Even though this may start out as a rant on how hard done we are, it is really not. I am taking one businesses view of how these new port charges relate to our business and by the end, you will actually see that I am standing up for the government to a degree. I have to give the background to explain our position and how it comes about. I apologize to anyone this is going to offend in advance, save me having to do it afterwards!
You, who just read to see the fishies in the BVI will have no need to read any further today. It will bore you to tears!
This is just our interpretation as things stand today. Here in the BVI things can change daily, or hourly and tomorrow or the next meeting we will have new ideas to talk and and bat back and forth. First, a few background facts as pertain to being a large BVI Flagged Vessel who has been in charter here a long time. These figures are all off the top of my head, so don't blast me when I am out. I did not take the time to go through the books and add up, but after ten years I have a pretty good idea of what they are.
When we started doing charters here ten years ago, to own a BVI licensed vessel that was based here, as we were not English or BVLander, we had to set up a local company to purchase the yacht.
To set ourselves up a BVI company, incorporate it, get a trade license and work permits cost at a minimun 20,000.
We have to pay our company agent every year to keep our corporation up to date and file the appropriate papers. That is a minimum of $750.00 a year.
We have to have an accountant do our year end books and submit, so that is $1500.00 a year.
There was a time when you did not pay a yearly customs charge to the government, now it goes along with our trade license and costs us $825.00 a year
There has always been a $2.00 per person per day for BVI based boats for charters and ,75 cents in summer. We have done a average of 24 charters a year, with an average of 8-9 guests, this comes out to somewhere between $2000.00 and $3000.00 depending on the year.
We started out paying $400.00 a year for a National Parks Permit. Then it went to $600.00 and then it went to $825.00.
We pay a figure (somewhere between .50 cents and $25.00, we have never been able to figure out exactly what it was) every time we brought our own BVI registered boat BACK to its home country. It always seems to me it was like paying money every time you wanted to enter Canada to come in the doors. I suppose we go in and out of the country an average amount of times, maybe 8 times a year with shopping trips to St thomas etc. So, about $200.00 a year lets say.
We pay a yearly license to have our VHF radio, and for each person on our crew to have a certificate, which is about a $150.00 a year all up.
A few years ago, the government tossed out the entire corporation act for local businesses as it was unfair making the local companies pay business tax when the foreign companies did not have to. That was something the International Finance Community insisted on. We were ecstastic, only to find out that the corporate losses you have in the first years starting up your business and then could be applied against profits were going to be tossed out the window at just about the time we could have used them and we were given a payroll tax which got around this little problem of us being taxed differently. No, we received NO type of credit for our losses we had to carry forward.
We pay social security at 8.5%, (between employee and employer) PAYE (income tax) anywhere up to 8.5% of payroll on an employee. We must pay work permit costs every year for each employee, including ourselves as we are employees of our company. This can be up to $1500.00 per employee and more depending on tings"
Then, the government decided that not only would we have to pay a minimum amount, for an employee. IE if you brought in a captain, and you were paying them $1400.00 a month, the government/Labor said, "well you cannot have a captain for less then $1750.00 a month" and that is what we paid fees on!
Then, as a director, at the end of the year when you were doing your books, and they thought that you had made more profit then you should have (ha) you had a chance to "voluntarily" top up the amount of income you declared for owners, and pay the appropriate social security and payroll tax. ( No corporate tax now remember? Anything that came to the shareholders is potentially money that would not be taxed...)
Our accountant each year, "suggests" an amount that we should "top up" our salary to, as even if we have not made any money, they could be suspicious that you were not really serious.
Up until this point, over ten years, you have about $140,000 or so in taxes and fees, that we paid to operate in the BVI without putting in the employee income tax and social security costs.
We as BVI Based boats complained loudly that we were being taxed to death, where boats from outside the country although they could only do 7 pick ups a year in the BVI, could pick up as many times as they liked elsewhere and come in and cruise the BVI waters. The only "advantage" we saw that we had over those from outside the country was we paid $2.00 a day per person for cruising taxes and not $4.00! Certainly not enough to offset a lot of the other costs we had going on to operate in the BVI fully. Remember everything we brought into the country we paid duty on at 15-20% and we had no Cost U less here!
There were certain marinas that we complained forever and loudly about, down to showing them on paper that it was not technically possible for us to be using the amount of electricity that they were charging us for as per their readings. After being charged a ridiculous amount of water for a couple years in marina we find out that there pumps were measured in LITRES not gallons, and yep, we knew we were paying way too much for water, but they were quite suprised to find out that they were charging everyone 4 x the price!
How about putting expensive diesel in your boat and knowing exactly how many gallons your diesel tanks hold and somehow, when empty, you ended up paying for 10-20% more diesel then your tank would physically hold? Then when telling them to check their gauges, we would be told over and over again, that they did and they are fine.
Many of us local boats watched in dismay as more and more boats were let into the country to operate making the playing field so unlevel it was laughable. Yes, there are always loopholes, depends who you are and who you know!
Now next add onto this that the BVI was wanting to upgrade its marine registry, so we now had a Ports Authority. We were going to have to get locally inspected and licensed to continue to operate here in the BVI. We all trooped in to convert our Yachtmaster Licenses into local BVI licenses, and, yeah, did I mention, pay a yearly fee on this and get a physical every time you have to renew it?
Now go through the Inspection process on the boat, which initially meant A LOT of upgrading. We were all putting on life rafts willy nilly, rings, jackets, buckets, sealing off the engine room, new automatic fire extinguishing systems in the engine room, life lines, flares, horms, Oh I could go on, but all this for going across to Peter Island! In fact before we put liferafts on we were told that it was "illegal" for us to go to Anegada!
At first there was a grandfather clause that allowed some of these requirements to pass if you had been operating safely in the BVI for a certain number of years. Then they dried up. All the BVI large charter boats, trooped in to pay a surveyor to tell them what they needed to do to upgrade to pass. Then paid for the items, the inspection, and the licenses.
Then they put a yearly haul out requirement on this license. Great, with us only hauling every two to three years, this added another $5000.00 onto the yearly bill. Only one place on a railway that we could be hauled. very expensive to haul like that. Then once the only place in the BVI closed that was large enough to haul our boat, we had to pay a surveyor to come over to where we hauled, St Thomas or Puerto Rico or in some cases DOminician Republic, for the really large boats, to "certify" us for this license. Of course they started with the visible BVI boats on this. Working there way slowly down to the bareboats.
They then added on the hardship of not only making everyone on the boat have STCW 95, at a cost of $800.00 every couple years AND not only could we not hire anyone in the territory already, before we could even submit a work permit application for them they had to have a STCW certificate, so not only did we go months without an employee while waiting for work permits, we had to pay quite a bit of money for the potential crew member to get their STCW In advance of showing up for a time! Of course, they could not come into the territory and do it while they were waiting for work permit to come through or anything (but yes, depending on who you were, they seemed to be able to have some leeway there, this was not the case with us!)
Next thing they put on us was when we went to "Renew" our captains licenses, there were new hurdles to jump. We now needed to "sit" a local examination with Ports Authority on the SCV Code (Small Commercial Vessels) for the Caribbean. This was an oral exam, without it, you could not renew your license. Some captains took 4-5 tries to get this right. I, being a female and not really giving a damn about what the proper procedure was to anchor a barge ( drop both anchors to maximum chain) or, for an engineers tickets on a 50 ton vessel, talking about a fire scavenge area, (don't know what that is?? Well apparently you would not pass your 50 t either, it is the motor exhaust area on vessels over about 500 ft!,) we just wanted to continue our same route we had been doing around the BVI for the last ten years. Anyways, I quickly decided to drop my captains license locally, let my husband deal with that!
Then, because we were on the "edge" of NEEDING a engineer on board, my husband had to sit that test as well. The first one to pass that in the BVI, and I am not too sure how many have passed it yet, as it was a hard exam.
Everytime you think you have reached the goal post, they move it. You go in to renew anything with trepidation, as you are not sure what they will come up with next. You are almost so exhausted from jumping through the legal hoops on land that you are too exhausted to do actual charters. Remember that grandfather clause? Well, that gets moved as well, The next time they wanted a stability test on Promenade. Now, Promenade has operated here for almost thirty years. It is a one off, as wide almost as she is long, and the first boat that Nigel Irens ever designed (he is a famous racing trimaran designer now) but how many stability booklets do you think there are around on our yacht? Hmmm, yes. Getting a surveyor to do a stability booklet on something other then a production boat, means taking a billion measurments and crunch a ton of numbers and jumping through many hoops of thousand of dollars, thousands of dollars of man hours to have it done. Tack on another ten thousand to "prove" that this yacht that would not lift an ama in a gale, needs 130 knots under bare poles before it starts lifting an ama.... We are not sailing around with guests in the Sir Francis Drake Channel too many times in those conditions! Don't know about some of you bareboaters I see,! You may be!!
In retrospect, I think that we balked at a lot of these changes, as truthfully, most of us ran away to the Caribbean to get away from rules. BUT, I think that a lot of the changes that Captain Pat and Dave Smith have put through ARE good in that department over the years. At least we are getting to the point that any person who had just sailed a windsurfer once could not just be a "captain" of a charter boat the next day. I think there is still some out there though!
I stopped adding but believe me, we are around three hundred thousand now over the ten years. And a lot of this while we watched the boats that did not base here and did not have to live by these work permit rules hire anyone they wanted to in St Thomas and come over the next day to do charters. And we watched the boats from St Vincent and the Grenadines flag sit here and NOT go through any of this licensing hoopla. We were glad when they made the USVI crewed charter boats start doing some of this, which is a doubling of our yearly expenses just in taxes and fees in average, just to be BVI registered and licensed.
Oh did I mention when the new "clamping down" on fishing regulations happened we now pay a fee to be either a commercial fishing boat or a recreational fishing boat so our guests can fish off the boat of another additonal 3-7 hundred dollars?
Which is rather a rant and a preamble to get to the new marine ports authority charges in the BVI. Yes, every cruiser and every day boat from the USVI along with every charter boat will hate them. Funny thing is, you are going to say that I am always so pessimistic that I will rant and rave about hating them, but in MY position, looking at if from OUR BVI businesses point of view, we are glad to see something that will cost us only $60.00 on top of the clearing fees we already pay when we come into the country. Yes, we are an exempt boat, we fall under the exempt category in two areas. BUT being an exempt boat means we will still pay $1.00 per foot for each time we come into the territory. It is definitely a new meaning of "exempt" but they are circling the wagons and closing some of the loops. They are actually very crafty.
That is why I have said that this is only going to be our interpertation of the rules and what we think they mean. It could be different tomorrow.
1) If you are a BVI Registered boat. By this I mean if you fly the BVI flag on the back of your boat AND you have this SCV license current and up to date on your COMMERCIAL vessel you will be exempt.
2) If you have a BVI trade license, and pay the yearly fees to customs of $825.00 AND also an above SCV license you will be exempt.
3) If a BV lander owns 51% of the shares of your boat, AND you have a base marina you operate from in the BVI or a mooring that you pay a yearly fee on, you will be exempt.
Remember that exempt still means you pay the first day.
If you have chartered a bareboat out of the USVI and come up to cruise the BVI. You are not exempt.
If you are a cruiser, you are not exempt.
If you are a day sailer, a diver boat, or anything that comes in and out from the USVI you are not exempt.
If you pick up your charter boat IN the BVI and do not leave the territory, you will not have to pay it (unless of course, the bareboat you charter is owned by someone who does meet the above critiera, then somewhere along the way, today, tomorrow, next year, you are going to pay it one way or another, as they will have to. I do not know the structure of all the bareboat companies and private boats here. I am sure everyone and their dog is scrambling.
Will this level the field somewhat, YES, as long as there are NOT too many loopholes that everybody who has a friend can get through! Does it make it very expensive to cruise in the BVi ? Yes it does. What else will this do? Well, if you want to go into a charter boat business here and you contract out with a local who owns a marina and you either give him 51% of your boat to make it work, or however you make the deal with him you can be exempt.
How is it clever? It will make it too expensive for many boats who work in this area NOT to be BVI flagged! Which means that the BVI gets MONEY! AND if you are not BVLander or English, you have to set up a LOCAL company to OWN the boat. That then gives them the company fees I talked about above.
Then if you get a trade license (not likely by yourself as a foreigner without a local partner, or grabbing someones that already has one) you are paying money into the coffers of the government even more with work permits, social security, yada yada.
Then when you go to get your boat licensed commercially, if you are doing commercial charters, there is more money. Circling the wagons, closing the gaps and clever, quite clever. Will it be beneficial to the country with this economy ? Who knows. I think they have already shown their intentions to throw their hat firmly in the ring with the cruise lines. I blogged about this a month or so ago when it was announced, if the airplanes are pulling out of your country and you can't get people here on planes, hey, the cruise ships will find a way to get them here! Oil or no oil. They could be much smarter then the rest of us.
To be gosh darn honest, the amount of boats that are doing charter here has been astonishing. I have mentioned before that we get less for a charter now then we did ten years ago, and these figures have not even taken into account the increase in costs of provisioning. Thank god we also do not have to pay any engineering fees here to service the boat. Believe me, most yachts who do crewed charters, without being owner operators are run at a loss. And that is ok with many!
I know that we are seriously looking at ways that we can continue to thrive in this changing world we find ourselves in now. I think you will see drastic measures all over the place. I will of course, continue to keep you informed of what we know and our point of view, but please remember, it is our point of view only on the information that we have available.
