Red Tape

[KCee]

I have been searching threads and other websites to no avail.
I am researching buying a 33' cat and am budgeting immediate and annual 'red tape' costs.

I am a Canadian living legally (meaning with FM3 status) in Mexico and I am looking at a cat for sale in Panama registered in the US.
Basically I want to liveaboard here in Mexico, but next summer sail up to Toronto and eventually do a circumnavigation.
What do I need in regards to permits, licenses, registrations, etc? I have absolutely NO IDEA!

I would appreciate the answers, or a place I can go to get answers.
Thank you.

[KCee]

.....ummmm..... still waiting..... um........... ...tick....tick.... tick.... .......

[Southern Star]

KCee, there IS no one answer to your question. If you want to get a Canadian registration for you boat, you will end up paying taxes and possibly duty, as well. I cannot speak to a Mexican registration, but suspect the same would be true. Either way, you WILL end up paying in order to change the registration; furthermore, in the course of your travels, if you overstay at many destinations (read for example the recent thread on paying VAT in Spain if staying more than 6 months), you may have to do it again.

Can you avoid all of this by keeping the US registration? Doubtful, as you are not a resident of the US.

Brad

[KCee]

Hi Brad,
What would be the implications of registering the boat in the name of a friend who lives in the US and getting permission or rental letters from that person?

[Southern Star]

KCee, I am not licensed to practice law in the United States but I forsee the following problems:
1. Your friend is not the owner and unless he/she is a fool, why would they want to take on the potential liablitly issues ?
2. Only the owner can get insurance.
3. Checking in an out of foreign ports can be complicated enough for the owner of the vessel - I for one wouldn't want to be attempting to do the same based upon a letter of permission, or a rental agreement.
4. Even assuming that the fraudulent owner is prepared to obtain insurance, I can only imagine the difficulties that would arise if you attempted to make a claim when the owner is not, and has not been the operator of the vessel.
5. You and your friend would be committing a fraud in order to effect the registration.

Brad

[TaoJones]

Since the vessel is already in Panama, and you will presumably have to go there to sail her back to Mexico, why not set up an IBC there (in Panama). The IBC would hold title to the vessel, and the vessel represents the assets of the IBC. You hold all of the outstanding stock of the IBC, and can do so anonymously.

Many vessels fly Panamanian flags of convenience, so customs and immigrations authorities worldwide are used to seeing that. Sailing such a vessel into Mexican waters would be no different than sailing a US or Canadian vessel into Mexican waters. As long as the paperwork is legitimate, accurate and complete, the authorities will be satisfied.

TaoJones

[Southern Star]

You may be right Tao, on the other hand the boat is currently is registered in the US and not Panama. While many commercial vessels are registered in Panama as a 'flag of convenience', I have always understood that this was in order to avoid the more stringent inspection/certification requirements in the US/Canada etc., and to get more favourable income tax rates. I would assume that there will still be taxes/duties associated with the importation to/registration in Panama, plus the cost of setting up the corporation, plus (likely) annual tax filings - all without the benefits that motivate commercial shipping.

Brad

[imagine2frolic]

There are states in the U.S. that do not require taxes until the vessel hits their soil. Canada maybe the sameway? I would think much research is needed, or a lawyer. Taxes can be avoided in many ways, but it must be legally, or sooner, or later you will pay, and it may be more than just money........BEST WISHES in figuring it out LEGALLY!.........i2f

[KCee]

Thanks for the info so far.... all excellent food for thought.... it's getting a little advanced for me..... I have been searching for info that basically lays it out in a list.... and I am not sure if I am missing anything here......
1) buy boat
2) register boat with one country
3) possible pay duties and taxes of country most residing in?
possible get licenses/ permits/ health inspections/ oceanworthiness inspections/ ?????
4) buy insurance
5) start sailing in Europe
6) apply for visas? passes? permission to enter waters?... or.....
7) ....show up at customs unannounced with paperwork and passports and prepared to pay aproximately what to travel coastline of that country?

I am not sure how any of this works... maybe this would be a good book for sale? I have been looking but not finding.... and of COURSE it would all have to be legal...

[Charlie]

Hi KCee:

Two states that I know of in the US tha do not charge tax are Oregon and Montana. My boat is registered in Montana although she is now in La Paz Mexico. I did not have to pay sales tax on her. It might be more difficult for you to have the boat in Canada and registered as a US boat. Tax law is very complicted and varies from State to state and country to country. I would recommend that you read the Voyagers Handbook by Beth Leonard. It will answer some of your questions and create alot of others. Good Luck.