», and this is certainly true for the superyacht industry. However, Dickie Bannenberg, head of Bannenberg & Rowell's renowned boat design bureau, has a touch of concern:
«I think it's too early to talk about the consequences. In theory, we designers will not see much change after Brexit, except the obvious consequences of currency fluctuations. It is not known how the perception of the UK will change among clients, among European shipyards».
Howard Pridding, CEO of the superyacht and marine industry association British Marine, adds:
«We are currently studying all EU maritime laws and directives and will be working with our associations and other representative bodies such as the RYA (Royal Yacht Association) to ensure that the newly formed government's EU Relations division takes the industry's interests into account».