Q: How much will it cost me to have a seafearer’s standard bank account?
A: While many yacht crew financial solutions providers require a set up fee to open an account, there are some that don’t. With Standard Bank and Horizons, for example, if you maintain a small (and sensible) minimum balance of around 2,500 euros in the account then there are no ongoing maintenance fees either. (Of course, there are various transactional costs which are detailed on our website.) If you need to make international currency transfers to another bank account however we highly recommend using a foreign exchange company as you will benefit from better exchange rates and no fees.
Q: Should I expect to have health and travel insurance covered while I am working on board?
A: Yes, especially if you are on a charter vessel. The Maritime Labour Convention, 2006 (MLC) has minimum standards of healthcare provision for all crewmembers and this currently is being enforced for all charter yachts. On the whole, most private yachts provide health insurance too. It is worth checking the breadth of cover to see if travel is included and to check that you are insured 24/7, 365 days a year.
Q: What is the best way to transfer my money between my two different currency bank accounts?
A: Always use a currency broker to do this. The rate is always better with no commissions and fees. In addition, brokers offer other currency-based products to help you maximise your rate or protect yourself against future movements.
Q: What should I budget for monthly spending money?
A: No more than 50 per cent of your income. If you have no debts then you should be able to save at least 50 per cent of your income for short- and long-term goals.
‘Offshore’ banking is not what it once was – a place to store money confidentially away from the tax man. Those days are gone.
Q: Why should I open an offshore bank account?
A: The principle reason to open an international bank account is now currency. ‘Offshore’ banking is not what it once was – a place to store money confidentially away from the tax man. Those days are gone as new regulations to fight tax fraud and terrorism have led to reporting transparency between most offshore centres and most major tax jurisdictions. You should have a bank account in the same currency as your income – this is now the main reason for yacht crew to open international accounts.
Q: What is the best way to save money while I have a career in yachting?
A: You should think in ‘pots. Have a certain amount of money in each pot (they don’t have to be physically different accounts, though it might help). Have an emergency pot (at least three months’ income), a pot for your education and courses, a pot for your medium-term savings (say, for a property deposit) and a long-term pot for funding life after yachting.
Q: What taxes will I have to pay once I become a resident and am no longer in yachting?
A: This completely depends where you become resident. It is important to understand the different residency rules of the countries you would like to live in and then see if they apply to you. You may then need assistance from lawyers or accountants to set up in that country. Remember that you may also enter the social security system if you have earnings based in that country, so understanding the implications of this is important. Normally, once you are resident in a country you will pay income tax on your global income, capital gains tax on any global asset sales, inheritance tax on your assets on death and possibly wealth tax on the total value of your global assets.
Q: What is the best type of investment for yacht crew?
A: There is a huge amount of choice. Yacht crew are very busy for much of the year so having professional managers of your financial affairs is probably the best route to choose; select an investment solution aligned with the timescale you will be investing over – but ensure there is daily liquidity and that the risk of the underlying investment is appropriate to your own risk appetite.
You can find a detailed interview with Cosette Cutrara, advising crew how to spend their money depending on whether they’re brand new to the industry or considering leaving, in issue 74 of The Crew Report.