Originally Posted by goboatingnow
A company and I am generalising here, must be a legimate concern. Its must be seen to be "trading". Hobby companies generally cannot exist as they fall foul of various corporate governance laws.............
............Ask yourself this, what legitimate reason could there be to wrap a purely leisure vessel in a corporate structure.
Appreciate that you are generalising - but IME nothing fundamentally wrong with a company existing that does not actually trade
. nor is ever intended to.
Perfectally accepted business practice to hold whatever assets you want to in a company - whether it makes commercial
sense to do so is another matter (not only on the costs involved, but also from the impact of doing so from the relevant tax authorities, on you and / or the company / assets.....including from them "looking through" the company. Sometimes that is
actually a good thing!).
Why put a purely leisure vessel in a corporate structure? - it can be the equivalent of simply putting something into a seperate drawer marked "boat".
Could be that making transfering ownership
simple is attractive to some (not just to 3rd parties, but amongst family
structures - or to a lender, as makes repo slightly easier (and security
better for the lender) - especially if they can be the Directors as well as the usual loan agreement). possibly that the vessel flagged somewhere with no skipper
licensing requirements (no need to get training on how to Poop?!) and vessel not required to have "safety" equipment
designed by a commitee.
Might be that privacy (of ownership) is important - sometimes a big boat does mean big money
. Lots of folk around who would do stuff for a few dollars, let alone for a sniff at a couple of million - how much are your kid's eyes worth? Could be part of an asset protection strategy (Divorce / Bankruptcy / Govt) - unlikely to be bombproof, but sometimes more time / cost / complexity for someone coming after what you have (rightly or wrongly) buys useful time.
Could even be simply that you can't be bothered to deal with the dull end of boat paperwork - and can afford not to, with corporate ownership allowing others to get on with the job and not bother you (not to say that same could not be done with agreements, but there be a cost to those as well).
If the "owner" is (genuinely) a person who is internationally based, and with earnings worldwide makes sense to draw a line around assets bought with "foreign" money
, park them somewhere that doesn't in itself generate a tax problem (Offshore "Tax havens" are ideal as they are tax neutral) - and then deal with the tax authorities of somewhere else that is foreign where they are currently based / visiting on a "pay unto Caeser" basis. but only
that. Just because you visit somewhere doesn't mean your money also has to.
In practice, likely a combination of some of the above tipping the balance - for most it won't make sense.
If in doubt ask your tax lawyer or tax accountant. If you don't already have one (or both) of those then answers are likely that a) you don't need an offshore
boat owning company and b) doing so likely to do more harm than good.
Of course if you are trying to hide ill gotten gains
- you would be best advised to do what everyone else does. and keep the money / assets onshore
.....the best way to hide a tree is in a forest.