Charter management in general

Charter management gives you the opportunity to purchase a boat (new or slightly used) with least possible investment and costs. Don’t mistake charter management program for money making investment opportunities – the idea is not to make money but to allow you to buy a yacht with little investment and charter income that should cover most of your leasing and boat maintenance costs.

Boating has turned into a big business over the past few years, especially in Croatia where the number of charter companies, chartered yachts and charter clients has multiplied since 2005 (from 324 to 780). Such growth is partially due to stricter regulations that marked the end of black charter market, but still, the striking growth is undeniable. Croatia has established itself as one of the most attractive charter grounds in the world and provides excellent opportunities for development of charter management.

HOW DOES IT WORK?

If you have no experience in the boating business, here is a small step-by-step guide to charter management.

1. Pick A Yacht
Once you have decided that you are going to buy a yacht, you have to choose which one. There is a huge choice of new and pre-used boats in the market, and you should take your time and carefully examine all pros and cons. When deciding upon a yacht, pay attention to what you need and want. Don’t be led by ideas of big profits – that is not charter management. Pick a boat that you want to own and that fits your needs and opportunities. We can give you some advice, but we can not decide for you.

2. Find A Yacht
When you have decided which yacht you want to buy, let our brokers help you find it. Regardless whether you want a new or pre-owned boat, our team will search the market and make you several offers.

3. Find A Leasing Company Or A Bank
Now, you have found the boat you want to buy. If you don’t have enough money in your account, you should contact banks or leasing companies for a loan. We can recommend you several respectable banks in Croatia, but you have to take care of the financing opportunities on your boat.

4. Registration
Once you have come to an agreement with the bank, you need to close the purchase deal with the boat owner. In order to transfer ownership of the boat to your name (or to register it for the first time if it is new boat) you need to be either a resident of Croatia, or to have a company registered in Croatia. If you want to charter your boat in Croatia, she must be registered to a company (not individual). This means you need to register a company in Croatia. The process of registering a company here is not complicated and it will cost you about 3,500.00 – 4,000.00 EUR.
If you want to give your boat to charter management, you must have a company under which she will be registered. We can not register her on our agency.

Charter management at Croatia Yacht Charter

At Croatia Yacht Charter we offer services of yacht maintenance and yacht booking as part of our program. You can pick one or both services, depending on your requirements. more

5. Buy The Boat And Acquire Necessary Licences
After registering a company, you close the deal with bank and the boat owner. Now the yacht is yours to be registered and insured. All yachts that are chartered must have:

navigational certificate
VHF certificate
concession licence
all-risk (kasko) insurance

6. Sign Contract With Charter Company
Once you have all the paperwork in order, we determine the charter conditions – split of charter income, obligations and rights of both sides, your private use of the boat… When we agree on the terms, we sign the contract and start chartering your boat.
For more information on charter management terms at Plavetnilo see here.

7. Legal requirements for performing the activity of chartering vessels in Croatia

RULEBOOK ON CONDITIONS FOR PERFORMING THE ACTIVITY OF CHARTERING VESSELS WITH OR WITHOUT CREW AND PROVIDING GUEST ACCOMMODATION SERVICES ON VESSELS

PART ONE

INTRODUCTORY PROVISIONS

Scope and Subject of Regulation

Article 1

This Rulebook establishes the conditions and procedures for performing the activity of chartering yachts or boats with or without crew (charter), including providing accommodation services for guests on yachts or boats (hereinafter referred to as “vessels”) within the internal waters and territorial sea of the Republic of Croatia.
The provisions of this Rulebook also apply to vessels rented to end-users in third countries insofar as navigation occurs within the Republic of Croatia.
The provisions of this Rulebook apply to vessels rented to end-users in EU Member States only when explicitly prescribed within this Rulebook.

Definitions of Terms

Article 2
For the purposes of this Rulebook, the terms listed below are defined as follows:

Vessel: A floating object classified as a yacht or boat under the Maritime Code, utilized for charter activities.
Charter activity: The rental of vessels or the provision of accommodation services on vessels within the internal waters and territorial sea of the Republic of Croatia, in accordance with special regulations governing nautical tourism services.
Vessel rental: The provision of a vessel to an end-user for recreational purposes, with or without crew, excluding accommodation services, for a pre-determined and publicly disclosed fee.
Accommodation services: The provision of a vessel to an end-user, with or without crew, for a specific period during which passengers stay overnight onboard, for a pre-determined and publicly disclosed fee.
Charter company: A natural or legal person who owns or operates a vessel or who, under a written agreement, has assumed responsibility for the vessel’s management, thereby undertaking obligations prescribed by this Rulebook and the applicable laws of the Republic of Croatia concerning navigation safety and marine environment protection.
Yacht with professional crew: A yacht provided exclusively with a professional crew engaged under an employment contract or similar agreement specifying the employment relationship, including working conditions, remuneration, and responsibilities.
Personal watercraft (PWC): A vessel less than 4 meters in length, equipped with an internal combustion engine and jet propulsion system, designed for individuals to sit, stand, or kneel on.
Third country: Any country that is neither the Republic of Croatia nor a Member State of the European Economic Area (EEA).
Recognized organization: An entity authorized under Regulation (EC) No. 391/2009 of the European Parliament and the Council to perform ship inspections and certifications.
Immediate family of the vessel owner: Includes spouses, common-law partners, direct relatives up to the second degree, collateral relatives up to the first degree, adoptive parents, and adopted children.
Vessel commander: The individual responsible for operating the vessel and ensuring its lawful and safe use.
Ministry: The ministry responsible for maritime affairs.
Minister: The minister in charge of the ministry responsible for maritime affairs.

PART TWO

CHARTER ACTIVITIES

CHAPTER I

VESSELS ELIGIBLE FOR CHARTER ACTIVITIES

Vessels

Article 3
Charter activities may be conducted using:

Vessels registered under the Croatian flag.
Vessels registered under the flag of an EEA Member State.
Vessels registered under the flag of a third country, provided they have obtained cabotage authorization.

Vessel Requirements

Article 4

A vessel specified in Article 3 of this Rulebook must satisfy the following conditions:
1. Be registered for commercial purposes in its flag state.
2. Meet the technical requirements for conducting charter activities in the Republic of Croatia.
3. Have the minimum number of crew members with appropriate qualifications.
4. Possess all valid certificates and logbooks in accordance with the regulations of its flag state.
5. Be covered by liability insurance for damages to third parties, including incidents within the internal waters and territorial sea of the Republic of Croatia.
In addition to the conditions specified in paragraph 1, vessels under the flag of a third country must obtain authorization for temporary importation with partial customs duty exemption or provide equivalent authorization issued by another EU Member State.
If the flag state does not require vessel registration or registration of commercial use, the requirements specified in paragraph 1 for Croatian-flagged vessels with similar technical characteristics will apply.

Technical Suitability for Charter Activities

Article 5

Vessels used to provide accommodation services must be constructed and equipped for multi-day accommodation of both passengers and crew.
Personal watercraft rented for charter must have a remote control system for starting and stopping propulsion systems.

Technical Inspections

Article 6

The technical suitability of vessels for charter activities within the Republic of Croatia is determined through technical inspections.
For foreign-flagged vessels, technical inspections must be conducted at intervals and cover the same scope as inspections for Croatian-flagged vessels of similar technical characteristics used for commercial purposes.
Technical inspections may be carried out by:
1. The maritime authority of the flag state.
2. A recognized organization authorized by the flag state.
3. The Ministry, the harbor master’s office, or a branch of the harbor master’s office for vessels up to 24 meters in hull length.
4. The Croatian Register of Shipping for vessels exceeding 24 meters in hull length.

Technical Suitability of Foreign-Flagged Vessels

Article 7

Foreign-flagged vessels must at minimum comply with equipment standards prescribed for Croatian-flagged vessels with similar technical characteristics and purposes.
If a foreign vessel’s documents do not specify its navigation area or if the designated navigation area does not correspond to Croatian regulations, the vessel must be equipped for navigation in the internal waters and territorial sea of the Republic of Croatia.

CHAPTER II

VESSEL CREW

Crew Requirements

Article 8
Vessels, except those described in Article 4, paragraph 3 of this Rulebook, must have the minimum number of appropriately qualified crew members required for safe navigation, in accordance with the regulations of the vessel’s flag state.

Crew Qualifications

Article 9

Crew members must hold valid certificates or other proof of their qualifications.
If a crew member holds a qualification certificate issued by a country other than the vessel’s flag state, the certificate must be recognized by the flag state.
Paragraph 2 does not apply to certificates issued under Croatian regulations governing the qualifications of vessel crew members.

Residence and Work Permits for Foreign Crew Members

Article 10
Foreign nationals serving as crew members on vessels described in Article 3 of this Rulebook must comply with the regulations governing the residence and employment of foreigners in the Republic of Croatia.

CHAPTER III

DUTIES OF CHARTER COMPANIES

Application for Database Access Rights

Article 11

Before commencing the chartering of vessels, a charter company must submit a written application to the Ministry for user access rights to the central database, which records all crew and passenger lists for vessels.
For vessels chartered to end-users in third countries, the commencement of chartering activities is deemed to occur upon the vessel’s first entry into a port open to international traffic in the Republic of Croatia.

General Obligations of Charter Companies

Article 12

A charter company must:
1. Have the necessary equipment for electronic submission of crew and passenger lists, including internet access and equipment for the use of advanced electronic signatures.
2. Submit crew and passenger lists to the Ministry’s central database before each voyage.
3. Operate a guest reception area owned, leased, or used under a concession.
4. Appoint at least one individual employed under a labor contract or similar agreement who is responsible for ensuring the technical condition of vessels, conducting handovers, and providing support to guests during navigation.
5. Conduct the handover of the vessel with the vessel’s commander.
6. Collect and remit tourist tax fees as prescribed by relevant regulations.
Points 3, 4, and 5 of paragraph 1 do not apply to charter companies providing accommodation services exclusively on yachts with professional crews.
Points 1, 2, and 6 of paragraph 1 do not apply to charter companies exclusively renting vessels without providing accommodation services.

Granting of Database Access Rights

Article 13

A charter company’s application for user access rights to the central database must include:
1. The name, address, and identification number (OIB) or VAT ID number of the charter company.
2. The names and contact details of responsible individuals, including those overseeing safety and database management.
3. A list of vessels (name or identification number) along with copies of registration documents or sailing permits and other proof of compliance with Article 4 of this Rulebook.
4. Information about the berthing location and guest reception area, including the charter base location.
5. The company’s email address and other contact details.
Each vessel may be used by only one charter company at a time.

Tax Identification Requirements for Non-EU Charter Companies

Article 14

Charter companies headquartered outside the EU must provide their Croatian Personal Identification Number (OIB) and VAT ID number issued by Croatian tax authorities when chartering vessels in Croatia or to third countries.
Such companies must also submit details of their tax representative in Croatia.

Tax Identification Requirements for EU-Based Charter Companies

Article 15

EU-based charter companies must provide their Croatian OIB and VAT ID number when chartering vessels in Croatia.
If the company exclusively charters vessels to end-users in third countries, it must submit a VAT ID number issued by the tax authority of its country of registration.
If the company has appointed a tax representative in Croatia, the representative’s details must be submitted to the Ministry.

Provision of Vessel Documentation

Article 16

Charter companies listed in the Croatian Yacht Register or Boat Registry as owners or operators of vessels are not required to submit registration documents.
For other Croatian-flagged vessels, companies must provide a notarized leasing or cooperation agreement with the vessel owner or operator, containing their OIB.
The agreement mentioned in paragraph 2 must be certified by a public notary.

Obligations for EEA-Flagged Vessels

Article 17

For vessels flagged in EEA Member States, charter companies must submit:
1. A technical inspection report indicating the date, scope, and results of the inspection, and the organization conducting it.
2. A notarized leasing or cooperation agreement with the OIB or VAT ID of the vessel owner or operator, if the charter company is not the owner.
3. Proof of payment for navigation safety fees.
The agreement described in paragraph 1, point 2, must be certified by the authority responsible for verifying signatures.

Obligations for Third-Country-Flagged Vessels

Article 18

For vessels flagged in third countries, charter companies must submit:
1. A technical inspection report as described in Article 6.
2. A notarized leasing or cooperation agreement with the vessel owner or operator, if the charter company is not the owner.
3. Proof of payment for navigation safety fees.
4. Authorization for temporary importation with partial customs duty exemption, or equivalent documents from an EU Member State.
5. A request for cabotage authorization.
The agreement mentioned in paragraph 1, point 2, must be certified by the authority responsible for verifying signatures.

Request for Additional Documentation

Article 19
If the submitted vessel documentation does not clearly demonstrate compliance with Article 4, the Ministry may request additional documentation, including statutory regulations of the vessel’s flag state.

Cabotage Authorization

Article 20

Charter activities may be conducted by third-country-flagged vessels only after obtaining cabotage authorization.
The Minister issues cabotage authorization for the calendar year and may limit its number to prevent market disruption.
In cases of significant market disruption, the Minister may impose a temporary three-month restriction on issuing authorizations.

Berths and Reception Areas

Article 21

A berth is the designated location where a vessel is chartered to the end-user within Croatia.
Berths may be:
1. In public ports open to general traffic.
2. In concession areas such as marinas or camps.
3. At micro-locations authorized by a concession approval.
Reception areas must facilitate vessel handovers and guest services.

CHAPTER IV

NAVIGATION IN THE REPUBLIC OF CROATIA

Navigation Without Cabotage Authorization

Article 27
A vessel registered under the flag of a third country, which has not obtained cabotage authorization, may navigate Croatian internal waters exclusively for the following purposes:

Entering a port open to international traffic, a nautical tourism port, or a shipyard where it will undergo repairs.
Departing from such a port.
Navigating between the aforementioned ports along the shortest customary route without stopping, provided the vessel is operated solely by professional crew.

Entry of Vessels Chartered in Third Countries

Article 28
The commander of a vessel chartered to an end-user in a third country, upon entering Croatian internal waters by sea, is required to:

Undergo border control.
Certify the crew and passenger list at the harbor master’s office or its branch office and submit a copy of the agreement with the end-user.

Entry of Vessels Chartered in EU Member States

Article 29
The commander of a vessel chartered to an end-user in an EU Member State, upon entering Croatian internal waters by sea, is required to:

Undergo border control.
Certify the crew and passenger list at the harbor master’s office or its branch office.
Present a copy of the agreement with the end-user or other documentation proving the charter arrangement.
Pay all prescribed fees in accordance with applicable regulations.

Prohibition of Navigation

Article 30

If, during border control, it is determined that a vessel or its commander does not comply with the conditions set out in this Rulebook or other applicable regulations of the Republic of Croatia, the vessel will be prohibited from navigating until the identified deficiencies are resolved.
If the deficiencies cannot be resolved within a reasonable period, the vessel will be ordered to leave Croatian internal waters and territorial sea.

Departure of Vessels from Croatia

Article 31

Before departing from Croatian internal waters, the commander of a vessel described in Article 28 must:
1. Undergo border control.
2. Certify the crew and passenger list at the harbor master’s office or its branch office.
3. Submit documentation showing the calculation of VAT obligations to the Croatian state budget.
The commander of a vessel described in Article 29, as well as vessels chartered within Croatia, must:
1. Undergo border control.
2. Certify the crew and passenger list at the harbor master’s office or its branch office.
Upon fulfilling the obligations outlined in paragraphs 1 and 2, the commander must exit Croatian internal waters and territorial sea by the shortest possible route.

Maritime Agent

Article 32
Charter companies may delegate activities related to foreign-flagged vessels to a legal or natural person registered in the Register of Maritime Agents of the Republic of Croatia.

CHAPTER V

DATA MANAGEMENT AND EXCHANGE

Notification of Data Changes

Article 33
Charter companies must promptly notify the Ministry of any changes to the data specified in Articles 13, 14, 15, and 32 of this Rulebook.

Data Availability and Exchange

Article 34

Data from the central database is accessible to charter companies for their respective vessels and to state authorities for all vessels across all charter companies.
The Ministry shall electronically submit the following data to the Tax Administration by the first day of each month for the preceding month:
1. Vessels chartered to end-users in third countries but operating within Croatia.
2. Vessels chartered to end-users in Croatia but departing to third countries.
The data provided includes:
1. The name, address, and identification number (OIB or VAT ID) of the charter company, vessel owner/operator, and tax representative.
2. Vessel name or identification number.
3. The flag state of the vessel.
4. Dates and ports of embarkation and disembarkation.
5. Contract value and currency.
6. Dates of entry into and exit from Croatian waters.
7. The next destination country and port.

PART THREE

TRANSITIONAL AND FINAL PROVISIONS

Transitional Provisions

Article 35

Charter companies offering accommodation services within Croatia at the time this Rulebook comes into force must comply with its provisions by December 31, 2017. They must submit data regarding their identification number (OIB or VAT ID) in accordance with Articles 14, 15, 16(2), and 17(1) of this Rulebook within 30 days of its effective date.
Cabotage authorizations issued under the previous regulation remain valid for the period for which they were issued.

Repeal of Previous Regulation

Article 36
Upon the entry into force of this Rulebook, the Rulebook on Conditions for Performing the Activity of Chartering Vessels with or without Crew and Providing Guest Accommodation Services on Vessels (Official Gazette No. 99/13) ceases to be valid.

Entry into Force

Article 37
This Rulebook shall be published in the Official Gazette and enters into force on May 1, 2017.

Class: 011-01/17-01/74
File No.: 530-03-2-17-1
Zagreb, April 25, 2017