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Old 14-02-2020, 08:33   #61
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Re: Buying Yacht as non-US resident - help !

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Originally Posted by AndrewA2 View Post
Im still unclear what the advantage/need would be to register the boat in MS if that is indeed the temporary "home base" state if I adhere to cruising permit requirements?

It's not an "advantage". You have to register it there if you want to keep it there.
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Old 14-02-2020, 08:48   #62
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Re: Buying Yacht as non-US resident - help !

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Originally Posted by WindwardPrinces View Post
It's not an "advantage". You have to register it there if you want to keep it there.
but "keep" would be defined as longer than the cruising permit allows - correct?

So as long as the requirements of the cruising permit are adhered to, there would be no need to register in any US state (as far as i can tell)?

Once again - this would be for a foreign purchased and flagged vessel.
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Old 14-02-2020, 10:17   #63
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Re: Buying Yacht as non-US resident - help !

Here is my personal experience on a 2017 $600k catamaran.


Purchased an IBC (like an LLC) in Belize for $800 ($600 annual renewal)
Purchased vessel under the Belize company name (I am listed as director)

Registered the vessel in Jersey Channel Islands (red ensign) one time fee $1500 thru agent.
10 year registration came with 10 year radio license


Vessel has been in states on and off for 3 years. I just keep getting a new cruising permit. Have not had any issues getting a new permit. Vessel is kept in a US marina when in US. Cruising permit is good for 1 year. Just need to leave for 14 days prior to the year being up. Come back and get a new one.


Most states have a 90 day limit. Simply sail to another state, fuel up, get receipt, come back. You are within the state and cruising permit requirements. No need to register with the state. Being in MI, going to another state to fuel up once every 3 months is easy.
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Old 14-02-2020, 10:28   #64
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Re: Buying Yacht as non-US resident - help !

Hello,

Relevant CBP rulings: https://rulings.cbp.gov/search?term=%22undocumented%20American%20pleasure% 20vessel%22&collection=ALL&sortBy=RELEVANCE&pageSi ze=30&page=1

Are you aware about actual court cases which overrule the above? Please post it here. This will help a lot. Thank you!

After owning a state titled vessel as a Canadian citizen who used to live in the USA on TN visa my understanding of the situation is:

1) LLC ownership is a good idea. LLC is easy to set up; separate income tax reporting is not required as long as the LLC is limited to owning a pleasure vessel; it will not help to avoid the initial sales tax (if there is one in the jurisdiction you keep the boat) but there will be no sales tax once you sell your boat since you will be selling the LLC and not the boat; hence, it is a good idea to buy a boat which is already owner by LLC - worth researching local state DOL and DOF on this subject.

2) USCG Documentation to fly USA flag ("USCG documented vessel") - the owner of the vessel must be US citizen(s); in case of an LLC it is based on who controls the LLC. As long as UK citizen owns/controls the LLC - the boat can not be USCG documented and will be treated as "undocumented pleasure vessel" by US authorities. The "undocumented American pleasure vessel" status will not be allowed since it requires the same ownership condition to be met as USCG documented vessel.

3) State registration is based on how much time the boat is located in state waters. States don't care where boats are titled or documented or registered when it comes to state registration, in particular the states collecting use tax on pleasure vessels. Same as #1 above - contact local DOL and DOF for details.

4) State title. This is when it is a bit shady for me personally, since my boat is registered and titled in the same state (for ref: state of LLC registration is also the same). But... my understanding is that you can (in some cases 'have to') register your vessel with a state even it is titled (documented) somewhere else. For example: USCG documented vessel will be registered with the state but no state titled since the USCG documentation is replacing it. Researching this topic only required if you plan to keep the boat in USA but title it (document, register) under foregihn flag.

5) Clearing in and out of US port within US waters using CBP form 1300 and paying the fee of $19 every time you move ports within US. Only USCG documented vessels and 'undocumneted American pleasure vessels' and vessels with cruising license are exempt from this procedure. You will have to follow the procedure of filling form 1300 every time you move ports in the USA if your vessel is owned by an LLC controlled by a UK citizen. No need in form 1300 if you go for a local sail within the aquatory of the same US port - no ports are changed and you return back to your home slip. A cruising license may be granted as an exclusion if you have a residency status in the USA. You need to contact the local marine CBP office and discuss this topic with them directly.

6) Cruising license - unlike USCG documentation (flagging the vessel) which is based on the citizenship of the owners, cruising license is based on the "vessel flag" (country of vessel registration). So, if your vessel is state registered without any other foreighn resigtration it is "unflagged" vessel or 'undocumented foreighn vessel' hence cruising license can't be issued. A local CBP marine office may issue a cruising license on a case by case basis as long as the vessel is registered with the state and the owner has a status in the USA and of cruising license eligible citizenship. You may like to research an option of flying a UK flag (title your vessel in UK) and import it to USA to be registered with a state. This way you will be eligible for a cruising license and will not need to pay VAT as long as you are not sailing to the UK (EU waters are tax safe now due to Brexit; not sure about UK offshore territories).

The legal limbos as I see them are:

a) Vessel flagging is based on owners' citizenship while cruising license eligibility is based on the vessel flag. As a result: UK citizen who owns state titled vessel in USA treated by CBP as 'undocumented foreighn pleasure vessel' and must follow form 1300 clering in/out within USA waters.

b) LLC "residency" is ignored by CBP. An LLC registered in one of the states is 'US domicile'. I do understand why USCG is going as deep as the citizenship of the LLC owners - vessel flag grants legal status, state and navy protection. However, using the same rule for the purpose of clearing in/out of ports is an overkill for the cases when the LLC is US domicil and the vessel has been customs cleared in USA and the LLC owners are citizens of cruising license eligible countries.

Perhaps interested readers of this forum may crowdfund a maritime lawyer who may help to get resolution on the above? Unless I am misunderstanding and the answer is already there...
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Old 14-02-2020, 10:37   #65
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Re: Buying Yacht as non-US resident - help !

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Originally Posted by AndrewA2 View Post
but "keep" would be defined as longer than the cruising permit allows - correct?

So as long as the requirements of the cruising permit are adhered to, there would be no need to register in any US state (as far as i can tell)?

Once again - this would be for a foreign purchased and flagged vessel.
I suppose that's true if you don't mind the inconvenience of moving it every 90 days to a different state.

But you can hardly blame the authorities if they decide to hassle you at some point for avoiding their sales/use taxes.
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Old 14-02-2020, 11:17   #66
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Re: Buying Yacht as non-US resident - help !

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Originally Posted by WindwardPrinces View Post
I suppose that's true if you don't mind the inconvenience of moving it every 90 days to a different state.

But you can hardly blame the authorities if they decide to hassle you at some point for avoiding their sales/use taxes.

Also add cost/benefit part of one time payment of a state tax + annual use tax vs cost of maintaining the offshore LLC. I can see the benefits for vessels $600k or $1mil +. But there may be more hustle with a $200k vessel. Convenience and freedom of mobility are crucial factors.
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Old 14-02-2020, 11:40   #67
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Re: Buying Yacht as non-US resident - help !

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Originally Posted by badadim View Post
a) Vessel flagging is based on owners' citizenship while cruising license eligibility is based on the vessel flag. As a result: UK citizen who owns state titled vessel in USA treated by CBP as 'undocumented foreighn pleasure vessel' and must follow form 1300 clering in/out within USA waters.

b) LLC "residency" is ignored by CBP. An LLC registered in one of the states is 'US domicile'. I do understand why USCG is going as deep as the citizenship of the LLC owners - vessel flag grants legal status, state and navy protection. However, using the same rule for the purpose of clearing in/out of ports is an overkill for the cases when the LLC is US domicil and the vessel has been customs cleared in USA and the LLC owners are citizens of cruising license eligible countries.

Only two things matter, citizenship of the captain/person doing the paperwork and flag of vessel. The CBP doesnt care about the company if a company owns the vessel. As stated, a cruising permit allows one to come and go as they please. The first time I tried calling CBP at a US port after arrival from another US port in a different state, once I told them I had a cruising permit, they didnt care who I was and wanted off the phone.


I have only been boarded once because they had newbees they wanted to train. As soon as they saw the cruising permit and my red ensign flagged papers. They didnt really care.


Had I registered with Langkawi, this would be a totally different topic as they are not one of the 20 countries on reciprocity list. If you plan to get a cruising permit, make sure you flag with a country that is TOP of the easy list.


A friend of mine went down the BVI path. The initial setup costs were $6k and the annual upkeep is $1500. This would not be worth it at all.
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Old 14-02-2020, 11:53   #68
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Re: Buying Yacht as non-US resident - help !

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Originally Posted by stevenm2016 View Post
Only two things matter, citizenship of the captain/person doing the paperwork and flag of vessel. The CBP doesnt care about the company if a company owns the vessel. As stated, a cruising permit allows one to come and go as they please. The first time I tried calling CBP at a US port after arrival from another US port in a different state, once I told them I had a cruising permit, they didnt care who I was and wanted off the phone.
You are correct. The purpose of the cruising license is to exempted you from 1300 port to port clearance in the US waters. Once you have it you are all clear an no need to call CBP until you leave USA and come back again.

Also correct that all what matter is the vessel flag. The cruising license process is very simple as long as the vessel is flagged in the eligible country. However, in case when an alien owns a US state titled pleasure vessel and it is not flagged in any other country, CBP treats this vessel as "undocumented foreign pleasure vessel" and will not issue a cruising license even the citizenship of the owner or a skipper is from an eligible country. A case by case exception outside of the regular process is possible for those who have a visa status in USA (resident alien).
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Old 14-02-2020, 11:56   #69
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Re: Buying Yacht as non-US resident - help !

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Originally Posted by stevenm2016 View Post
Here is my personal experience on a 2017 $600k catamaran.


Purchased an IBC (like an LLC) in Belize for $800 ($600 annual renewal)
Purchased vessel under the Belize company name (I am listed as director)

Registered the vessel in Jersey Channel Islands (red ensign) one time fee $1500 thru agent.
10 year registration came with 10 year radio license


Vessel has been in states on and off for 3 years. I just keep getting a new cruising permit. Have not had any issues getting a new permit. Vessel is kept in a US marina when in US. Cruising permit is good for 1 year. Just need to leave for 14 days prior to the year being up. Come back and get a new one.


Most states have a 90 day limit. Simply sail to another state, fuel up, get receipt, come back. You are within the state and cruising permit requirements. No need to register with the state. Being in MI, going to another state to fuel up once every 3 months is easy.

That is exactly what I needed to hear !!
Thank you !!!

Have you taken your vessel to EU at all? Curious to hear if there are any issues with that, or VAT implications?
Knowing Brexit is changing things I am not overly concerned right now, especially as my plans to visit that area are not for another 4 years or so. But would like an understanding now just to have some idea in case things change
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Old 14-02-2020, 12:14   #70
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Re: Buying Yacht as non-US resident - help !

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Originally Posted by stevenm2016 View Post
Registered the vessel in Jersey Channel Islands (red ensign) one time fee $1500 thru agent.
10 year registration came with 10 year radio license
Steven, is Jersey Channel Islands considered UK from the US cruising license prospective?

https://www.law.cornell.edu/cfr/text/19/4.94

United Kingdom and the Dependencies: the Anguilla Islands, the Isle of Man, the British Virgin Islands, the Cayman Islands, and the Turks and Caicos Islands
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Old 14-02-2020, 12:16   #71
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Re: Buying Yacht as non-US resident - help !

Quote:
Originally Posted by stevenm2016 View Post
Here is my personal experience on a 2017 $600k catamaran.


Purchased an IBC (like an LLC) in Belize for $800 ($600 annual renewal)
Purchased vessel under the Belize company name (I am listed as director)

Registered the vessel in Jersey Channel Islands (red ensign) one time fee $1500 thru agent.
10 year registration came with 10 year radio license


Vessel has been in states on and off for 3 years. I just keep getting a new cruising permit. Have not had any issues getting a new permit. Vessel is kept in a US marina when in US. Cruising permit is good for 1 year. Just need to leave for 14 days prior to the year being up. Come back and get a new one.


Most states have a 90 day limit. Simply sail to another state, fuel up, get receipt, come back. You are within the state and cruising permit requirements. No need to register with the state. Being in MI, going to another state to fuel up once every 3 months is easy.

Michigan law allows owners of watercraft registered in another state use of Michigan waterways up to 60 days after which a Michigan registration is required. That means if a boat is stored or anchored in Michigan, and exclusively used on Michigan waterways over 60 days, the watercraft must be registered in Michigan.

It may be that you've just been lucky. So far.
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Old 14-02-2020, 15:03   #72
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Re: Buying Yacht as non-US resident - help !

Easiest and cheapest solution is a Delaware Corp. Any nationality can own one. The only thing you as a non-US citizen cannot do is USCG document the vessel. You can state title it in any state, but will have to pay state sales tax, of which Delaware has none. If you keep the vessel in Florida for more than 180 days you can be charged "Use" tax if you can't prove you paid state sales tax somewhere else, YO"u may need to move the boat around the Gulf abit once in awhile, but I know numerous Europeans who use Delaware or any other sales tax free state, Rhode Island, Nevada, Wyoming, to name a few.
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Old 14-02-2020, 17:51   #73
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Re: Buying Yacht as non-US resident - help !

Your inquiry in this forum may bring about many opinions based on experience or maybe opinions based on conversations at the club, but the advice may be worth only what you’ve paid. A wise investment would be retaining an attorney who specializes in this area. It’s a specialized area which would be unfamiliar to most general practice attorneys. The local bar association may be able to recommend a firm with experience in this area.
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Old 15-02-2020, 04:43   #74
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Re: Buying Yacht as non-US resident - help !

Likely you have never heard of it but Langkawi registration is probably best for you.

It requires least fees and is simple. My vessel is now registered there. I just had to supply delisting from US registration.

It is a romantic notion to think the Royal Navy will go out of there way just because of the flag. Fact of the matter is they will stop for you no matter what your nationality of flag if you are in distress.
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Old 15-02-2020, 04:59   #75
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Re: Buying Yacht as non-US resident - help !

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A US LLC may also not be an option as the corp has to be majority owned by US citizens, and that includes a majority of the board members. At least that is my understanding.
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Originally Posted by s/v Jedi View Post
The LLC works. You hold all the shares but hire director and secretary from the lawyers office that handles everything for you.

But when you are a permanent resident in one state, I think it is illegal to erect an LLC in another state with the purpose of registering boats, motor homes etc. in the LLC to avoid tax. When OP would not have been a permanent resident (we are seasonal residents, i.e. tourists) then this would work.

Laws are complicated... we own property in Florida, pay Florida tax and are Florida residents, can even buy guns in FL. But we’re still tourists for where the Federal Government is concerned. Our boat is our primary residence and it’s Dutch and mostly outside the US.
Loads of foreign owned LLCs in Delaware used exclusively for the purpose of registering (not USCG Documenting) boats in the USA. Perfectly legal. The citizenship requirement only applies to Documenting a vessel.
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