In Turkey, the shipbuilding industry, especially in yacht building, is developing day by day. Turkey has managed to achieve a peak in yacht building in recent years, leaving behind the effects of the pandemic. In Antalya in 2023, a record was set with 93 luxury yachts worth a total of 150 million USD being launched into the sea. Alongside Turkey, the Netherlands, Italy, and Germany are also among the leaders in the building of superyachts and megayachts.

Building a ship or a typical private or commercial yacht is extremely costly. Consequently, customers who enter into contracts with shipyards generally secure their financing through bank credits. Payments are sometimes made in installments during the construction phases, whether or not a credit is obtained. However, in all cases, both the bank and the customer want to protect themselves legally. This is because depending on the shipyard’s financial situation, the vessel may not be completed on time, or the shipyard may even go bankrupt. From a different perspective, for the bank is the vessel being constructed holds significant economic value as bank credits guarantee.

Under Turkish law vessels (such as ships, catamarans, commercial yachts, superyachts, etc.) that have not yet acquired legal status as “ship” can be registered to a special official registry (“Newbuilding Registry”) and have mortgages established on them. Specific provisions for this are laid out in the Turkish Commercial Code numbered 6102.

According to Article 986 of the Turkish Commercial Code, a ship/yacht under construction in Turkey can be registered in special register for vessels under construction, upon the request of the owner. Typically, until delivery of the vessel, the shipyard is considered the owner, but parties to the shipbuilding contract may designate the customer as the owner. Therefore, registration in the name of a Turkish shipyard owner or a foreign customer (real person or company) for a vessel or yacht under construction is possible under Turkish law.

In Turkish law, it is permissible to establish a mortgage even during the construction phase on a ship or yacht that will be larger than 18 GRT (Gross Registered Tons) when completed and upon which the keel has been laid. In this context, the ship or yacht under construction is first registered in the aforementioned special register, and subsequently, a mortgage agreement is made and registered the mortgage in the  register. Thus, the Turkish shipyard or foreign customer appearing as the owner in the register obtains the necessary security.

For example, in the case of a superyacht being constructed for a foreign customer in Antalya, registration in the name of the Turkish shipyard owner is possible. In such a scenario, the foreign customer may hold a mortgage over the yacht. The  degree of the mortgage is determined based on the agreement between the parties. Alternatively, registration in the name of the foreign customer as the owner of the yacht is also possible. In this scenario, the foreign customer gains the ability to grant a mortgage to third parties, such as a bank from which financing is sought. If the vessel is completed and delivered, and if it will be registered in a Turkish registry such as the Turkish International Ship Registry, the mortgage can be transferred to the ship’s main registry. Otherwise, it is impossible to deregistration the vessel from the special registry without the acceptance of the mortgage holders.