Flagging My Boat, Captains and Insurance

[toddsgirl0323]

Hi all!

I'm so excited for my new yacht arriving early next year! So a warning: I don't know anything about this, so please don't blast me for my ignorance!

I am having some trouble with flagship rules, who can captain from which country and how it works with insurance. Confused yet?

Ok, I live in canada. I don't want to flag my boat here. it's going to cost an extra 300,000 dollars to do so. Why? 11.5% duty and 5% tax.

USA means 1% duty, and whatever tax for whatever state. But then a canadian captain that I really like and want for my ship says he can't captain in the states cause he isn't US coast guard certified. Still following?

So that brings me to the caribbean. The manufacturer for my boat claims most of his clients flag it from there--no duty, taxes, and lax regulations make it easy. But then who can sail the darn thing? anyone? only people certified from the British sailing association (I can't remember the name)?

And can a canadian captain sail my US flagged ship so long as there are no paid passengers on it? Can a canadian ever get US coast guard certified?

I am so confused. I have been told it also depends on your insurance--who can captain your ship, from which countries.

How does anyone work through all this BS?

If anyone can shed some light, I would be most appreciative. Am I just being cheap to not want to pay $300,000 extra fees? should I just suck it up and find the money somewhere?

Thanks!

[Target9000]

If 16.5% of your boat's value is 300k dollars, I'd hire a lawyer to tell me what to do. If you can afford a boat that big I imagine you can afford the legal advice!

[toddsgirl0323]

Well, its for a film production. the money isn't MINE, its belongs to sponsors and investors! Needing an extra 300,000k is needing one or two more good sponsors or investors. LOL. And yes, its a LOVELY ship...very pretty, spacious and wonderful...worthy of her price tag!

[Target9000]

Well like I said, if the investors could spend that type of money on a boat, I'm sure they'd prefer to see their money maximized by a good maritime attorney rather than depend on some schmuck like me giving you advice on the web!

I don't mean to be an ass about it, but seriously, if 300k+ is at stake, its time to bring in the guys that get paid to know the law.

Good luck!

[Unicorn Dreams]

If not lawyers, then get tax experts. Alot of advixe here, but not legal advise. GET THE EXPERTS

[Capt Phil]

Not certain I can shed too much light on your problem but here goes.
I held a Mates ticket for Coastal Inland Waters back in the 70's working towboats, fishboats and light freighters up and down the BC coast. I was licensed to drive anything up to 300 tons but handled larger tonnages with no licensing problem in those days. When I immigrated to the US in the early 80's, I had to wait until I had US citizenship to sit for my USCG Masters ticket. I was given sea time for my Canadian maritime service including sail and towing endorsements and had to pass the medical. I also had to maintain a certain number of days sea time to keep my license current.
As a Canadian, I could not hold a USCG Masters License. Much of my experience in the last 25 years or so was spent on deliveries in the US and Mexico but periodically I worked as a full time skipper on larger private yachts on the west coast.
I never had a problem with having my US license accepted for insurance or clearance either in Canada, US, Mexico, Costa Rica, Panama, Turkey or Greece. Principally, I worked on US flag vessels but occasionally under the Cayman Island flag. Never had any difficulty in any clearance or boarding situation with my USCG Masters license.
There has been a lot of licensing changes in Canada and I'm not up to date on these changes. But I don't believe there is a problem having a Canadian licensed skipper on a non-US flag vessel, say in the Caribbean. If your boat is going to be carrying paying passengers in US waters, that would be problematic. Even a BYA (British) certification is not acceptable in the US for carrying passengers.
Your biggest concern IMO is ensuring your insurance company has a chance to vet your skippers qualifications and covers your vessel for the geographic area you plan to cruise with him aboard.
You need to satisfy yourself that not only is the Captain to whom you are entrusting such a major investment is competent to drive the boat but to also maintain ALL the systems including electronic, electrical and propulsion. His CV and references should give you a good feel for his background, experience and capabilities. He should also be experienced in hiring and managing crew in an offshore environment. International experience is important as well.
It is a good idea to have who ever you select be present at as much of the fitting out of the new boat as possible. His familiarity with the systems on the new boat from fitting out will be a big help in identifying the many small issues that come up during and immediately after commissioning and working with the builder to resolve problems.
It helps if he or she is easy to get along with, too!
One word of caution... if you plan on entering state waters in the US within 3-6 months or less of taking offshore possession of your new boat, be very careful of the state sales tax laws. I know from personal experience that you can unwittingly be liable for sales tax even though the boat was not purchased in that state. Ensure it has been documented to be outside of state waters continuously for the requisite period of time.
Sorry for the long answer... hope it helps... Good luck with your search... Capt Phil

[toddsgirl0323]

Wow, thanks for the advice everyone. I will get legal help...lol, it is so complex.

Phil, 3-6 months without entering the states? that really throws my time table. what a poop show...what if i registered it in canada, are they going to make me pay tax in every state I go through?!

[Capt Phil]

Depends on where you are buying it. The 3-6 months was a range because I don't know what the rules are for all the states. I'm not familiar with Florida tax rules for example, but if you purchase a boat outside of California and try and bring it into the state within the 90 day period from date of purchase, you may well be liable for CA state tax. I mention that just to alert you that there are traps to run before you bring a boat into the US even if it is foreign built. Depends on what you are going to use it for. Foreign flagged vessel do require cruising permits which are fairly straightforward to obtain and are good for a year, as I recall. Your skipper should be aware of these requirements. I mention these issues not to advise you but to make you aware of some of the issues, particularly if the vessel is of high value.
Other posters who have responded have advised you to get tax and legal advice which is a good idea IMO. Any of the title companies operating in Miami who deal with caribbean registrations like the Cayman Islands, can advise you who to talk to and were fairly reasonable as I recall... Capt Phil

[Pelagic]

As a retired Super-yacht Captain, project manager and Owner’s rep on new builds and acquisitions, I may be able to give you some advice on flag decisions as it relates to the crewing and business management of this asset.

Most large yachts are flagged in UK ensign countries of convenience, like Caymans, Belize, Grenadines..etc and follow MCA “yacht standard” rules for manning and inspection, but they are fairly relaxed and more based on the Owner’s and Insurance company’s comfort level with the captain.

At a value of under $2m, your boat’s size and tonnage may not even make this an issue?

What is the registered Tonnage and length over all?

Big question is whether the vessel will become a commercial yacht for charter as that imposes tighter regulations wherever you go. Not only in the US!

But there are ways to legally get exemptions and structure the charter contract... if it is being used for a specific project as often happens in the movie industry, when it is being used as a “prop boat”

[toddsgirl0323]

Interesting, thank you.

we will be using it as a set, but in off months we want to charter with it in the caribbean and keep it working. Thoughts?

[Capt Phil]

Provided you don't bring it in to the US for charter with an offshore licensed skipper you are probably OK. Pelagic sounds like he has experience with the kind of duty the vessel will be employed in... sources like him should be heeded.
I had no problem bringing a non-charter foreign vessel in to the US with a USCG Masters license. Capt Phil

[toddsgirl0323]

Whatever happened to being citizens of the world!???

Is there any country from which I can charter with any captain form any country I want? LOL, every country has so many rules about who is allowed to do what. what a bunch of BS. Do they monitor it well? I mean, what are the chances of someone boarding and inspecting my captain and where he hails from? and does it matter if he is my friend and not a paid employee?

Do people from different countries never go sailing together?

Sorry for my ignorance...just so much red tape. Any suggestion on lawyers? no one around here would have any experience in boating and international law, I am about as landlocked as it gets here!

[Victory49]

Sounds like what you are doing is very cool! I'd had a similar idea a while back- wish you luck!
You don't need a us licensed captain if you are not chartering- your cAptains qualifications would be checked by your insurance company, but not the coast guard. If you self insure, anyone can captain at all!
If you have paying passengers, then you need a captain licensed by the uscg, who has the qualifications for the tonnage of your boat. There are also lots of other requirements for chartering with more than 6 paying passengers in us waters, it is not real easy to do. 6 or less is straightforward.
I'd agree that a maritime lawyer would be a good person to check with as you plan- I bet there are some in Seattle who could help with the us/Canada thing
I'm no expert, but I am a uscg licensed captain who used to be in the charter busines
Good luck!

[tropicalescape]

For what its worth my boat was built in canada and is documented(uscg) but I have no coastwise sign off so I think that means no paying passingers allowed in the USA ..I think thats what it means.Good luck on your venture if you need a airborne camara man send me a pm I have lots of experiance and use very inexpensive and portable areial platforms and will work for less than union scale as long as ther is no union to up set.Thanks DVC... ps. I have worked on many high end productions such as The Patriot w/Mel Gibson,The Color Purple,Cold Mountain and many other custom set designs for clothing manufactors and home fashion publications.

[Noname]

If you haven't paid for the boat yet you may considering "chartering" a yacht when and where you need it for the production. Lots of charters out there. Just a thought..