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Old 29-09-2015, 21:00   #1
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Flag: USA or AUS?

What are the pros and cons of flagging a boat in Australia vs USA?

If seen a few similar threads on this forum, however, I think our situation is different enough to start another.

We recently bought a Lagoon 440 in Croatia (VAT not paid) and have moved it to Montenegro where it's parked.

We've returned home to Melbourne, Australia until we can rejoin the boat next year and continue cruising the Med.

The admiral has her Australian passport and I have both Australian and UK passports.

The boat is currently registered in Delaware until the end of 2015 and I'm trying to decide between extending it for three more years or putting it on the Australian register (the previous owner had it registered in St Vincent and the Grenadines).

We're only deciding between AUS and USA.

Cost wise, USA is cheaper: an ongoing US$50 per year vs a one off AU$1200. Even if Delaware increases the annual fee, it'll be many years before the break-even point (and I'll have sold it by then).

It's unlikely that we'll ever sail back to Oz but we might visit US waters in a few years.

So, beyond the registration cost, what else do I need to consider?

I'll be buying an AIS transceiver and an EPIRB so I'll have to change the current MMSI - which country is easier/cheaper to deal with?

How do the countries compare with respect to ship's station radio licensing - amount of red tape/cost?

Are Australian flags looked on more favourably by European border staff than US flags? Are other cruisers more likely to invite you for sundowners if you're flying "Old Glory"?

If the proverbial hits the fan, which embassy would be better to have on our side? (I guess we already have UK and Australia - would the USA be good to include as well?)

Cheers,

Bryan.
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Old 29-09-2015, 21:16   #2
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Re: Flag: USA or AUS?

Off at a tangent right off the bat.....

If it was me ( you say you also have UK citizenship) I would be going with UK registry. Edited bit...like you I have both UK and Oz.

Mine has been on the full UK register since birth ( I'm her 3rd owner ) and has no UK VAT paid. I send them ( the registry) a small sum of money every five years...and there is no on going radio licence fee.
She was imported into and stayed in Australia for about 8 years with no change of flag.

I have a UK MMSI...

Easier to buy a Cat 2 than a Cat 3 epirb in the EU.....

Works for me.......
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Old 29-09-2015, 21:36   #3
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Re: Flag: USA or AUS?

No problems with tangents.

My understanding with UK registry was that you had to be a UK resident (or work a swifty with someone in the 'old country' to say you lived with them) - we're Melbourne residents.

Also, my understanding of VAT was that it was payable on any boat that was registered in any EU country. I'm happy to do the 18 month shuffle to avoid it.

That's why I haven't pursued UK registry but, thanks for the idea.
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Old 29-09-2015, 21:37   #4
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Re: Flag: USA or AUS?

I'm not sure how you can register it as a US flagged ship... neither you or your partner are US citizens, and if it is registered in a company name, then over 50% of the shareholders need to be US citizens.

I suspect what you actually have is what I have (I'm Canadian) ... a United State's State registration.. .in your case Delaware, in my case Florida. For me that is not an issue, as virtually all my sailing is in US waters, or to near by countries which overlook that the boat is not registered to a country (Bahamas, and Mexico).

If you go to most other places, you will need a country's registration. You do not qualify for USCG standards to flag it American. Just like me.

When I go further off shore, I will reflag my boat as a Canadian one. As long as I never bring it to Canada, I will never have to pay tax. The problem is, as a foreign flagged boat, even a Canadian one, it has to leave the US for a month before it is allowed back in each year. Hence my reluctance to reflag until such time that I know it will be out of the US for that time as required.

Why are you not considering other countries as your flag?
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Old 29-09-2015, 21:55   #5
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Re: Flag: USA or AUS?

avb3 - thanks for the clarification. It is Delaware.

Long story short - when we bought it the broker couldn't get the Oz registration quickly enough before we had to move the boat so he arranged Delaware reg for us.

We had no problems taking possession of the boat, clearing out of Croatia and clearing into Montenegro (we were flying the US flag) so, maybe we were lucky and they could have stopped us. Everyone seemed to take Delaware reg as meaning US flagged, or at least, equivalent to it (and so did we).

From what you've said - the choice is clear (there is no choice).

We're not looking at other countries because we just want it to be as simple as possible - we're not looking to do any 'tax haven' or 'flag of convenience' thing. We just want to be legal and not be bothered at borders.

Cheers,

Bryan.
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Old 29-09-2015, 22:15   #6
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Re: Flag: USA or AUS?

Quote:
Originally Posted by BRob View Post
No problems with tangents.

My understanding with UK registry was that you had to be a UK resident (or work a swifty with someone in the 'old country' to say you lived with them) - we're Melbourne residents.

Also, my understanding of VAT was that it was payable on any boat that was registered in any EU country. I'm happy to do the 18 month shuffle to avoid it.

That's why I haven't pursued UK registry but, thanks for the idea.
My register says that I am the owner and gives my Oz address but I recall that when applying I used a cousin as my UK rep.
More here... https://www.gov.uk/guidance/uk-ship-...-charter-100gt

'Owners or bareboat charterers who want to register their vessels on UKSR must be one of the following:

UK citizen
British dependant territories citizen
British overseas citizen
company incorporated in one of the European Economic Area (EEA) countries
citizen of a EU member state exercising your rights under articles 48 or 52 of the EU Treaty in the UK
company incorporated in any British overseas possession which has its principal place of business in the UK or those possessions
company in an European Economic Interest Grouping (EEIG)
If none of the qualified owners are resident in the UK, a representative must be appointed who is either of the following:

an individual resident in the UK...."

The fact that you are in the Med may cruel this idea but for a year or so in the very early 90s in previous ownership she spent quite some time in the Med.. dunno how that worked.
Try one of the offshore UK British registries maybe....
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Old 30-09-2015, 02:01   #7
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Re: Flag: USA or AUS?

FWIW:

We have been cruising in the Pacific for 28 years, and have visited many different nations. We are only state registered in IL. No one has batted an eye about this.

I make no claims that this is true in every country, but it has been true in all the ones that we have visited.

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Old 30-09-2015, 02:16   #8
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Re: Flag: USA or AUS?

Quote:
Originally Posted by avb3 View Post
I'm not sure how you can register it as a US flagged ship... neither you or your partner are US citizens, and if it is registered in a company name, then over 50% of the shareholders need to be US citizens.

I suspect what you actually have is what I have (I'm Canadian) ... a United State's State registration.. .in your case Delaware, in my case Florida. For me that is not an issue, as virtually all my sailing is in US waters, or to near by countries which overlook that the boat is not registered to a country (Bahamas, and Mexico).

If you go to most other places, you will need a country's registration. You do not qualify for USCG standards to flag it American. Just like me.

When I go further off shore, I will reflag my boat as a Canadian one. As long as I never bring it to Canada, I will never have to pay tax. The problem is, as a foreign flagged boat, even a Canadian one, it has to leave the US for a month before it is allowed back in each year. Hence my reluctance to reflag until such time that I know it will be out of the US for that time as required.

Why are you not considering other countries as your flag?
That's what I would have thought. It's pretty much the same here.

To the OP, if your not intending on bringing the boat back to Aussie, then the only other think you need to consider is the protections Australian listing gives you. Which to be honest I don't know what they are.

Re Embassies. I 'think' Australian authorities to more for their citizens in trouble than the US does, but that's only hearsay. And of course we took a big hit under Little Bush (Howard) years, thought things improved with the Abbott government with Bishop as Foreign Minister. Personally I think I'd want Australia representing me.

And of course, us Aussies are liked around the world a lot more than Yanks.
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Old 30-09-2015, 02:38   #9
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Re: Flag: USA or AUS?

hmmm...

I would have thought that one's passport would determine which consular authorities would come to your aid rather than the rego of your boat. I doubt if they give a **** about your boat!

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Old 30-09-2015, 02:42   #10
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Re: Flag: USA or AUS?

Quote:
Originally Posted by BRob View Post
If the proverbial hits the fan, which embassy would be better to have on our side? (I guess we already have UK and Australia - would the USA be good to include as well?)
I doubt the US would give a flying f..k about you if the fan is hit since you are not a citizen.

I'm an Aussie and fly the Swedish flag in the med because I picked up citizenship during my 15 years living there and because it is probably more convenient with a VAT paid yacht there. I don't like that I'm not flying the Aussie flag and I will possibly change the flag to Aus if I return to Melbourne but keep her in Greece and I'll definitely change it when I'm planning to cross the atlantic.

If you are not using a flag of convenience for tax or other reasons, then show some pride in your country and fly the Aussie flag
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Old 30-09-2015, 02:43   #11
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Re: Flag: USA or AUS?

Quote:
Originally Posted by Jim Cate View Post
hmmm...

I would have thought that one's passport would determine which consular authorities would come to your aid rather than the rego of your boat. I doubt if they give a **** about your boat!

Jim
I don't believe the op linked the two. He's just asked the question of what Embassy should he associate with.
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Old 30-09-2015, 02:46   #12
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Re: Flag: USA or AUS?

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I don't believe the op linked the two. He's just asked the question of what Embassy should he associate with.
Actually he does link the two. At least he requests whether having US Embassy assistance would be beneficial.

OP? How do you expect to get US Embassy assistance on non US nationality?
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Old 30-09-2015, 02:59   #13
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Re: Flag: USA or AUS?

My next suggestion was going to be the British SSR.....

As said elsewhere yacht flag counts for nothing when the poo hits the fan.... crew nationality is all that matters.
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Old 30-09-2015, 03:00   #14
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Re: Flag: USA or AUS?

Hi RC - you're right, I did, mistakenly, think that the embassy of the country whose flag you fly could come to your assistance.

I also, mistakenly, thought I was US flagged but it was only a state registration.

Hoppy, I will certainly fly the Aussie flag, proudly.

Cheers,

Bryan.
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Old 30-09-2015, 09:05   #15
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Re: Flag: USA or AUS?

Why not consider the Isle of Man for registration? There was discussion this past week in regard to this.

As a Canadian living as a Permanent Resident Alien in the U.S. I could not document under the U.S. flag and rather than state register chose to flag in Canada. I think there are many places where a flag other than the Stars & Stripes may be looked upon with a difference.

Delaware is a haven for registration of aircraft, boats and corporations due to a long standing reputation for no state sales tax and favorable atmosphere for corporations.
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