What now for the Red Ensign?

The UK’s decision to turn its back on Europe will have wide-ranging implications for the owners of Red Ensign superyachts — but any possible disadvantages will be firmly outweighed by exciting new benefits.

- Georgina Howorth 

IF ASKED TO define 2016 using two new words, the top contenders would have to be Brexit and Trumpism, neither of which was in common usage a year earlier. Yet both are likely to have a profound effect on the superyacht business in the years to come. As the UK faces its upcoming divorce from the European Union, there are some key questions that are naturally being asked. Specifically, what is the Isle of Man’s future in a post Brexit world? Will the British Red Ensign become a clear foreign flag? Will it continue to have the right to operate commercially in EU waters? Will the Red Ensign become a more or a less attractive flag for the industry? And lastly how will Brexit affect the superyacht professionals?

Yacht owners in Italy, France and Spain have a love affair with the Red Ensign. Their local registration requirements have not found favour with many owners and they have embraced the UK flag in droves. They view it as a prestigious ensign that offers them a great deal of protection. So is the Red Ensign just another flag of convenience or could Brexit become the biggest boost the flag has ever seen?

Brexit could, however, leave the Isle of Man floundering and unable to attract or retain superyacht registrations.

A similar fate, though for different reasons, is likely to befall Gibraltar which currently suffers from the same EU driven constraints as the UK.

All three flags are likely to lose their access to EU VAT common customs agreements.