Purchasing vessel in DR

[msdj69]

I posted this in another forum and I'm afraid it was in the wrong place. I'm trying again here to see if I can get a few responses...

I’m hopeful some of you experts can help me with some questions. I’m in the process of purchasing a sailboat in the Dominican Republic with a partner. We’ve both have owned several boats in the states and sailed all over the Caribbean but we have no ownership experience outside the US.

Our intention is to do some work on the vessel this spring and summer and move the boat to the BVI late fall. We’re paying cash for the boat, so no lien. She’s currently USCG documented and registered in a state. I have a quote for insurance to cover us in these areas.

We have no intentions of moving the boat back to the states. She will live in the DR and BVI as long as we own her.

So here are my questions:

Since we’re not bringing her to the states, do we need to maintain USCG documentation?

Do we need to register her in a state? We plan to own the vessel under an LLC, so that may weigh into it. If there’s a better route than an LLC, I’m open to it.

How do we handle taxes? Since we’re paying cash in a foreign country and not bringing her to the US, we’re just not sure how to handle taxes (if at all).

For long term storage in the DR and BVI, how do we deal with that? Do we need to register her in either or both countries? Neither of us plan to be down there for long periods of time so immigration isn’t an issue.

I’m sure I’ll have other questions but this is a good start.

And for the record, I’m not trying to avoid taxes or registrations. I just don’t want to do or pay more than necessary.

Thanks much for your time.

[hellosailor]

The LLC will have to register (flag) the boat *some*where. Normally that would be with the nation/state where the LLC was created, or with a flag of convenience that allows corporations to register vessels for various purposes, or with the venue where the boat is being kept--if that's allowed.

If the boat is not flagged in the country where it is being operated, obviously there are considerations as to how long a cruising/entry permit will be good for, and whether it becomes subject to local jurisdiction for taxes, etc. if it stays beyond a set period. You'd have to check the local laws in each country to look for any potential problems with that.

And of course, the boat is now subject more intimately to the jurisdiction and laws (safety equipment, boardings, etc.) of whatever place it is titled in.

If you "deregister" the boat from USCG documentation, you also need to make sure you maintain the chain of title, or you may have issues when it is finally sold.

[msdj69]

Originally Posted by hellosailor

The LLC will have to register (flag) the boat *some*where. Normally that would be with the nation/state where the LLC was created, or with a flag of convenience that allows corporations to register vessels for various purposes, or with the venue where the boat is being kept--if that's allowed.

If the boat is not flagged in the country where it is being operated, obviously there are considerations as to how long a cruising/entry permit will be good for, and whether it becomes subject to local jurisdiction for taxes, etc. if it stays beyond a set period. You'd have to check the local laws in each country to look for any potential problems with that.

And of course, the boat is now subject more intimately to the jurisdiction and laws (safety equipment, boardings, etc.) of whatever place it is titled in.

If you "deregister" the boat from USCG documentation, you also need to make sure you maintain the chain of title, or you may have issues when it is finally sold.

This is great information. It sounds like maintaining the USCG documentation and registering the vessel in the states may be the safest route --- especially if we own it under an LLC.

So if I register the vessel in the states and renew the USCG documentation, then the issue becomes: "What do I need to do to keep the vessel in the BVI full time?".

Still open to more expert knowledge from other folk.

[hellosailor]

"What do I need to do to keep the vessel in the BVI full time?".
As disreputable Colonials, you might not be able to. There is probably a limit as to how long you can visit, and a separate limit as to how long the boat can visit. If the BVI are following UK rules they may also deem the boat "imported" and pricey VAT due on it after 18 months or so. You'd have to check with them to be sure, bearing in mind that needs to be current information.

[AJ_n_Audrey]

If your decision is to keep USCG documentation, why not keep the boat in the USVI? Now that Irma and Maria have cleared 80+ boats out of Coral Bay, there should be moorings or anchorage available. And it's only about an eight mile sail from Coral Bay to Soper's Hole.

[sailon46]

I faced that decision when I purchased in 2013 my present boat in BVI. Then I kept her a while year’s worth in Tortola. Moved her a while to st Martin. Then to Guadeloupe then to Grenada . Bach to Guadeloupe then to curaçao and paid and paid kept the us flag USCG documentation kept the same port of call it was easier and now the boat resides happily in St. Croix usvi and I’m 35 miles from all the usvi BVI and Spanish VI. Keep her in the us side and avoid the kleptomaniacs of the BVI.
Ernie on the Mary Jane

[jmschmidt]

No need to state register a US documented boat if it doesn't spend time in a US state that requires state registration. Not all states do, just the greedy ones. In fact doing so may subject you to taxes in the state of registry that you otherwise wouldn't be required to pay. I have a US flagged (documented) boat in charter in the BVI, it's not state registered, hailing port is HONOLULU HI, it is owned by a Washington State LLC and has a temporary BVI Commercial Operator License that is renewed once a year ($600). Other countries have different rules. In Mexico, for example, you can get Temporary Import Permit for a US documented boat (no state registry required or desired) that is good for ten years and can be renewed every ten years indefinitely. If you want to use LLC ownership set up the LLC in the US (must have majority ownership by US citizens). Have the LLC buy the boat then record the the bill of sale with the US Coast Guard. Use only USCG documents from their website.

[msdj69]

Great information everyone. Thanks so much for passing along your knowledge.