Foreigner Buying a Sailboat

[Mexdon]

Originally Posted by Wannabe-007

I thought that was expensive, so I called Maritime New Zealand who informed me I'd be paying around either $3,700 USD or $700 USD to register directly with them - depending on the class (A or B) that I would register. (and without creating any entities, solicitors, and other such malarkey)
Part A which provides nationality, evidence of ownership and accommodates the registration of mortgages; and Part B, which provides nationality alone.
The OP is not a kiwi, so feel free to ignore my NZ Investigations. However given the thread title, its probably still interesting to some.

edit

I'm currently working through this and have an interview with the US Embassy next week.
One thing i've learned is that the B1/B2 is definitly required if you plan to buy a boat in the states. You're considered to be doing a business transaction of sorts, so you need the B1/B2 as opposed to just going in on a visitor visa, or a visa waiver (which I could otherwise do).

Getting your ducks in a row is particularly hard while they're still well 'n trully alive!

It is important to note here that to register with Maritime NZ you MUST be a New Zealand citizen or corporation or trust. I have not Investigated if foreign owners of a corporation have a negating effect on the corporation as with a Delaware one as I am a kiwi but will do so and report back.

Also be aware of the regulations regarding a NZ registered yacht departing for overseas from NZ (that is important if you visit NZ in your yacht). All NZ registered yachts must have an inspection prior to departure. If you do not intend to visit NZ there is no need to comply with all the requisits.

[Mexdon]

Here is a link for the Maritime NZ and Yachting NZ regulations for a yacht going offshore from NZ.

http://www.yachtingnz.org.nz/sites/y...16%20FINAL.pdf

I have not yet been able to identfy if non NZ directors of a corporation affect the status of the company. A trust may be a better option.

[Wannabe-007]

Originally Posted by Mexdon

I have not yet been able to identfy if non NZ directors of a corporation affect the status of the company. A trust may be a better option.

From the Maritime NZ A-guide-to-ship-registration
"Parliament in September 1992 determined that ship registration would in future revolve around majority New Zealand ownership. This contrasts with the former system which allowed a ship wholly owned by any Commonwealth person to be registered in New Zealand."

...and while im quoting it, I did find these opening comments helpful in understanding more of registration really means.
I must look more into international law.

Replace 'NZ' with your country of registration as required.

"...registration has served to determine which country's law governs the operation of a ship and the behaviour of those onboard -key concepts which today play an important part in the international law of the sea.

Basically, registration confers nationality on a ship and brings it within the jurisdiction of the law of the flag state. Thus, a New Zealand registered ship is bound by New Zealand law -both its shipping and other applicable provisions -though the vessel may venture well outsidethe territorial limits of New Zealand. A New Zealand ship abroad is accorded the protection of the Government of New Zealand, much as a New Zealand citizen is while travelling overseas. A vessel's bona fides are established by its registration papers just as a passport establishes them for a person. Registration may also determine criminal jurisdiction in the event of any incident or accident in international waters."

Here is a link for the Maritime NZ and Yachting NZ regulations for a yacht going offshore from NZ.

Hmmm... yes, thats a worthwhile point. We will probably visit NZ, then go back up to Aus to sell. The boat will likely meet all the practical aspects of CAT-1 before we leave the US... but there's likely to be a delta between that and meeting the finicky details.

Obviously Delaware registration would allow you to avoid any restrictions that would otherwise be placed on you if registering in your home country.

[Mexdon]

Wannabe-007 Look into the NZ trust situation as a trust can own a yacht an is 100% NZ entity. The Trustee is a NZ'er and it doesn't matter that the settlor and beneficiary are non NZ'ers. It could be a way around what you found re company structure having to be majority NZ owned. Also a trust can be a shareholde of a company and in NZ you only need one shareholder to form a company, you can name the accountant as a director to open bank accounts etc.

There will be an annual fee for the filing of returns etc.

[su2014]

Originally Posted by Wannabe-007

From the Maritime NZ A-guide-to-ship-registration
"Parliament in September 1992 determined that ship registration would in future revolve around majority New Zealand ownership. This contrasts with the former system which allowed a ship wholly owned by any Commonwealth person to be registered in New Zealand."

...and while im quoting it, I did find these opening comments helpful in understanding more of registration really means.
I must look more into international law.

Replace 'NZ' with your country of registration as required.

"...registration has served to determine which country's law governs the operation of a ship and the behaviour of those onboard -key concepts which today play an important part in the international law of the sea.

Basically, registration confers nationality on a ship and brings it within the jurisdiction of the law of the flag state. Thus, a New Zealand registered ship is bound by New Zealand law -both its shipping and other applicable provisions -though the vessel may venture well outsidethe territorial limits of New Zealand. A New Zealand ship abroad is accorded the protection of the Government of New Zealand, much as a New Zealand citizen is while travelling overseas. A vessel's bona fides are established by its registration papers just as a passport establishes them for a person. Registration may also determine criminal jurisdiction in the event of any incident or accident in international waters."


Hmmm... yes, thats a worthwhile point. We will probably visit NZ, then go back up to Aus to sell. The boat will likely meet all the practical aspects of CAT-1 before we leave the US... but there's likely to be a delta between that and meeting the finicky details.

Obviously Delaware registration would allow you to avoid any restrictions that would otherwise be placed on you if registering in your home country.

some of these threads i figure arent that serious but if the thread has drifted into a simple question like "can a foreighner control a delaware USCG registered floating asset{boat} than the answer is yes. have an agent or broker check the details." it is not the simplest act to do and a delaware service speeds the process. the tax saved easily offsets simple state sticker costs.an attorney can also do this as well and clarify those B1/B2 concerns.just be sure to declare over 10k when flying into USA. i know that is still the current law. fairwinds.

[Wannabe-007]

Originally Posted by sugarbaby-dot-c

...the tax saved easily offsets simple state sticker costs...

What tax?
As a foreigner, I have been informed, there is no tax.
...or are you talking about reselling in the US?
The OP plans to resell in the US. I dont.

@Mexdon. Why would I need a trust? Im a Kiwi, so i have no need to get around nationality constraints if registering in NZ.

[Mexdon]

@Mexdon. Why would I need a trust? Im a Kiwi, so i have no need to get around nationality constraints if registering in NZ.[/QUOTE]

Sorry, didn't realise I was communicating with another Kiwi.

[su2014]

Originally Posted by Wannabe-007

What tax?
As a foreigner, I have been informed, there is no tax.
...or are you talking about reselling in the US?
The OP plans to resell in the US. I dont.

@Mexdon. Why would I need a trust? Im a Kiwi, so i have no need to get around nationality constraints if registering in NZ.

my last post was based on your last paragraph""obviously delaware registration would allow you to avoid any restrictions that would otherwise be placed on you if registering in your home country". if all you want to do is export after purchase there is no tax. my buddy just bought a powerboat recently and it was his third that he bought USA and immediately left with. i recall Florida gives the last buyer 90 days to leave without any sticker costs or state tax due.that is having nothing to show authorities except a "bill of sale" and insurance. fairwinds.

[skipmac]

Originally Posted by Wannabe-007

What tax?
As a foreigner, I have been informed, there is no tax.
...or are you talking about reselling in the US?
The OP plans to resell in the US. I dont.

Not just reselling but buying a used boat in the USA almost all states will charge a "sales and use tax" which applies even on used boats. This is a tax not unlike VAT but applies on lots of things new and used like cars or boats, even between two private sellers. So in the US a private buyer from a private seller could be liable for the sales and use tax which is in most states 6%.

Now I am not certain how this will apply to non-US citizens but the rules for citizens are very clear. For example, in Florida if you are a Florida resident and by a used boat you have to pay the 6% tax. There are a few special exemptions but for simplicity that's the rule. If you are a resident of another state and buy a used boat in Florida you have 90 days to take the boat out of Florida or you will also pay the 6% tax. If anyone buys a boat in any state and registers the boat in Florida then they will be charged the 6% tax. Again there are a few special exemptions to this rule as well but a minor issue.

Again, I am not certain how this will apply to a non-citizen. Would you still have to comply with the 90 day rule to remove the boat? Do not know but I am almost positive that even a non citizen that buys a boat, if he/she goes to Florida to register the boat then the tax will be charged.

If you do plan to buy a boat in the US I can direct you to the various state agencies that would regulate the taxes.

[svlamorocha]

[QUOTE=Ex-Calif;1591261
USCG Documentation - Boats over 5 tons may be documented - 5 tons is based on interior volume not weight and equates to about 25 feet. US citizens and permanent residents may document boats. [/QUOTE]

I agree with many things you wrote but not the bit about permanent residents being able to "document" a boat with USCG. When I did the research a few years ago the answer was that only citizens could do it.

Regarding the practical ability to use a US state reg to sail outside the US, in my experience along the East coast of the Americas people get away with state reg everywhere except in the French islands and when Brazilians/Argentines want to take the boat into their own country.

I have never sailied outside the US with only a US state reg but I have come across many boats who have done it without a problem. That said, I agree 100% that it is not a sound idea if you are risk averse (I think risk of needing consular assistance for the boat and not getting it), but I will not argue against those who believe that it is a decent option for South Americans who cannot register at home, are working with a small budget and have a boat that is not worth a lot.

C

[Wannabe-007]

OK, so here's my attempt at a use case.

Im a foreigner buying a used boat for 250k in Florida and registering it outside the US. I intend to leave the US 2 months later after purchase.

- Sales tax is not applied, but if I stay in Florida longer than 90 days i'll get whacked with a $15,000 bill.
- Sticker cost is avoided, but if i stay in Florida longer than 90 days, I need to pay x. (what is x - roughly?)
- State tax is the same as sales & use tax.

Does this sound right?

If I register the boat in Delaware, is the tax the same?
...and if I resell in the US, I can potentially get around having to pay sales tax.


As a side note... this whole tax thing suggests that I have 6% more buying power than my American competition.

Originally Posted by skipmac

If you do plan to buy a boat in the US I can direct you to the various state agencies that would regulate the taxes.

Please do.
My information comes in this regard comes from brokers in the US who do this for a living, but no harm in double checking my facts.

[su2014]

Originally Posted by svlamorocha

I agree with many things you wrote but not the bit about permanent residents being able to "document" a boat with USCG. When I did the research a few years ago the answer was that only citizens could do it.

Regarding the practical ability to use a US state reg to sail outside the US, in my experience along the East coast of the Americas people get away with state reg everywhere except in the French islands and when Brazilians/Argentines want to take the boat into their own country.

I have never sailied outside the US with only a US state reg but I have come across many boats who have done it without a problem. That said, I agree 100% that it is not a sound idea if you are risk averse (I think risk of needing consular assistance for the boat and not getting it), but I will not argue against those who believe that it is a decent option for South Americans who cannot register at home, are working with a small budget and have a boat that is not worth a lot.

C

you are correct also and it is 100%legal.all that Delaware and Nevada,etc. red-tape really only pays if state tax is over 6k{100,000 value @6% tax} and then the LLCs{companies} require periodic filings that can be confusing for some and require more filing fees. some pay 6% tax just to avoid LLC maintence fees.it is also legal to move a boat from country to country using just a "bill of sale" and courtesy flags. seen it done and its legal also.after-all it isnt stolen but just not registered and if you want to really confuse some countries custom agents also have valid insurance as many cant seem to be able to wrap their mind around the concept of insuring un-licensed RVs{recreational vehicles}.still 100% legal if the insurance company excepts a fax copy of the "bill of sale" and/or survey than its insured.period, fairwinds and godspeed.

[su2014]

simply put if all you want to do is beat the USA tax than export within 90 days.any other method using delaware LLC{corps} will involve fees ,periodic filings etc that could end up being higher than the tax .the 1800 delaware numbers will gladly take your credit card and start the process but i would advise researching the recent govt websites before calling those 1 800 numbers.you we be talking to salespeople more interested in getting your credit card number than any future concerns you might have .JMHO DYODD

[Jman]

My couple of cents worth of experience.

I am not a US Citizen, I am a permanent resident. Fortunately my wife is a citizen. My understanding is that to register as a corporation (other posts suggest Delaware), that corporation must be majority owned and managed by US Citizens, so I am not sure how specifically Delaware gets around this issue, other than some complicated loophole breaking.

Many states in the union impose a sales tax when certain items are transferred, even between private parties, when the purchase is transacted. I live in Massachusetts where it is 6.25%, in Mass, if you are not registering the, but rather CG documenting it I am not sure how they "catch" you if you don't walk down to the office to pay it, which we did.

If you register the boat then tax must be paid before registration is issued.

Sales taxes vary by state, so there are probably advantages to registering in state with lower or no sales tax (Delaware?).

Then there are excises taxes, annual taxes paid like property taxes on a home. These, at least in MA, are levied by the tax department of the town in which the boat resides. Most harbors up here require a mooring permit, that may not be obtained without paying the excise tax.

I suspect the US Citizen requirement is because of the implied protection provided by the US Government and it's navy. Since nowhere above is there any mention of federal tax, it makes sense that they should only be responsible for its citizens, and not any foreigner just looking to document his boat.






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[skipmac]

Originally Posted by Wannabe-007

Im a foreigner buying a used boat for 250k in Florida and registering it outside the US. I intend to leave the US 2 months later after purchase.

- Sales tax is not applied, but if I stay in Florida longer than 90 days i'll get whacked with a $15,000 bill.

100% correct if you are US citizen. For a Kiwi or other invader from over seas I will have to ask. A side note, if you buy a boat and need to work on it to make it seaworthy for departure you can get at least one 90 day extension as long as the boat is at a yard or other boat repair business. Doesn't count if you are parked in your cousin's back yard.

I'll try to contact the state of FL tax office tomorrow and inquire about application to non citizens.

- Sticker cost is avoided, but if i stay in Florida longer than 90 days, I need to pay x. (what is x - roughly?)

Chump change. Florida registration fee is maybe $200 or so max.

- State tax is the same as sales & use tax.

Yes for practical purposes.

Originally Posted by Wannabe-007

If I register the boat in Delaware, is the tax the same?

I think there is no sales tax in Delaware. However since every state is different I would defer to a Delaware expert to confirm this. I do know that Rhode Island has no sales tax on used boats. Some states may be a little more maybe 6.5-7%. Many states including Florida have a cap so if you buy a $10,000,000 yacht you are not hit with a $600,000 bill.

...and if I resell in the US, I can potentially get around having to pay sales tax.

The buyer is responsible for the sales tax so not your problem or expense. Every time the boat is sold each new buyer will potentially be liable for sales tax.


As a side note... this whole tax thing suggests that I have 6% more buying power than my American competition.

Theoretically although for large, expensive boats there are loopholes that plenty of buyers use.,


My information comes in this regard comes from brokers in the US who do this for a living, but no harm in double checking my facts.

I was a broker in Florida for several years before I got a real job.

The crack about getting a real job is of course a joke. I worked hard at selling boats and thoroughly enjoyed it. Just got tired of living in south Florida. Got to be too expensive, too crowded and was way too hot in the summer.