Foreign Citizenship and USCG Vessel Documentation

[tardog]

I have a boat that's currently in Mexico that's a CG Documented Vessel. While sailing last season we became friends with a couple from Canada. At the end of the season they sold their boat and went home. Now we'd like to become boat partners with them. Is it possible to have a foreign citizen registered on a USCG boat? We'd like to use the boat a couple of months a year and then let them use it a couple of months. Of course, it'll cause problems with the Puerto Capitania in Mexico if they're not on the documentation and it'll make insurance impossible.

Any clues?

[Mimsy]

Nope, it is not possible unless you go to a lot of bother and through a bunch of red tape making a corporation. etc. My husband is a Brit but our boat is documented with the USCG. This is why I am listed as the sole owner on all paperwork. Heh.

[boatman61]

I'm not sure how it works in the US but in the UK a Ships divided into 64 shares...
If you sell part share ie; 30 shares it is then noted as such on the agreement/bill of sale you both sign and retain a copy of.
When you register/re whatever then as the Major Shareholder your name comes first being major share holder and therefore responsible for the vessel in the legal sense.. you'll be hit on first... so the nationality of other owners is irrelevant.. unless/until entering illegally....

[tardog]

Mimsy: So essentially your husband couldn't legally be on your boat unless you are aboard, right? He'd be unable to clear into or out of any port or reserve a slip w/o the official documentation showing he's an owner.

[Ram]

Starting a Corporation is cheap and easy -cost about $200 and you could have 3 owners /officers -and your friend could be one of them - the corp. would own the vessel- this is how I am set up and it works great-just make the US resident own the majority of shares

[tardog]

Thanks much Ram. I will pursue that course.

[Mimsy]

Yup Tardog, that's about the gist of it. I like to remind him from time to time of this fact!

Edited to add; He could carry documentation the same as a delivery captain to enter port without me aboard but we plan on being together anyway.

[boatman61]

Originally Posted by Mimsy

Yup Tardog, that's about the gist of it. I like to remind him from time to time of this fact!

Edited to add; He could carry documentation the same as a delivery captain to enter port without me aboard but we plan on being together anyway.

Aye Aye Skipper....

Just joshin...

[Mimsy]

Originally Posted by boatman61

Aye Aye Skipper....

Just joshin...

I can do just fine sailing the boat- so long as I don't have to dock it anywhere tight! lol

[hellosailor]

tardog, even if you form a corporation with the canadians, the corporations must be 51% US-owned in order to get USCG documentation.

So yes it is easy to do, but the Canadians will have to be minority owners. You might want to toss around some ideas with them and a lawyer, i.e. let them buy 49% of the shares in the corporation perhaps with the option to buy another 1% for one dollar (US<G>) if the boat is being sold? Always easier to think it out before the corp is set up.

[Mimsy]

The corp. filing costs were not the only issues we encountered. FOr our situation, we were looking at having to have an attorney do paperwork and then there were tax issues to be dealt with yearly and liability insurance was difficult with some providers wanting each owner to carry a seperate policy and wanting various licenses, etc.

I think a lot depends on where you live, where you sail, where you keep the boatetc. but before going this route be certain that all you will have to do is register a corp. one time and that is it. I might be a bit more involved than you think, it might be simple but really do your homework! Each State is very different.

[Ram]

-I might add-I did it all myself online- it was very easy and cheap it can be done for about $200 USD - I chose Delaware so there is not a sales tax issue- there is a yearly cost of about $150 USD to keep things going but that’s about it- Since I’m the only one operating the vessel my insurance is not an issue-but I think it’s just a matter of adding a person on if I wanted to - it really is not complicated at all-


[


QUOTE=Mimsy;587979]The corp. filing costs were not the only issues we encountered. FOr our situation, we were looking at having to have an attorney do paperwork and then there were tax issues to be dealt with yearly and liability insurance was difficult with some providers wanting each owner to carry a seperate policy and wanting various licenses, etc.

I think a lot depends on where you live, where you sail, where you keep the boatetc. but before going this route be certain that all you will have to do is register a corp. one time and that is it. I might be a bit more involved than you think, it might be simple but really do your homework! Each State is very different.[/QUOTE]

[SailFastTri]

You could also remove the boat from USCG documentation, and just use state registration.

In any case when you sell the vessel or change ownership, if it is registered in a US state or kept in one for any length of time (30 or 60 days usually) there is the sales or use tax issue.

[SailFastTri]

Another thought -- why not keep it in your name and work out a charter agreement with the other family? It could be long-term and include things like shared maintenance/storage costs and the ability to incorporate variable fees for mutually-agreed upgrades. Then you only need to deal with the insurance questions.

[Charlie]

Rather then use a corporation you might want to try an LLC. IT is an easier form of ownership. Also there may be some tax advantages when you sell the boat. A corporation will require that you take the boat out of the Corp at market rate whereas with an LLC you can simply transfer the boat to private ownership. Ask an attorney to be sure of what I said.