Flagging Vessel

[rpelton]

We are going to purchase a boat in international waters and plan to sail Portugal and the Med. We plan to Flag non vat, such as Cayman or Channel Islands.

Has anyone used a company they'd like to recommend for Flagging?

Thank you!
Bobby

[huramentzefix]

there is no such thing as purchasing in international waters.
A contract to be legaly recognised has to have a date, a location and a signature.
Other than "planet earth" or "above the fish".


Check for legal requirements of sales contracts in the european union.
no country supports tax-evasion.



You are limited to a certain amount of time within europe when not european flagged.
So you will have to go to africa then ... (probably not a bad choice)
Where are you going to sell the boat then? No european is going to buy it, no north american either ...
What you think to have saved on the taxes you will loose twice on the boat.


An UK boat you can only sell in the UK. Or not stay anywhere for long ...
The Current nine EU candidate countries are Montenegro, Albania, Bosnia and Herzegovina, Georgia, Moldova, North Macedonia, Serbia, Turkey and Ukraine



You can go Dominican Republic though.
We are promoting recreational boating at the moment and you can get a dominican title and flag tax-free. But we need to see the boat here.
Reach out if you need help.

[jzk]

Originally Posted by huramentzefix

You can go Dominican Republic though.
We are promoting recreational boating at the moment and you can get a dominican title and flag tax-free. But we need to see the boat here.
Reach out if you need help.

Let's say I buy a catamaran in France that I want to use in the Caribbean, Bahamas and US. Can I flag it in the Dominican Republic? What are the costs? What is required on an annual basis?

Thanks!

[SailingHarmonie]

Originally Posted by huramentzefix

there is no such thing as purchasing in international waters.
A contract to be legaly recognised has to have a date, a location and a signature.
Other than "planet earth" or "above the fish".

Actually this is WRONG. You know not of which you write, although you do state it very emphatically.

There are many vessel sales that are made “offshore”. The usual reason is that US citizens are prohibited from buying a foreign flag vessel inside the USA. I suspect this is the case with the OP.

The usual solution to this silly problem is to just sail the boat outside US territorial waters and consummate the deal there. 100% legal, and happens all the time. It has nothing to do with tax evasion, and nothing to do with the vessel’s ultimate flag state registration.

Many boat sales are concluded 3.5 miles off the coast of Florida for this reason.

[huramentzefix]

Originally Posted by jzk

Let's say I buy a catamaran in France that I want to use in the Caribbean, Bahamas and US. Can I flag it in the Dominican Republic? What are the costs? What is required on an annual basis?

Thanks!

Sorry for my late reply.
I was talking to the commandante de la marina de guerra in samana.
Your boat can be flagged at no taxes.
They want to boost recreational boating in the country.
I believe the registration has to be renewed every year.
That could be a small fee, I need to find out.


But if you buy your boat in France you will be subjected to sales-taxes or not?



To leave the boat here in the water costs you in Luperon probably 20$USD a month. They call it hurricane hole because it is safe.


If you need a marina, there are about 20 in the country to chose from.
One friend of mine had been charged 300$/Month in Santo Domingo (dirty river but in the center of the historic town, lots of bars restaurants and nightlife).


the Dominican Republic and Haiti have beautiful cruising grounds.
And you can't park a boat anywhere cheaper in the caribbean.

[rpelton]

Is this a private sale? If so, you can go to international waters to complete the sale. I would be hesitant to do this, because of documentation and perceived legitimacy as seen by other countries. A better and widely recognized way of doing business (and what we did) was go to a location that is VAT free and work with a company that can help with the paperwork. We went to the Channel Islands with the seller, Guernsey, specifically. There we used Ocean Skies Yacht Registration to walk us through the process. We found them to be very affordable (about $2,000) and they took care of EVERYTHING. We flagged it VAT free in Jersey (UK); they have other VAT free places you can register it, including Cayman. They also set me up with a ship's radio license.

https://oceanskies.com/

I highly recommend this company and have not affiliation.

Good luck!

[boatpoker]

Originally Posted by rpelton

We are going to purchase a boat in international waters and plan to sail Portugal and the Med. We plan to Flag non vat, such as Cayman or Channel Islands.

Has anyone used a company they'd like to recommend for Flagging?

Thank you!
Bobby

Citzenship can make a significant difference ... We don't know yours.

[rpelton]

We are US. We plan on working our way through Portugal and Spain and then into the Med, for now. So we have to deal with Schengen (90 day) and Customs (18mo) requirements.

[Tupaia]

Originally Posted by rpelton

Is this a private sale? If so, you can go to international waters to complete the sale. I would be hesitant to do this, because of documentation and perceived legitimacy as seen by other countries. A better and widely recognized way of doing business (and what we did) was go to a location that is VAT free and work with a company that can help with the paperwork. We went to the Channel Islands with the seller, Guernsey, specifically. There we used Ocean Skies Yacht Registration to walk us through the process. We found them to be very affordable (about $2,000) and they took care of EVERYTHING. We flagged it VAT free in Jersey (UK); they have other VAT free places you can register it, including Cayman. They also set me up with a ship's radio license.

https://oceanskies.com/

I highly recommend this company and have not affiliation.

Good luck!

Bit confused here; if the boat was previously in any of the surrounding countries UK, France, Belgium, EU then the vessel would likely have been VAT paid in any of those countries. By conducting the sale in a non UK/EU country the vessel would loose it's VAT paid status (in UK or EU).

If you purchased a vessel in the EU from an EU citizen it would already be VAT paid and you would have avoided the need to leave the EU every 18 months.

Flag or registration has no relevance to tax status.

[Gudgeon]

Check with Wenthur law group in San Diego.

[Statistical]

Originally Posted by Tupaia

Bit confused here; if the boat was previously in any of the surrounding countries UK, France, Belgium, EU then the vessel would likely have been VAT paid in any of those countries. By conducting the sale in a non UK/EU country the vessel would loose it's VAT paid status (in UK or EU).

If you purchased a vessel in the EU from an EU citizen it would already be VAT paid and you would have avoided the need to leave the EU every 18 months.

Flag or registration has no relevance to tax status.

Exactly this. Trying to avoid non-existant taxes could result in huge penalty in any future resale. Any European is going to discount fair market value by VAT if the boat has lost its VAT paid status.

The OP is trying to ask for an open ended generic answer for a question that is super specific to details.

What country is the boat currently located?
What is your citizenship?
Where do you intend to use the boat and for how long?
Is the VAT paid (if applicable)?
How long do you intend to keep the boat and where is it likely you will intend to sell it in the future?

[Dockhead]

Originally Posted by huramentzefix

there is no such thing as purchasing in international waters.
A contract to be legaly recognised has to have a date, a location and a signature.
Other than "planet earth" or "above the fish".

As others have pointed out, this is not correct. Executing a purchase-sale transaction of a yacht is often done in international waters, with careful logging of the location and time of the execution of the documents. Did it myself a couple of years ago.


There are different reasons for doing this, most of them tax related.

[Dockhead]

Originally Posted by rpelton

We are going to purchase a boat in international waters and plan to sail Portugal and the Med. We plan to Flag non vat, such as Cayman or Channel Islands.

Has anyone used a company they'd like to recommend for Flagging?

Thank you!
Bobby

Note that the flag and VAT are completely unrelated -- nothing to do with each other.


You can flag a non-VAT paid boat in any country, including the UK and Poland (two favored European flags). And you can sail it in EU waters provided you are not an EU tax resident (and you can't sail any non-VAT paid boat in EU waters if you're an EU tax resident, without any regard whatsoever to the flag, which is irrelevant).



For a UK flag on the Part 1 registry, you need a UK mailing address (easy and cheap to rent), need to be citizen of a list of approved countries (US is OK), and you will need to get a tonnage survey if the boat was not previously UK flagged. You don't need a company; it's totally straightforward and done online.


Poland is even simpler, and that's an EU flag.


I wouldn't bother with BVI, Caymans, etc. There isn't any advantage.

[BonefishGuru]

Originally Posted by Dockhead

Note that the flag and VAT are completely unrelated -- nothing to do with each other.

You can flag a non-VAT paid boat in any country, including the UK and Poland (two favored European flags). And you can sail it in EU waters provided you are not an EU tax resident (and you can't sail any non-VAT paid boat in EU waters if you're an EU tax resident, without any regard whatsoever to the flag, which is irrelevant).

+1 VAT and flag are completely unrelated

[Montanan]

Originally Posted by Tupaia

Bit confused here; if the boat was previously in any of the surrounding countries UK, France, Belgium, EU then the vessel would likely have been VAT paid in any of those countries. By conducting the sale in a non UK/EU country the vessel would loose it's VAT paid status (in UK or EU).

If you purchased a vessel in the EU from an EU citizen it would already be VAT paid and you would have avoided the need to leave the EU every 18 months.

Flag or registration has no relevance to tax status.

Also, bit confused as your profile states location is Baltimore. If you purchase a boat in the USA then you may be subject to State Sales/Use taxation on the purchase, and / or importation tariff if it is a foreign non-duty paid vessel when you enter the USA. 50 States, 50 sets of rules. Devil in the detail as others have stated.

Also, note that if the vessel is not VAT & duty paid in the EU it can't be offered for sale in the EU without having paid VAT and duty paid. It is not free for commerce. Sailing out of EU waters into international waters and then returning to the EU does not qualify as an export because the vessel did not go to a foreign place or port. If the vessel does travel to a foreign place or port out of the EU customs territory, then reenters to the EU it will have been reimported and subject to standard customs clearance.

You really need to know the details of the status of the vessel and the laws of the location it is resides.*

Flagging is simply providing nationality to a vessel, has nothing to do with taxation. There are "open" registries that one could pursue or if you are an American citizen then you could pursue flagging it as a USA vessel.