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Old 27-11-2010, 15:28   #31
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Originally Posted by hellosailor View Post
"However there are limits to how long you can keep a State registered boat in a State other than the State of Registration."
That's kinda inside-out. There's no limit on how long you can keep a vehicle outside the state where it is registered. But each state has a law regarding how long you can stay in it, before the vehicle must be registered IN that state. . . . .
And foreigners think it is only confusing for them?<G>
Your statement in the second underline is what my (first underline) statement says - the "limit" comes from the "other State" and its requirements for registration if you remain in its waters for "x-days." The State of registration has gotten its teeth into your wallet already - now the new/other State wants to get its teeth into that same wallet if you remain in their waters for more than what is considered a "transient's" period of time.
- - But in any case see the thread- Cruisers & Sailing Forums > Scuttlebutt > Dollars & Cents Taxes ? for information on keeping a boat in Florida if it is registered in a State.
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Old 27-11-2010, 16:36   #32
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Nick-
"This can be either a natural person (ie US citizen) or a US corporation." I had thought it was a 51% criteria but apparently it is even stricter than that now. Directly from the horse's mouth:

HOW DO I ESTABLISH U.S. CITIZENSHIP?

Citizenship is established by completion of form CG-1258. In addition to individuals, corporations, partnerships, and other entities capable of holding legal title may be deemed citizens for documentation purposes. Corporations must be registered in a state or the U.S; the chief executive officer and chairman of the board of directors must be U.S. citizens, and no more than a minority of the number of directors necessary to constitute a quorum may be non-citizens. In addition, at least 75% of the stock must be vested in U.S. citizens for a coastwise or fisheries endorsement.

from http://www.uscg.mil/hq/cg5/nvdc/nvdcfaq.asp#08

The "no more than a minority" is where the 51% rule comes from. A simple majority (51%, not 66%, etc.) must be US citizens.

Maybe you can slip that past them, or maybe you'd have to file fraudulent affadavits of citizenship. Or get creative about sales and salesback contracts with open dates conveniently not filed in. Maybe you can just dance around how a quorum is constituted. Folks manage not to get jailed for that kind of thing all the time, I know. If you can--don't worry, when the loophole is plugged the documentation will be voided as well.

Of course some of the perqs of documented vessel status (like repatriation aid) may not be of much use to folks who don't think "repatriation" means being shipped back to US soil.<G>


Boatman-
In the US there are no laws governing "shares" in a vessel or the corporation owning it. The owners, private partners, corporation, or other, set up the agreement and percentages amongst themselves. Barbaric, isn't it?<VBG>
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Old 28-11-2010, 09:55   #33
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Originally Posted by hellosailor View Post
HOW DO I ESTABLISH U.S. CITIZENSHIP?

Citizenship is established by completion of form CG-1258. In addition to individuals, corporations, partnerships, and other entities capable of holding legal title may be deemed citizens for documentation purposes. Corporations must be registered in a state or the U.S; the chief executive officer and chairman of the board of directors must be U.S. citizens, and no more than a minority of the number of directors necessary to constitute a quorum may be non-citizens. In addition, at least 75% of the stock must be vested in U.S. citizens for a coastwise or fisheries endorsement.

from USCG National Vessel Documentation Center, FAQ Page

The "no more than a minority" is where the 51% rule comes from. A simple majority (51%, not 66%, etc.) must be US citizens.

Maybe you can slip that past them, or maybe you'd have to file fraudulent affadavits of citizenship. Or get creative about sales and salesback contracts with open dates conveniently not filed in. Maybe you can just dance around how a quorum is constituted. Folks manage not to get jailed for that kind of thing all the time, I know. If you can--don't worry, when the loophole is plugged the documentation will be voided as well.
Hellosailor,

Pls. let us leave fraud out of the discussion... there's no reason to bring that up.

You are mistakingly assuming that the foreign national will become member of the board of directors. He will not; he will just be shareholder. The trust company will supply the CEO, directors and chair of the directors and all those people are US citizens, employees of the trust company. Besides the share certificate you get a Power of Attorney from the company and signed, but un-dated, letters of resignation of the directors and CEO.. in case they would abuse their position, a standard measure for many/most corporations.

Basically, the only 2 things not possible is fishing in the US commercial zone and doing US-US coastal freight shipping, neither of which has any relevance in our case.

This same construction works in 99% of all the worlds nations... you would be surprised if you research this and find how many US corporations are really owned by foreign nationals.

cheers,
Nick.
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Old 28-11-2010, 10:11   #34
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It is just as Nick said. He beat me to the punch. I am a US corporate lawyer. But I like Wyoming corporations better. Delaware keeps raising their fees. Wyoming has a flat $50 per year report fee for non-residents. And its easy to migrate to another jurisdiction from Wyoming should you feel the need.
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Old 28-11-2010, 10:16   #35
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You can handle this the way my husband did- marry an American!
It does rankle him a bit that in the eyes of the law I am the sole owner/operator but that was the only way we could figure out to get our boat documented in the US.
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Old 28-11-2010, 13:20   #36
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Still comes back to two issues, Nick.
1-You're trusting a stranger to have control over your boat, including the ability to sell it out from under you. (Yes, some odder things have happened recently.)

2-You've still got a sham corporation, which has no legitimate business purpose except for avoiding citizenship requirements for the boat ownership.

When a corporation has no legitimate business purpose or activity...things can go badly. Folks learned that in the 60's and 70's when they used sham corporations to make their personal aircraft into "businesses" and take a business loss. Once the IRS started busting them, folks learned that if they wanted a corporate ownership of their plane (or boat) they'd damn well better run a legitimate corporation and put it into an arms-length real effort at being a profitable charter business. Which could actually make money, stay legal, AND allow them use of their plane (or boat) when they wanted it.

Except here, you need 75% of the stockholders to be US citizens before that kind of corporate real business use can happen. And again...that's not possible here, unless someone else is owning the boat.

I'm sure you can do it, and if the word "fraud" offends anyone, let's just say it would be skating on thin legal ice.

US citizens evaded income tax for years by having payments sent to offshore banks and using the funds with offshore credit cards so there was not trace of the money. Haha, that worked till it got popular and the IRS started busting them what, five years ago now?

Folks used to write off personal use of their business-leased cars in the 60's, the IRS started to require detailed mileage logs and busted that one too.

You think the USCG is any less creative than the IRS about closing loopholes and busted the abusers??

VERY THIN ICE.

Especially if the corporation, as the owner, is the insured party. The insurer steps up, says "Sham corporation, insurance fraud, void! Uninsurable interest!" and then the party can start.

Just because you can get away with it, doesn't mean something is a good idea. Even if someone can argue that it is technically legal. The opinion of a lawyer? Never counts for mch more than a coin toss, since there are at least 2 lawyers representing 2 sides in every case--and one of them loses, every time. Sorry, Nick. This one just doesn't pass the smell test.
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Old 28-11-2010, 13:32   #37
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So my English friend... there you have it... some will regard your US thingy ok.... the more paranoid/accusatory.... 99% of US officals will try and nail you for fraud etc... So don't bother.. much hassle.. zero gain
Register in the UK and pay the annual cruising permit of around$100... the boat if built in the US will be fine and you can leave her there or take her in and out as often and for as long as you want... no problem.
You need the 90 day visa... the UK needs 15quid for 5yrs registration... the Yanks will love you coz of your flag and you'll have a great time... especially when you open your mouth....
"Gee Honey.... (fluttering of eyelashes) Ahh jes lurv yer akcent...."
You cant go wrong....
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Old 01-12-2010, 19:24   #38
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One point which may have got lost in this thread is that if you are on a boat of US or UK flag and you intend to come and go from US territorial waters (offshore runs included), you'd better make sure that you have a full US VISA in your passport, not just the I-95 Visa Waiver thingy.

We do, but CBP just reminded me yesterday that they regularly get cruisers on visa waivers and levy an $800 'processing fee' to iron out the paperwork and I imagine you still have to go through the pain of getting the visa.

Also ...... be aware of the reporting requirements when you are on a cruising license, they vary wildly from sector to sector.

NY sector (amazingly enough) didn't seem to care that I was cruising through their area on 9/11 with a UN World conference going on, they sounded like they had better things to do when I dutifully called to report and they didn't even want to know when I left their sector - "just call NJ when you get there".

RI just wanted to know when I moved from one major port to the next.

However .... Florida insists on a call to the reporting center EVERY TIME you move the boat (1-800-432-1216). They were most insistent about that. You have been warned ....

BTW, I came across one of their 25ft patrol boats on the ICW with FOUR x 250HP outboards, so don't think you can outrun them ;-)

Duncan
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Old 02-12-2010, 00:21   #39
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Quote:
Originally Posted by hellosailor View Post
1-You're trusting a stranger to have control over your boat, including the ability to sell it out from under you. (Yes, some odder things have happened recently.)
No, that can't happen because it would be an unauthorized transaction. It's the same as the CEO of Ford deciding one morning to sell a production plant to his neighbor. These kind of transactions are impossible.
Almost every serious company has employed directors, secretary and CEO. Sure they might have some shares but mostly minor. It's no different here.

Quote:
2-You've still got a sham corporation, which has no legitimate business purpose except for avoiding citizenship requirements for the boat ownership.

When a corporation has no legitimate business purpose or activity...things can go badly. Folks learned that in the 60's and 70's when they used sham corporations to make their personal aircraft into "businesses" and take a business loss. Once the IRS started busting them, folks learned that if they
...
sorry but you are now mistakenly mixing up sham corporations of US citizens with normal, legal corporations with foreign shareholders. There is no need to make any business losses or anything. 100% of yachts above say US 1 million are owned by corporations. You imply that all those are shams?!

The biggest reasons for this are the hiring of crew, contractors and control of liability.

Quote:
Except here, you need 75% of the stockholders to be US citizens before that kind of corporate real business use can happen. And again...that's not possible here, unless someone else is owning the boat.
Again, none of the stockholders needs to be US citizen for the company that is discussed here. A foreign individual with a boat in the US doesn't need to pay any other US tax than those related to that boat... he/she has absolutely zero interest in booking a financial loss for US tax purposes. You are thinking of US citizens trying to do illegal things, which isn't what I wrote about.

Quote:
I'm sure you can do it, and if the word "fraud" offends anyone, let's just say it would be skating on thin legal ice.
fraud is doing something illegal. Skating on thin legal ice is doing something that is in a gray area of the law. None of that is applicable here.

Quote:
US citizens evaded income tax for years by having payments sent to offshore banks and using the funds with offshore credit cards so there was not trace of the money. Haha, that worked till it got popular and the IRS started busting them what, five years ago now?
pls... don't make me repeat that we are discussing non-US citizens with a boat in the US, NOT US citizens who try to evade paying their tax.

Quote:
Folks used to write off personal use of their business-leased cars in the 60's, the IRS started to require detailed mileage logs and busted that one too.
The only "folk" having to do with the IRS are of the US citizen kind. You make me repeat again

Quote:
You think the USCG is any less creative than the IRS about closing loopholes and busted the abusers??

VERY THIN ICE.

Especially if the corporation, as the owner, is the insured party. The insurer steps up, says "Sham corporation, insurance fraud, void! Uninsurable interest!" and then the party can start.
... and again

Quote:
Sorry, Nick. This one just doesn't pass the smell test.
Come on, you must have read what I write. Tell me exactly what you think a non-US citizen can gain by having a US corporation that own a US based yacht. Identify that for me because I don't smell a thing. The only thing this individual will do is donate to the US economy without any financial advantage to him/her. Yes, the company will make a yearly loss, but the only one who is gonna pay for that is the shareholder. The company will have no US based income and thus no US tax to pay.... meaning they can't deduct any loss from that.

No, you are (probably unaware) trying to put 100% decent and solid companies in a "smelly corner". That corner.. is reserved for US citizens who try to evade the IRS just like you correctly describe.... but it is not relevant for the companies that are the subject of this discussion.

cheers,
Nick.
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Old 02-12-2010, 00:27   #40
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Originally Posted by duncan_ellison View Post
One point which may have got lost in this thread is that if you are on a boat of US or UK flag and you intend to come and go from US territorial waters (offshore runs included), you'd better make sure that you have a full US VISA in your passport, not just the I-95 Visa Waiver thingy.

We do, but CBP just reminded me yesterday that they regularly get cruisers on visa waivers and levy an $800 'processing fee' to iron out the paperwork and I imagine you still have to go through the pain of getting the visa.
Correct. In 2003 we were confronted with a 7 month procedure to get the US visa while in the Dominican Republic. After arrival in Puerto Rico and reporting to immigration (because we're too honest) we were fined $200 each without any promise of being allowed to stay. The immigration officers knew we had been "more honest" than others and delayed the payment procedure until they got word we would get a 6 month (single entry) visa waiver. We left a couple days later because the rigger we came in for never showed up...

I can believe this $200 per person has been increased since 2003 but think the $800 must have been for the whole crew.

ciao!
Nick.
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Old 02-12-2010, 03:45   #41
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Originally Posted by hellosailor View Post
Still comes back to two issues, Nick.
1-You're trusting a stranger to have control over your boat, including the ability to sell it out from under you. (Yes, some odder things have happened recently.)

2-You've still got a sham corporation, which has no legitimate business purpose except for avoiding citizenship requirements for the boat ownership.

When a corporation has no legitimate business purpose or activity...things can go badly. Folks learned that in the 60's and 70's when they used sham corporations to make their personal aircraft into "businesses" and take a business loss. Once the IRS started busting them, folks learned that if they wanted a corporate ownership of their plane (or boat) they'd damn well better run a legitimate corporation and put it into an arms-length real effort at being a profitable charter business. Which could actually make money, stay legal, AND allow them use of their plane (or boat) when they wanted it.

Except here, you need 75% of the stockholders to be US citizens before that kind of corporate real business use can happen. And again...that's not possible here, unless someone else is owning the boat.

I'm sure you can do it, and if the word "fraud" offends anyone, let's just say it would be skating on thin legal ice.

US citizens evaded income tax for years by having payments sent to offshore banks and using the funds with offshore credit cards so there was not trace of the money. Haha, that worked till it got popular and the IRS started busting them what, five years ago now?

Folks used to write off personal use of their business-leased cars in the 60's, the IRS started to require detailed mileage logs and busted that one too.

You think the USCG is any less creative than the IRS about closing loopholes and busted the abusers??

VERY THIN ICE.

Especially if the corporation, as the owner, is the insured party. The insurer steps up, says "Sham corporation, insurance fraud, void! Uninsurable interest!" and then the party can start.

Just because you can get away with it, doesn't mean something is a good idea. Even if someone can argue that it is technically legal. The opinion of a lawyer? Never counts for mch more than a coin toss, since there are at least 2 lawyers representing 2 sides in every case--and one of them loses, every time. Sorry, Nick. This one just doesn't pass the smell test.
Sorry, as a lawyer, I can say that Nick is exactly right.

1. Owning an asset -- in this case, a boat -- is a perfectly legitimate reason for the existence of a company. Exactly the same thing is done for all kinds of real estate, factories, what have you. There is nothing sham about it at all.

2. Keep in mind that the law considers a company a "person", in the literal sense. You and I are "natural persons"; a company is a "legal person"; and both types of persons are essentially the same where owning property is concerned. And both types of persons have citizenship.

3. There are trust companies who provide professional directors. You are not "trusting a stranger". Most of your pension assets are owned this way.


Owning a boat in the name of a company is a perfectly legitimate way to do it. It's a bit of a PITA, what with the requirement of U.S. citizens as directors and so forth. But can be solved for a price and with essentially no risk through a trust company.

I own my boat this way in order to keep her on the U.K. registry. The U.K. is simpler than the U.S. -- they don't care about U.K. citizens being directors. So I am the sole director of the company, and the company files returns as being "dormant" -- no accounting activity -- every year. It is just a vehicle to own an asset. It fulfills both the letter and the spirit of the law, because the boat's owner is in fact a U.K. citizen (rather, a U.K. legal person). Everybody is happy.
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