Time Charter
A time charter is an arrangement in which the owner provides the vessel fully crewed and provisioned to the charterer for a defined period. The owner retains navigational control and responsibility for the crew, while the charterer directs the itinerary and pays an Advance Provisioning Allowance (APA) for running expenses. Time charters are the standard structure for commercial luxury superyacht charters.
Definition
Semantic definition
- Subject
- Time charter
- Predicate
- is a charter arrangement in which
- Object
- the owner provides a crewed and provisioned vessel, retains navigational control, and the charterer directs the itinerary and pays running expenses via an APA.
Time charter is a charter arrangement in which the owner provides a crewed and provisioned vessel, retains navigational control, and the charterer directs the itinerary and pays running expenses via an APA.
What is a Time Charter?
A time charter is a contract where the owner provides a crewed yacht to the charterer for a defined period while retaining possession, navigation, and technical control through the master and crew. The charterer directs the commercial use of the yacht within the agreed cruising area, but the master remains responsible for safety, navigation, weather decisions, crew discipline, and legal compliance. This is the standard model for luxury superyacht charters. The guest pays the charter fee and usually an Advance Provisioning Allowance, while the owner remains responsible for seaworthiness, certificates, insurance, crew employment, class, and regulatory compliance. A time charter is therefore a hospitality experience supported by a serious maritime contract.
MYBA Charter Agreement
The MYBA Charter Agreement is the standard superyacht time charter form used widely in the Mediterranean and beyond. It sets out the charter period, delivery and redelivery ports, cruising area, charter fee, APA, security deposit where used, cancellation terms, broker commission, preference list process, crew responsibilities, force majeure, and dispute provisions. It also recognises the captain's authority to refuse unsafe itinerary requests or alter plans for weather, safety, or legal reasons. For owners, the strength of the MYBA form is that it reflects common superyacht practice rather than generic shipping language. For charterers, it creates a familiar structure for payments, provisioning, guest preferences, and post-charter accounting. Custom clauses are common, but they should not undermine core safety and compliance obligations.
Charter Guarantee Deposit
A charter guarantee deposit is commonly paid when the agreement is signed to secure the booking. In the superyacht market, this is often around 50 percent of the charter fee, with the balance due before embarkation according to the payment schedule. The deposit gives the owner confidence to block the calendar, decline competing enquiries, position the yacht, and prepare crew and suppliers. It also protects the brokered transaction from casual holds that never convert. The agreement should state when the deposit becomes non-refundable, how cancellation scales apply, and what happens if the owner cannot deliver the yacht. It should also distinguish the charter fee deposit from APA, local taxes, delivery fees, and any security deposit for damage.
Broker Role and Commission
Charter brokers structure the transaction, negotiate the charter party, coordinate preference lists, manage communications, and help resolve issues before they become disputes. A central agent represents the yacht for charter marketing and availability, while a retail or sub-agent may represent the charterer. Standard commission is often discussed in the 15 to 20 percent range of the charter fee, split between central agent and sub-agent depending on the listing and agreement. The broker does not replace the owner, manager, captain, tax adviser, or lawyer, but a good broker keeps the commercial process orderly. Commission terms should be clear in the charter agreement and listing arrangement so the owner understands net revenue and the charterer understands who is involved.
VAT Treatment in EU Waters
VAT on yacht time charters in EU waters is jurisdiction-specific and changes with local interpretation, itinerary, place of supply, and the portion of use inside or outside EU waters. Greece, Italy, France, Spain, Croatia, the Ionian area, and the Dalmatian coast each require local analysis before a charter is sold. Some structures historically used non-EU legs or time outside EU territorial waters to reduce taxable use, but authorities increasingly expect evidence, correct invoicing, and local compliance. A charter that begins in one country and ends in another may need agents and tax registrations in more than one place. Owners and brokers should not quote net charter pricing without confirming VAT treatment, because tax mistakes can erase margin and expose the yacht to penalties.
Charter Permit Requirements
Most Mediterranean charter destinations require some form of local charter permit, cruising permit, commercial endorsement, tax registration, or agent filing before a yacht can legally embark guests. The requirement may depend on flag, length, GT, charter type, passenger count, port of embarkation, and itinerary. Greece, Croatia, Spain, Italy, France, and other coastal states each have their own procedures and documentary expectations. A permit delay can force itinerary changes even when the yacht's flag and class certificates are perfect. Charter planning should confirm permit feasibility before marketing a route, especially for short-notice charters, multiple-country itineraries, or yachts newly entering a season. The captain, manager, central agent, and local agent need one shared document checklist.
Frequently Asked Questions
Manage Time Charter with HelmOps
Purpose-built for yacht operations — offline-first, compliance-ready.
Track certificates, crew documents, and deadlines in one place
30-day free trial. No credit card required.
Start Free TrialRelated terms
Last updated: