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Old 14-04-2014, 06:51   #16
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Re: Buying in the Islands

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I know how complex it is...
I'm a Canadian citizen and the boat will never come in Canada...
The boat will be bought in the States or the Caribbean...outfitted in the States and from there sail slowly to Australia. The whole trip will take about 5-6 years....
We purchased our boat in Panama.... first hurdle to was to get the boat properly surveyed, we shared a surveyor flown in from the BVI with another boat under contract at the marina.
Second hurdle was to establish clear "believable" title to the boat, I hired a US documentation "Titling" firm who specialized in this as recommended by our buying broker.
The next steps were not hurdles but just decisions to be made, we flagged and documented our boat as Canada but for reasons of taxes (big! - 13% hst and 9% duty because it is a French built boat) it will never set foot into Canadian waters which is a bummer!
When we left Panama and sailed northward I was on pins and needles waiting for a Panama patrol boat or some Gov tax collectors to show up at the dock with some sale tax demands (I had researched this to the contrary but you never know down there...)...nothing happened...
When in US waters we have been using a Cruising Permit to avoid any taxes or other nonsense... so far no issues
This has been our experience.

Bob
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Old 14-04-2014, 18:46   #17
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Re: Buying in the Islands

Thanks Bob! Your info is well noted and appreciated
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Old 14-04-2014, 19:05   #18
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Re: Buying in the Islands

I bought/sold in the caribe. The deal was done by a document person in Florida. The trade technically took place in the VI's. The physical possession was taken elsewhere.
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Old 14-04-2014, 19:52   #19
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Re: Buying in the Islands

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I bought/sold in the caribe. The deal was done by a document person in Florida. The trade technically took place in the VI's. The physical possession was taken elsewhere.
Martin,
This is pretty much how it goes. What you want to avoid is import tax right? So, it costs about $5000 to start up a foreign registered company and have them buy the boat. You of course own all the shares. You also need a resident agent for the corporation in the country you will flag it. Usually it's BVI, Anguilla (not so much but possible), Cayman Islands, or Antigua. Most of the old British Territories. Caymans and BVI's are the most popular.

It costs between $1000 and $1400 to have the registered agent do the very minor paperwork for the corporation every year. It's a racket. So, if your going to have the boat for X years, figure out how much it's going to cost in the end.

For me, import and sales taxes in the US would have been a little less then $40k. So I still am way ahead by flagging in the BVI's. Besides, having your home port Road Harbour is pretty cool.

There are also document handlers for the transaction. They make sure all the required doc's are filed so you actually own the boat after making the payment. That cost about $2500. I used Saxton out of Florida. My resident agent is Pensum in the Caymans but with a "local" office in the BVI's.

If given the option and you want to save some money, if the boat you are buying is already owned by a foreign corporation and it is the only asset of that corp, just buy the shares. You then skip a whole level of BS. If you want to change the name of the corp to match your boat name it's an easy process. This is what I should have done but didn't feel comfortable about it at the time and the Corp was from the Marshall Islands.
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Old 14-04-2014, 20:16   #20
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Re: Buying in the Islands

Good advise Palaran...We'll be looking into it for sure...
Thanks
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Old 14-04-2014, 22:24   #21
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Re: Buying in the Islands

Wait.. but all of that advise is for an American Citizen that purchased a boat and "MAY" bring it to American waters..

If you are a Canadian, and have no intention of ever bringing the boat to Canada, then you don't need to do all that. You can flag the boat in Canada and simply never "Import" it (bring it to Canadian waters). In that case, you are never charged any Canadian taxes..
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Old 15-04-2014, 04:51   #22
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Re: Buying in the Islands

I don't know how it works in Canada. In the US you can choose Deleware and avoid sales tax, which is the bulk of the expense. But my understanding is that if you leave the boat in Florida for over a certain period of time, they will charge you the balance of what you paid in Delaware and what Florida's tax is. So it becomes a pain also.

I'm surprised that Canada will register the boat without making you pay sales tax. Import tax is 2 or 3% but sales tax here is 6 to 8%.
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Old 15-04-2014, 05:30   #23
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Re: Buying in the Islands

That is thankfully the Canadian way regarding flagging/registering but a very prohibitive "kick in the @$%#'s approach to applying their tax "cut" of the deal for most people and a purchase of any significant amt.
Are you sure you cannot flag/document a vessel US and not pay any taxes if it doesn't enter US waters?

Bob
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Old 15-04-2014, 06:14   #24
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Re: Buying in the Islands

Yes you can but the costs are similar to those of the BVI's. You still need a registered office in Delaware and file tax returns every year. If you bring the boat to the US, you have to pay import duty and if you stay outside of Delaware for too long in the US you have to pay that States sales tax.

If you do a flag of convenience you avoid much of that. There are draw backs like having your vessel movements tracked. But it would be the same for a Canadian boat in the US.
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Old 15-04-2014, 06:16   #25
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Quote:
Originally Posted by Palarran
I don't know how it works in Canada. In the US you can choose Deleware and avoid sales tax, which is the bulk of the expense. But my understanding is that if you leave the boat in Florida for over a certain period of time, they will charge you the balance of what you paid in Delaware and what Florida's tax is. So it becomes a pain also. I'm surprised that Canada will register the boat without making you pay sales tax. Import tax is 2 or 3% but sales tax here is 6 to 8%.
It is true though, taxes and duty are only due if the boat touches the Canadian border and you are a resident of Canada. This applies any Canadian or foreign registered vessels that are owned by Canadians or corporations owned by Canadians. NAFTA boats are exempt from the 9.6% duty and the duty on EU boats will be transitioned out over a few years.
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Old 15-04-2014, 06:22   #26
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Re: Buying in the Islands

My second boat was ''Viewed'' in Florida, then sailed to N.C. where it was ''purchased'' and registered at registration cost only. I guess there are many ways to do this...The more feedback from all of you the better
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Old 15-04-2014, 06:24   #27
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Re: Buying in the Islands

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and the duty on EU boats will be transitioned out over a few years.
What is your understanding of this?

Bob
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Old 15-04-2014, 06:26   #28
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Re: Buying in the Islands

I know of friends who have their boats moored across the border in Lake Champlain to avoid bringing them into Canada and paying taxes. One guy got a special permit, not sure what it was, but he brought it in for repairs without having to pay any taxes...
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Old 15-04-2014, 06:32   #29
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Re: Buying in the Islands

Martin, why wouldn't you just register your boat in Canada? Seems like a no brainer.
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Old 15-04-2014, 06:52   #30
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Re: Buying in the Islands

Palarran,
I don't really care where the boat is registered. It makes no difference to me what soever. What is the most important to me is that I can save money and that the paperwork is proper and will not be a problem when entering the many different countries we plan on visiting. Is the citizenship of the owner(captain) of a foreign registered vessel a problem for customs officers.
Basically, can I buy the boat in a tax free(or less) country, register it there and then go cruising with it. My plans are not to have the boat in one specific area for very long. Except in Hurricane/Cyclone seasons which will be around six months if I'm in that specific area at that time...
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