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Old 21-11-2017, 08:32   #1
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Buying a foreign flagged boat in another foregin flagged land?

I'm American, but considering buying a boat in Malaysia. The boat is currently foreign flagged in the UK.

My plan is to keep the boat in SE asia between Malaysia, Thailand, and the Philippines and wondering some consideration I need to keep in mind or recommendations.

For example, is it as simple as:

- the current owner deflag, give me a bill of sale and proof of deflagging..
- submit USCG paperwork
- keep the boat in Malaysia as home base where it currently is
- if sailing it to the US at some point I may need to pay state taxes depending on where I end up

Also:
- any benefit of me registering it in Malaysia vs the USCG?
- do I need to verify any VAT, taxes, etc from the current owner?
- how would I go about determining if there is a lein on the boat?

Any experiences/recommendations would be much appreciated!
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Old 21-11-2017, 10:01   #2
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Re: Buying a foreign flagged boat in another foregin flagged land?

There should be no need to de-flag it. I'd suggest not to worry about that part.

The UK flag is considered a good one all round, and the costs & requirements for keeping it are fairly lightweight ... So that should probably be the least of your concerns with a new boat ... :-)
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Old 21-11-2017, 11:27   #3
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Re: Buying a foreign flagged boat in another foregin flagged land?

The only practical reason for re-flagging (I guess you really mean re-registering) a boat is if you as the new owner is not eligible to keep the registration (say if there is a residence or citizenship issue, as I believe there is with an American keeping UK registration in the Registry of British Ships). Legally, you do have to transfer the ownership with the registration authority and if youíre not eligible they will require the previous owner to de-register (you canít de-register someone else, otherwise crooks would do that all the time).

An emotional reason to re-register is wanting the boat to represent a country you care about.

If that doesnít matter to you, which is cheaper, US or Malaysian? Neither matters if you return with the boat to the US, as youíll need to pay local taxes then and they donít depend on the flag of the boat.

You can check for liens against the boat by checking itís current registration - any mortgages on the boat will be shown. Those are the only ones you need to worry about.

All that said, the UK registration is an easy and inexpensive one to maintain and your UK ships radio licence is free. But you do need to qualify, so check the rules. Is the boat registered in the UK proper, or one of the offshore ports like Jersey or Isle of Man? If the latter, there may be a few more options to qualify for UK registration.
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Old 21-11-2017, 17:29   #4
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Re: Buying a foreign flagged boat in another foregin flagged land?

Quote:
Originally Posted by fxykty View Post
The only practical reason for re-flagging (I guess you really mean re-registering) a boat is if you as the new owner is not eligible to keep the registration (say if there is a residence or citizenship issue, as I believe there is with an American keeping UK registration in the Registry of British Ships).
This! UK Registry requires either UK residency or UK citizenship. So the OP will have to get the veessel de-registered and register it in another country.
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Old 22-11-2017, 07:54   #5
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Re: Buying a foreign flagged boat in another foregin flagged land?

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Originally Posted by StuM View Post
This! UK Registry requires either UK residency or UK citizenship. So the OP will have to get the veessel de-registered and register it in another country.
If he wanted to keep the UK flag, he could set up a UK-registered company for the purpose of owing the boat.

He would own he company, and the boat would be registered in the name of the company.

Such an approach would be common for bigger boats, and/or if the plan is to get into the chartering business...

But if the boat will only be used in Asia, probably nothing beats a Langkawi registration for cost and simplicity..!
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Old 22-11-2017, 11:15   #6
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Re: Buying a foreign flagged boat in another foregin flagged land?

Most thinks are possible, just needs very specific research. I am a British citizen, living in Switzerland (non EU) who bought an Austrian (EU) flagged yacht that was based in Turkey (non EU). I had it deregistered from Austria and registered in the UK.
Most critical is to get the original sale (or certified copy) showing that value added tax (or equivalent ) has been paid. If the orginal sale from new was in the UK or EU (or many others) some purchase tax will have been paid. Proof of this is invaluable both to you and any future owner.
Good luck.
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Old 22-11-2017, 21:24   #7
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Re: Buying a foreign flagged boat in another foregin flagged land?

Been there done that
British citizen aussie resident bought a Finnish yacht in Malaysia with Belgium flag
De-registered Belgium flag re-registered with Langkawi International Yacht Register moored her in Langkawi very cost effective and no tax
Beer and cigarettes tax free too
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Old 22-11-2017, 22:01   #8
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Re: Buying a foreign flagged boat in another foregin flagged land?

Thanks all... pretty straightforward by and large.

I'm looking for the easiest/hassle free option (not creating a shell entity in the UK), so it's either USCG registered vs Langkawi/Malaysia in terms of what route I do (not sure there any pros and cons of each except whatever difference in cost?). I believe the owner purchased the vessel new in Malaysia (but French built).
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Old 25-11-2017, 19:55   #9
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Re: Buying a foreign flagged boat in another foregin flagged land?

As an American citizen buying a boat outside the US, I would suggest two Bills of Sale - they will be different, and for different reasons.
1. Draw up a bill of sale containing all the information both you and your insurance company want, and get it notarized.
2. Download DoT form CG-1340, which is the official USCG Bill of Sale. It's a simple one page document requiring specific information that the USCG wants, and should save you a lot of grief, especially if the boat comes back to the US.
3. Both these documents need to be notarized, and preferably at a US consulate, where both buyer and seller need to appear. Even if you have to travel a considerable distance to the US consulate, get an appointment and make the effort - it is especially important for CG-1340.
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Old 27-06-2018, 13:19   #10
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Re: Buying a foreign flagged boat in another foregin flagged land?

To register (document) the vessel in the USA, I believe you have to import her. This means paying the import duty (currently 1.5% of the purchase price) Also, you need to be able to prove that the engine(s) in the boat meet EPA admissions standards for the years they were manufactured. See the EPA Form 3520-21. This has recently emerged as a real headache in some cases. (See https://www.denisonyachtsales.com/20...in-u-s-waters/ )
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