Buying a boat in Grenada

[JohnEvans]

Hi, my first post to the forum (I think). I am seriously considering purchasing a boat that is currently based in Grenada. I plan to leave her there for a couple of years and use Grenada as a base for a couple of trips a year until we are ready to cast off the lines and head ... well, wherever the wind takes us.

The sellers broker has suggested that we transact the deal in international waters before returning to Grenada ... assuming surveys etc etc check out ok.

My question is, what kinds of pitfalls do I need to watch out for? Since this is a used boat sale, I don't think VAT would be applicable (so not sure why we would need to transact in international waters), any advice on how to confirm this?

Also if we close the deal in international waters, what kind of paper work would I need to re-entre Grenada, since we would have departed Grenada only very briefly, and likely not have checked out.

I plan of registering the boat in the BVI (I am dual US/UK citizen), but I expect that process will take some time - I believe that I would register the boat after I have closed the deal, but don't know if there is a time limit to when that must be done, nor if that would add complexity to re-entering Grenada after closing the deal.

So given my scenario, does anyone have any sage words of wisdom to help me navigate around any legal or bureaucratic whirlpools that may sink me?

Thanks in advance

John

[Montanan]

Originally Posted by JohnEvans

I am seriously considering purchasing a boat that is currently based in Grenada. I plan to leave her there for a couple of years and use Grenada as a base for a couple of trips a year
The sellers broker has suggested that we transact the deal in international waters before returning to Grenada ... assuming surveys etc etc check out ok.

My question is, what kinds of pitfalls do I need to watch out for? Since this is a used boat sale, I don't think VAT would be applicable (so not sure why we would need to transact in international waters), any advice on how to confirm this?

Also if we close the deal in international waters, what kind of paper work would I need to re-entre Grenada, since we would have departed Grenada only very briefly, and likely not have checked out.

I plan of registering the boat in the BVI (I am dual US/UK citizen), but I expect that process will take some time - I believe that I would register the boat after I have closed the deal, but don't know if there is a time limit to when that must be done, nor if that would add complexity to re-entering Grenada after closing the deal.

So given my scenario, does anyone have any sage words of wisdom to help me navigate around any legal or bureaucratic whirlpools that may sink me?

Thanks in advance

John

Key questions:

Has the boat that is in Grenada, hence has by its entry been imported into Greneda, previously cleared customs and has paid import duties, fees and VAT; or has the the boat entered Grenada on temporary admission permit status, e.g. under a temporary cruising permit, and thus not of paid entry status?

You indicate that it is your intention to keep the your boat permanently in Grenada, which thence is seemingly not a temporary admission, a transient cruiser.

VAT payable on Imports
The VAT payable by an importer of record to the Comptroller of Customs in respect of a taxable import is due and payable at the time of the import.

If the boat has entered Grenada under temporary admission protocol [cruising permit] and the present owner discharges the temporary admission by departing Grenada in order to sell the boat to you, then the present owner is not required to complete the payment of duties, fees and VAT to obtain permanent import entry status, prior to selling the boat to you. If you purchase the boat outside of Grenada and then import it to Grenada, then you are the importer of record and the customs duties, miscellaneous fees and VAT will be your responsibility to pay upon entry to Grenada.

The seller's broker is trying to arrange the sale such that you have the burden of the significant costs associated with paying for entry to Grenada. This is a means of shifting the burden to the buyer.

Of issue is whether you could pursue repeated one month extensions of a cruising permit and thus keep the vessel in temporary admission status for the couple of years you intend to keep it based in Grenada. The cruising permit fee shall be paid by the master to the proper officer upon arrival in Grenada. A cruising permit is valid for one month or until the yacht leaves Grenada, whichever is sooner, but may be renewed upon application to the proper officer and on payment of the appropriate fee.
No cruising permit fee is payable for any complete calendar month during which the yacht is on the land or in dry dock.

If you pursue attempting to keep temporary admission permit for many months, it seems possible that the temporary admission status will be revoked by the customs officer. Albeit if the owner of the boat is a non-resident of Grenada then it is much more likely that temporary admission can be renewed, many times. [BVI provides for unlimited temporary admissions of non-commercial recreational boats if the owner is a non-resident.] A temporary admission typically requires to be discharged by exporting the boat from the country that has provided temporary admission status, that is to say, to have travelled to a foreign place or port [travelling to international waters and returning does not qualify as a "departure" because until the good [e.g., vessel] arrives in a foreign place or port, it has not been imported into a foreign place and thus it can not be exported by departing such place. That is how it works everywhere in the world, nothing unique about Grenada.

BTW, it appears that Grenada Import Duty would be 20% and VAT 15% of CIF value, a hefty cost, so be sure you get proper legal advise. Hire a customs broker with marine experience, that is a customs broker, not a sales broker and definitely NOT the sellers sales broker.

[JohnEvans]

@Montanan, thanks for the fast and extremely helpful response. I am confirming the status of the boat with the seller, and will update once I hear.

Now to start my search for a Grenada customs broker.

[Montanan]

Your non-resident status will be an important attribute as to garnering temporary admission status which is issued as a short period cruising permit.

Note that when the boat is put on the hard for storage that boat is not subject to a cruising permit [assumes the owner is a non-resident].

Also, it is typical that if you import a good with intent to sale it in the country then one needs to pay duty and VAT to be availed the privilege to transact in country. That is why one sees many boats advertised in the USA as specifically not offered for sale to a USA resident. The boat has to depart the USA to be sold to the a USA resident., or it has to have import duty paid so that it can be offered for sale, or subsequently actually sold.

When you depart Grenada to go cruising to other places be sure to exit properly and obtain documentation from customs of your departure, and likewise obtain documentation of entry and departure from the foreign place or port, so that you have official proof of your discharge of the temporary admission [cruising permit from Grenada] and then can return to Grenada for another month under temporary admission. Do not linger in country, else you may trigger an onerous taxation. Go sailing, don't anchor extensively in
Grenada or become a marina queen. Grenada is a good place to put your vessel on the hard for the hurricane season under temporary admission.

All the best.

[JohnEvans]

@Montanan - thanks for all the help. If I bump into you in Grenada - or elsewhere, I owe you a beer!

[Montanan]

Enjoy Grenada and the Caribbean and soon new to you boat. Would love to spend some quality time voyaging and swimming. See if you can keep the boat in temporary admission status so as to avoid the 35% expense of a permanent importation.

I am presently in The Last Best Place - Montana awaiting my second Moderna jab, then perhaps towards the end of 2021 or early 2022, hope to renew limited recreational travels. I have my daughter's wedding to contend with this coming Fall, she has opted to hold it at our remote family retreat property far up in the mountains, [an old gold mining camp] so go lots of infrastructural issues to resolve so as to be able to handle a lot of guests. List includes removing 10 very large recently beatle killed trees near the cabins, replace a 35 kW hydropowered generator so as to have lights and power; get the front end loader / back hoe and dump trucks working so as to haul rock fill and smooth the five miles of rugged mountain access road, install a new dam to ease diversion of water from the creek into the 26 inch water supply pipe for domestic water and hydropower. And of course all the usual wedding activity affairs, reminds me had better purchase a tuxedo.
Likely to only be able to get some sailing on remote alpine lakes this year in the mountains with one or the other of our trailerable sailboats. Well the lake is thawing from its deep freeze of a couple of weeks ago.

Been working almost exclusively from home for a year now, starting up two new businesses that are developing and soon to begin deploying disruptive new technology directed towards greatly enhancing the electrical power and thermal energy efficiency of large industrial sector that has relied on legacy technologies that has not changed much going on 119 years. Thus been very busy times, with little to no recreation in my forecast.

All the best.

[Stewie12]

Even if you close the deal in International waters you would have to have it notarised to be of any real use.

[PaulvR]

I would execute the transaction digitally in any domicile, and generate a Bill of Sale.

I would then present the Bill of Sale to the Immigration as the change of ownership. If there is a skipper on the boat, then he is signed off, and the new skipper signed on. The old owner may have to grant permission in writing to inform immigration of the change of skipper.

Ownership and skipper are unrelated. I have sailed many a boat that was not mine, and many have sailed my boats with a simple letter of authority from me. In these very waters.

The boat can cruise many a port on it's existing registration and can oftentimes receive a renewal for 6 months entry, as in SVG, or simply renew the (it used to be 3 months?) entry into Grenada.

also, if a boat is stored on the hard, time on the boat entry is usually stalled(Grenada ?), and the time on the hard does not accrue.

Grenada, SVG, Trinidad, are all pro-cruising, and importing is an extreme step. The last thing on my mind would be import/export. If you need to change the boat registration, get it done through Delaware in the USA by mail, 500USD for a 5 year renewable reg., or SSR in the UK if you have an address. All kosher registrations with propper Bill of Sale and supporting docs. Otherwise SVG has a simple plan you can enquire about when you are there..

Just my 5 cents, but when I started blue water sailing 30 years ago, all we needed was a printer, a potato wax stamp, and a laminating machine!!

Good luck, you've chosen an excellent part of the world, don't import it!

[SundayMorning]

It comes down to: what do you mean by being based in Grenada for a couple of trips a year. How will the boat be stored while in Grenada? Where will you go on your trips?

I purchased my boat in Grenada. It was formerly Swiss registered and I used US documentation. The deal was done on Grenada. There were no Grenada tax consequences, nor anywhere else for that matter.

If you store the boat on land in Grenada between trips, you need a 1-month cruising permit when the boat arrives and again when the boat is put back into the water. If you plan to cruise beyond Grenada you might never need to renew a permit. You get a new permit each time you return to Grenada and it doesn't need renewal as long as you either place the boat on land or depart Grenada within a month. If you wanted to store the boat in the water, I think that would be continuous cruising and need monthly permit renewals (not sure of this).

Most likely, your trips will include cruising between many islands and frequent clearing in and out. If the boat is not registered in those countries and you don't live there, I don't think there are any tax consequences; you get the equivalent of a cruising permit in each place.

Carefully consider where you register the boat because that might affect the customs and VAT consequences if you visit any territories belonging to that nation. My US-registered boat would need to pay US taxes if I enter Puerto Rico (or most US territories) but I can visit the US Virgin Islands with no tax consequence since that is a "free port". You might need to pay taxes to bring a BVI-registered boat into the BVI, if taxes have not been previously paid or if the boat has been gone long enough to loose its former tax-paid status. A foreign boat can continuously renew a cruising permit there, as previously noted.

You will eventually need to register the boat and have proper documents to travel freely between islands. I have heard that a bill of sale will sometimes suffice (at least for a short period after purchase) because documentation takes some time. I did not test that theory because I didn't want to get stuck anywhere, or stuck outside Grenada where I store my boat. I stayed in Grenada until my US documents arrived. I think the bill of sale idea might depend very much on the individual customs agents you encounter.

Finally, I would suggest fully understanding why the seller's broker suggested doing the deal in international waters. Where is the boat registered now? Where does the owner reside? What is its tax status?

Mike

[JohnEvans]

@Paulvr thanks for the post - I considered the fact that Grenada was cruising friendly, but you're input helps ease my mind. Delaware is definitely an option for registering. 30 years behind you, but trying hard to catch up.

[JohnEvans]

@SundayMorning, Mike, thanks for the input. We are definitely going to store her on the hard while not sailing, so should be good with the cruising permits. If we registered in Delaware wouldn't we still be able to sail to Puerto Rico though - so long as we weren't intending to stay?

As for the broker wanting to conduct the sale in international waters, I suspect that is just his lazy way of answering one of my questions without having to put in too much research or taking on any liability himself. I don't think the seller himself suggested it.

[SundayMorning]

Hi John,
My understanding is that the first time a US boat arrives in a non-duty free US port, taxes are due on arrival. Where is the boat registered now? Have any taxes been paid anywhere?

Regarding the sale in international waters, you are probably right that the broker is being careless. There are several brokers and former brokers on this forum (including at least one in Grenada), so maybe they can comment on the location of the sale.

I don't know of any reason any party to a sale as you describe would want to do it in international waters.

Mike

[Montanan]

Delaware is a boat registration only state and does not issue boat titles. A vessel can be registered in Delaware if Delaware is its principal place of use. You apparently are not intending to make Delaware, nor any State of the USA, your vessel's principal place of use, hence any State titling or registration is not valid. State registration [and / or titling] does not provide USA nationality as a State of the USA is not a nation state and not a party to UNCLOS.

If you are an American citizen then you could document the vessel with the USCG and then the vessel will have USA nationality for travel on international waters and entry to foreign waters.

Indeed bringing a vessel flagged with a country into that country's territory generally does invoke duty and VAT, if the vessel had not previously been imported with duty and VAT paid status and one is a resident. Exporting a duty / VAT paid status vessel for extended periods of time can result in having to pay duty and VAT anew upon returning to the country, e.g. the EU allows for up to 3 years away from the EU. Each country has its own rules and procedures as to declaring an export of the vessel before it departs, not obtaining such can lead to an onerous import duty and taxation, e.g. New Zealand and Australia are typical countries where boaties screw up and just depart to go voyaging and expect to return after an extended period away.

I believe BVI provides for renewable annual temporary admission / cruising permits if your boat is BVI flagged but the owner is not a resident of the BVI,

Basically investigate the details of each of the countries you wish to enter [import] and depart [export] as to their specific rules and seek temporary admission status by all means possible. And ditto as to utilizing a flag of convenience which may become an inconvenience.

A previous post recommended that the bill of sale be notarized, that is an import attribute and you will need one to be present at time of signing to validate your identification. If the bill of sale document is NOT notarized it will NOT be accepted as proof of purchase from any titling agency or registering agency. The bill of sale will be basically worthless.

A country of legal jurisdiction for making the offer to sale / buy, and also the actual contract for sale will need to be decided upon, even if offer to sale and / or the actual sale is accomplished in international waters. Chose wisely.

The USCG has an excellent Bill of Sale document which you can use. Be sure that the Bill of Sale has a very detailed list of ALL of the appurtenances associated with the boat, dinghy, outboard, list of sails, generator, water maker, electronics, anchors, solar panels, life boat, etc. include make, model and serial number of each and every item.

Be sure to have a current title search provided of the vessel where it is titled so as to be sure that it can be made clean and clear of all encumbrances and to receive releases of any all liens that have been recorded with such titling agency before monetary consideration is released to the seller by the escrow agent that is handling the money exchange. That means the escrow agent will transfer funds held in escrow to pay off each of the lien holders and receive written release documentation so that title can be released by the titling agency and then and only then will any remaining funds be transferred to the seller, of course the selling broker and the buyer's broker, if any will also be paid their commission before the residual funds are transferred to the seller.

Exemplary reference documents, you can also use similar documents of other country's titling agency.

Bill of Sale:

https://www.dco.uscg.mil/Portals/9/D...-09-113141-317

Abstract of title / certification of certificate of documentation:

https://www.dco.uscg.mil/Portals/9/D...-09-113141-600

REQUIREMENTS FOR INSTRUMENTS EVIDENCING
SATISFACTION OR RELEASE


https://www.dco.uscg.mil/Portals/9/D...-28-130935-320

SATISFACTION OR RELEASE OF MORTGAGE, CLAIM OF
LIEN OR PREFERRED MORTAGE

https://www.dco.uscg.mil/Portals/9/D...-01-144715-483

[Montanan]

Originally Posted by SundayMorning

Hi John,
My understanding is that the first time a US boat arrives in a non-duty free US port, taxes are due on arrival. Where is the boat registered now? Have any taxes been paid anywhere?

Regarding the sale in international waters, you are probably right that the broker is being careless. There are several brokers and former brokers on this forum (including at least one in Grenada), so maybe they can comment on the location of the sale.

I don't know of any reason any party to a sale as you describe would want to do it in international waters.

Mike

Likely because the vessel has yet to be permanently imported into the country and the seller does not wish to pay the onerous importation duties and VAT to be allowed to transact a sale in country. The vessel is likely on temporary admission and only the seller can discharge the temporary admission by exporting the vessel [the good] by removing it from the country in a timely manner, e.g. within 30 days from entry to Grenada. As buyer can not discharge a temporary admission.

This is all basic importation and exportation matters, the fact that the good is a boat does not change the importation and exportation matters. It could be bananas, furniture, a vehicle, machinery, what ever. Basic customs clearance procedures apply.

[SundayMorning]

Montanan posted some good forms and information. I highly recommend USCG documentation. Use the USCG bill of sale form to smooth the application for documentation. Use a US notary to witness the signatures since the USCG will not accept a foreign notarized document without an accompanying document (called an apostile) that you would have to obtain from the Grenadan foreign ministry. A US notary is available at the US consulate on Grenada.