from Follow the Money

Floating Dubai’s

October 3, 2007

Blog Post
Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

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Apparently, simple yachts are not luxury goods.   John Taglibue of the New York Times on Tuesday

“Today a mega yacht is indispensable” said Olivier Milliex, head of yacht finance at the Dutch bank ING (Setser aside: what a job).  “It is not like 15 years ago, when a yacht was a luxury item.”

Silly me, I thought a spacious two bed room New York City apartment was a luxury item …

Somehow though, those who can afford to buy yachts -- including those with enough money to buy mega-yachts fitted out with their own min-helicopters and toy subs – don’t necessarily seem to think that they have enough money to be able to pay tax or contribute to the national social security systems of their crews. 

Mr Milliex apparently offers tax advice as well as yacht-financing:

“Some wealthy customers for instance prefer to take a mortgage for their yacht, taking advantage of low interest rates, rather than tying up cash in a yacht purchase.    Others need advice on creating a corporate entity to buy their yacht rather than purchase it directly to save on taxes, or on registering their boat in a foreign country to pay lower Social Security contributions for crew members.”

Turns out the Cayman Islands are a full service shop for the very-well-to-do.   The Times business section – seeking to offer news billionaires can use – notes that the Caymans are the current venue of choice for yacht owners seeking a “registration of convenience” to skimp on taxes of all sorts.

It isn't all that hard to see why globalization – at least in its current form – might have a bit of an image problem in the US and Europe.  “Offshore” yacht-size sure seems to be growing faster than “onshore” median real wages …

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