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Old 13-12-2015, 23:26   #16
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Re: Advantages to US Citizens of Registering Offshore ?

Great answer.

If you're still curious about this, at Nomad Capitalist we did an article on why someone would be interested in flying an offshore flag and which countries would actually be good options.

Originally Posted by capt_douglas View Post
The virtue of foreign registration is either financial or safety as far as I can determine.

If you're buying a million dollar boat and the tax is 7% then looking for a nation state that allows you to register the vessel for $500/year makes financial sense even to me. There are legal fees and transfer requirements as well. It makes no sense as an American, but it's not my boat.

I don't know what you paid for your vessel (congrats by the way) but if you take the tax and divide it by $500-1000 you'll get and idea of when the cost of foreign registration exceeds the cost of US sales tax (and there are places in the US where you pay no sales tax). You can document your vessel, and if you meet certain requirements based on where the vessel is purchased, can avoid the sales tax. You might have to leave the US for a certain period of time or be allowed back in the US for a limited time but if you're sailing off into the sunset, that might not be a problem either.

VESSEL DOCUMENTATION: New Changes to an Old Service | Boat/US Magazine | Find Articles at BNET

USCG National Vessel Documentation Center, Home Page

EU VAT can be very expensive but there are ways to cruise the EU without paying the VAT. You can register your vessel in a non-EU country but if that country joins the EU (Croatia comes to mind as does Turkey), then things get interesting.

You've saved a few dollars by going offshore but if you come to the US then you're a foreign flagged vessel and the rules become very tough and onerous.

Pleasure Boat Reporting Requirements -

The safety issue has to do with the guys in the black hats seeing the US flag and deciding you're an easy or wealthy mark. That's why a number of boats have foreign documentation. The owner thinks that by flying the flag of some innocuous country they'll be safer.

The other safety issue is that some nation states have relaxed safety requirements. It may not apply to you but if country A has no safety gear requirements, doesn't that set off warning bells? While these safety requirements generally apply to commercial vessels (and vessels in US waters must have the equivalent safety items on board) you're going to carry them anyway.

The final safety concern is what happens if your boat or those aboard come into distress. Do you think a country with no Navy, Coast Guard, Rescue Service, or Lifeguard Service is going to come to your aid? Yes, you'll probably get the USCG or other nations states where they take the protection of those who live, boat, or transit their waters seriously to come and pluck you out of your predicament.

You act American, talk American, have American beliefs, and carry an American Passport; why wouldn't you fly the American Flag?

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Old 15-12-2015, 03:26   #17
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Re: Advantages to US Citizens of Registering Offshore ?

If you get into multimillion dollar boats, there are some tax advantages. For a typical cruiser, not so much.

It won't provide any benefit regarding EU VAT. That is about how long the boat stays in the Schengen and your residency status. The boats flag really doesn't matter.

Short of committing tax evasion (ie: illegal activity), it won't get you out of inheritance taxes or anything similar. Reality is if you take more than $10k out of the country, you are legally required to report it. Assuming you don't take a suitcase full of cash, your bank will report it for you. If they catch you with a suit case full of cash and you don't report it, expect them to hold the money while you prove you weren't doing something illegal.

It's also pretty limited in terms of providing limited liability assuming the only reason you set up the corporation was to hold the boat and not to run an actual business.

The idea they won't figure out you are an American if you just fly a different flag is just silly.

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