Foreign Registration by US Citizens

kaakre · #1 (**permalink**) 10-21-2006

I am buying a sailboat in Venzuela that is currently registered in Germany. I plan on spending very little time in US ports. Registering a boat in the state of Arizona and paying Arizona fees when the boat will be sailing around Panama and Rarotonga somehow doesn't make much sense to me.

Does anyone out there know the rules for registration in foreign countries by US citizens? What is the quickest easiest and cheapest approach? Are Venezuela or Caribbean countries open to registration by US nationals? Any links that discuss how to do it and which countries are best?

Zanshin · #2 (**permalink**) 10-21-2006

A common and relatively inexpensive means is to register in one of the "countries of convenience" by creating what is called an "IBC" (International Business Corporation). The British Virgin Islands are a popular. You pay about $1k/Year for the company and yacht and nothing shows up on Uncle Sam's radar. Lookup up "IBC" and/or "BVI Registration" on Google! to get lots of links. I think Panama does this as well, as does Gibraltar.

Chuteman · #3 (**permalink**) 10-21-2006

Let's just say, I know someone who knows someone else who was talking to a prospective boat owner that would rather not contribute to Mr. Arnold "Governator" pocket by bringing their boat into CA.
What about buying that same boat then getting it USA Federal (USCG) documented but leaving it outside US waters or at least CA?

hellosailor · #4 (**permalink**) 10-21-2006

"What about buying that same boat then getting it USA Federal (USCG) documented but leaving it outside US waters or at least CA?"
That would be crossing the line from tax avoudance (which is legal) to tax evasion, which is a crime.

A USCG documented vessel must have a US home port and, if your state tax authorities are simply feeble-minded clerks, they will collect the list of documented vessels every year to make sure that sales/use/property or other applicable taxes are paid on them.

Not to mention, being US documented puts you under the protection of the US flag. You can contact the Vessel Documentation Center to find out what that buys you.

By the way, no matter what the flag is? If you bring a foreign-flagged vessel into the US, you will be bringing it in under a cruising permit, with limits on it. And if you have US paperwork on it? Keeping it in most states for some period over 30 days, will bring the local taxmen around looking to check out where the owner lives, and whether the vessel has to be registered in that state--regardless. 60 days you might get away with--but a seasonal marina rental? Probably will come with a tax bill.

Easier to pay up, and don't mess with Caeser. Tax men physically *arrest* boats, and then you've got to figure out how to buy it back.

sailingdog · #5 (**permalink**) 10-21-2006

I would go with USCG documentation, which has some serious legal benefits. The hassle and costs of setting up a foreign shell corporation just to register the boat offshore seems to be a losing proposition. The excise tax on most boats is rather minimal, and the USCG documentation fees are one-time fees, and in many states, state registration and state registration fees are not required of a USCG documented boat.

Chuteman · #6 (**permalink**) 10-21-2006

OK, I passed along your comments & info to the person I know, who knows someone else that knew the person who is going to buy a boat. They are deciding if time in a state supported small studio with a fully tatooed room mate named Killer is worth the risk.
They are willing to negotiate a USCG Doc Fee+annual property tax payment in lieu of high sales tax, annual registration+annual prop tax payment. They plan to go sailing & think more about avoidance.
They send their best & thank you..........they seem nice.

sailingdog · #7 (**permalink**) 10-22-2006

LOL.... nice description of the hotel greybar...

hellosailor · #8 (**permalink**) 10-22-2006

Chuteman-
"They are willing to negotiate a USCG Doc Fee+annual property tax payment in lieu of "
It isn't that easy. That would only be possible *if* you can find a state where you can (and will) keep the boat, where that state has no other applicable taxes on a boat. Most will tax it either as personal property or as a motor vehicle. (Remember, if you don't keep the boat mainly in that state, the taxmen will start drooling over it.)
If you find a short list of states that have absolutely no taxes and no residency requirements for boats...I'd sure love to see it.

OTOH, there is a spot of land under US1 on the way down to the Florida Keys. Last year (Or was it this spring?) a batch of Cuban invaders got to a bit of land under the old (abandoned side) of the highway, and insisted they be prosecuted as "feet dry" captives, i.e. who are allowed to remain in the US.

The US Attorney General's office and USCG both ruled that land was not a part of the US, so they were "feet wet" and had to go home. The Miami papers had a field day over this--because until then, Florida thought that land belonged to Florida and was part of the US. The possibilities are endless, how often do you get a chance at a piece of land that has been formally rejected by the US government, which is located a stone's throw away from a major highway!?

ebs001 · #9 (**permalink**) 10-22-2006

Hellosailor, if this bit of land is not part of the USA, who owns it? Perhaps we could start our own country.

Chuteman · #10 (**permalink**) 10-22-2006

HS:
Can't speak for that prospective owner since they are out on the water sailing. But think that line should have read " USCG Doc Fee + annual Personal Property tax.......that way annual DMV fees are avoided (Documented boat) and they try their best to avoid sales tax on front end by staying at sea after foreign purchase.
Will see if they have more to say when they get back from chasing the wind.