Buying Yacht as non-US resident - help !

[AndrewA2]

Originally Posted by Audeamus

Channel Islands or Langkawi. We chose Jersey, No LLC seemed the most affordable and straight forward compared with all the others we looked at including the Caribbean tax havens. Its good for 10 years. You do need to pay a token amount for a local address there (not required if you happen to know someone). Only other challenge we had is you need a tonnage survey by a surveyor recognised by them. The registration number has to be attached to the boat in approved manner but not a big deal We were able to find one is Thailand not sure about US. It was all done online with a couple of courier packs of documents. We had choices 3 passports between us and went this way. Dutch was also an option but probably not now for you with UK passport.

THANK YOU!!!!

Do you know what happens if you enter EU waters. Will you have to pay VAT ?

[lars]

Forget this flag business, register in Florida and get a florida title like 1000s of other non us citizens me included. Florida titles look very official and you will have no problem with it and the state registration

[Wallaby]

This is far more complex than most people realize, especially having been through it.
First, I am a permanent resident alien. I am NOT allowed to document my vessel as US. The same is true for LLC ownership. Try to do it without 51% US ownership, and if you get caught... good luck. Companies that say you can have an LLC not 51%, or sneak through a change on the documentation reassignment, have not read the applicable statutes.



Next, I can and do register my boat in SC as a legal resident. I paid sales tax on purchase, and property tax every year. Even if the boat was documented, I will still need to pay property tax to SC if I stay in the state over 90 (?) days.


I could document my vessel in Australia, or I could become a US citizen. Both cost money, and I don't need to as I can easily get in and out of the Bahamas. If I was traveling farther afield, I would document in Australia of become a US Citizen.



As far as DHS is concerned, my state-registered vessel is UNFLAGGED. Which means I cannot fly the US flag. An unflagged vessel takes its nationality from the owner.


Now, as a permanent resident alien, I can enter and leave the USA as I wish. The same is true of the vessel, except every time it enters a US port I must file a VESSEL ENTRANCE ($19). IT is a minor inconvenience as I spend the summer in one place. BTW, some regional offices interpret the statute differently and do not ask for vessel entrance fee. Florida may be one of them.

[PuttingDoctor]

Florida state registration would be fine if you want to fly a USA flag....
I’m also a green card alien and register my vessels in Canada. I use my sister’s address for my paperwork though most all of Industry Canada is online now.
As a resident alien you won’t have the issues most non residents have. Check with US Customs and Border Patrol for more info.

[masonc]

Check out Delaware registry

Originally Posted by AndrewA2

Hi!

First I am sure I am not unique in this, however I have not been able to find the answers to my situation here....

I am a UK Citizen, US Permanent Residence (MI). Looking to buy a yacht in the next few months, quite possibly outside the US (Caribbean area most likely).

Will be semi-located out of MS for 3-5 years (not FL as most people seem to be). MI still being my "home" address. After that period will not be based in the US.

Trying to find out what my best options are regarding tax, flagging etc for those US years.

As i understand I can apply for BVI flagged status as a British Citizen.
Another idea is to setup a LLC company in BVI (or else were if recommended) and buy yacht through that.
Also I can apply for US cruising permit and leave every 6 months for 15 days.

Or setup a US LLC and buy through that...

Some of these options are flexible (MS is right next to LA, AL, and FL if i needed to be based there)

What options are available minimizing my costs regarding sales/use tax, flagging (which may not be important in the end) etc?
Also what impact would that have if/when i where to land in a EU country (has Brexit effected this yet?)

Or just pay US/MS Sales/use tax?

I feel there are lots of options here, but looking for some advice!
(searching seems to hit specific examples, that does not quite cover all the aspects i need to consider.)

Thanks in advance !

[anodyneGB]

We're Brits resident in NY. Bought a US boat and it is now Part1 registered it in the UK. Very straight forward process and only 125 quid every 5 years.
One point to note is that if the boat is US built and bought in the US you can get a new cruising permit each year without needing to leave the US. Makes life a lot simpler.

[Augi]

Originally Posted by fabgo

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.

I am not an expert or 100% certain but a US LLC can be 100% foreign owned. It will be required for the non USA owner of the LLC to get a tax ID number/ Social Security Number(very easy to do), and be shown on the US tax return for the LLC as the owner. A US LLC is probably the least expensive jurisdiction to set up to own a boat, easiest to set up and to manage except for filing the tax return. If you are not generating income and the tax return is straight forward the US tax return can be done for you for between $250 and $500. There are other jurisdictions that will accomplish the same thing, don't require a tax return, but are probably more expensive to set up, probably more expensive to maintain. Then there are other trade offs between the USA and other jurisdictions to analyze.

[tarian]

At some point you say you are returning to Europe , I suspect under a UKpassport and your wish for a Red Ensign , at some point as we a re still in the legal EU you would have to pay tax somewhere, but no one knows what the rules will be in the future for UK residents and boats and Europe and what tax rates will be compared to the EU, it will become even more of a mess for those in Europe at the moment , when the UK leaves fully in a year , so part of your question is who knows

[Montanan]

You could simply register the boat with the State at which it will be harbored. No need to pursue foreign flagging.

One may be subject to sales / use tax, and / or, property taxation on the boat depending on the State in which waters it is kept. And yes, there are cruising permits required by many States if you wonder from your primary State waters. When you cross a jurisdictional line you need to know the consequences thereof.

The devil in the details and there are a LOT of details. When you decide which State you wish to dock or store it on the hard, research that States specific rules as to taxation and registration.

Persons who purchase boats or airplanes from dealers in other states for use in Mississippi are required to pay Mississippi Use Tax on the purchase. (The rate is 7% for boats

Alabama sale/use tax for sailboats [non-trailerable] is 4%, but there are also sales tax on the accessories associated with the boat. Reference: http://https://revenue.alabama.gov/w...6-2-.46.01.pdf

You can find the details for each and every State simply by googling.

[Montanan]

Originally Posted by Augi

I am not an expert or 100% certain but a US LLC can be 100% foreign owned. It will be required for the non USA owner of the LLC to get a tax ID number/ Social Security Number(very easy to do), and be shown on the US tax return for the LLC as the owner. A US LLC is probably the least expensive jurisdiction to set up to own a boat, easiest to set up and to manage except for filing the tax return. If you are not generating income and the tax return is straight forward the US tax return can be done for you for between $250 and $500. There are other jurisdictions that will accomplish the same thing, don't require a tax return, but are probably more expensive to set up, probably more expensive to maintain. Then there are other trade offs between the USA and other jurisdictions to analyze.

A US LLC can be wholly or partly foreign owned.

The situation for US flagging gets more complicated when it comes to corporate ownership. A corporation meets the citizenship requirements if it is incorporated under the laws of the U.S. or a state, if its executive officer by whatever title is a citizen, if the chairman of the board of directors is a citizen, and the number of non-citizen directors is no more than a minority of the number necessary to constitute a quorum. As an additional requirement, if the vessel seeks a fishery or coastwise endorsement, at least 75% of the stock interest in the corporation must be owned by U.S. citizens.

As to US flagging of a vessel, For a Limited Liability Company (LLC), all the members of the LLC must generally be U.S. citizens, and/or any person who has management authority over the LLC must be a U.S. citizen.


There are some small exceptions to these rules but the general theme is, if you intend to document a vessel and there are any foreign interests in the vessel, you will have to make sure the ownership structure satisfies the U.S. citizenship requirements. But a vessel can not be US flagged unless it is fully owned by US citizens and if owned by an entity that entity has to be owned by US citizens. Permanent residency is not the same as US citizenship.

Only United States Citizens can own United States Documented Vessels. Any U.S. documented vessel which is sold to a foreign citizen must be deleted from documentation. There are no exceptions to this rule - a vessel must be wholly owned by U.S. citizens. That means that if a vessel is owned by multiple individuals, all owners must be United States citizens. If you have dual citizenship, you qualify as a U.S. citizen. On the other hand, if a husband and wife want to own a boat together and only one is a U.S. citizen, they cannot own the boat jointly if it is to be U.S. flagged.

One does not need to be a US citizen to register a boat with a State of the USA. The boat must reside in the State to which it is registered. Similar to a car in that regard.

[letsgetsailing3]

If you just pay the taxes where you're going to keep it, you'll avoid the hassle of trying to manipulate the system, AND you'll be legal and can do everything you want to do, while not trying to hide every time you see the authorities.

[AndrewA2]

If this helps. I have a SSN (been living in the US for ~15 years now). GreenCard that whole time.
Not planning on visiting UK with boat at anytime. But will be sailing through the Med in 5-6 years, so hitting EU waters... and agreed, who knows what Brexit looks like then. It may be a moot point or a complete nightmare

Red Ensign is not a requirement, just thought it might be easier/helpful
Similar thoughts for setting up a LLC/LTD company (was thinking overseas more then US though) !

Prior to that will be semi based on the coast in Mississippi (MS), boat will be there when in the US. While still holding my residential address in MI. (I travel a lot for work)

Will not be in Florida (which most of the information i find references), unless cruising through (but could avoid that completely if there are hefty costs associated). Planing on Caribbean, and northern coast of South America cruising during those first 5-6 years. So really only going to be in MS (a max 6-8 months per year) when NOT cruising outside the US . Hence US based is not really full time mooring... just the 1 location I will keep coming back to more then others.


As i travel so much, i can pretty easily arrange to sail boat out of US as needed. Would prefer not to, other than for renewing cruising permit if needed.
Looking to buy a Lagoon (or some other makers that are not US based) so the whole US manufactured laws will not be available.

Also expecting to buy boat out of the US (as that is where most of the boats I am finding are, rather then for any specific reason). But of course can make the sale in whichever country makes sense !

So really im looking at how to best NOT spend more money then necessary
Lots of good tips - please keep them coming. Its keeping me busy deep diving into those areas !!!

[Scaramanga F25]

I am a Canadian citizen with my principal residence in Canada. I bought 3 USA built boats over the years in the USA. Two were used. One I bought through a broker in Florida. I paid Florida sales tax on the true sales price On the other I paid Florida sales tax on an agreed-on sales price. I kept the boat in Florida and sailed to the Bahamas every year. Upon returning I produced a departure slip that I obtained from c/I/ 24 hours +- before leaving. So my boat was Florida REGISTERED and the stickiest officer in Palm Beach C/I told me that the boat is to fly the flag of the Captain. Never a problem. Just the TAX $$.
The first USA built but new boat an Officer from the Canadian Embassy came to my boat in Newport Beach California and DOCUMENTED the vessel. No charge. I never sailed to Canada so no taxes. (Not sure they would do this 45 years later) Never a problem too.

[Montanan]

M ISS IPPI ISSI IT IS THEN!

Are sales of automobiles by Mississippi dealers to out-of-state customers taxable for Mississippi sales tax?

Sales of automobiles, trucks, truck-tractors, semi-trailers, trailers, boats, travel trailers, motorcycles, all-terrain cycles, and rotary-wing aircraft that are exported from this state within 48 hours, registered, and first used in another state are exempt from sales tax. A properly executed Certificate of Interstate Sale (Form 72-315) must be maintained to substantiate sales of boats, all-terrain cycles, or other equipment not required to be registered for highway use. Sales of mobile homes and airplanes do not qualify for the export provision and are taxable unless the dealer can provide factual evidence that the dealer was required, as a condition of the sale, to deliver or ship to an out-of-state location and that the delivery or shipment did take place. ​

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When a Mississippian purchases a vehicle out-of-state and brings it to Mississippi, is use tax due on the vehicle?

Persons who purchase vehicles that will be registered and used in this state from dealers located in other states (and these dealers are not registered with the Mississippi Department of Revenue) are liable for the payment of use tax at the same rate and on the same basis as sales tax. The Mississippi Use Tax is payable to the county Tax Collector if not previously paid to an authorized out-of-state dealer at the time of purchase. No credit is allowed for sales tax paid to the dealer in the other state against Mississippi Use Tax on purchases of automobiles, motor homes, trucks, truck-tractors and semi-trailers, trailers, boats, travel trailers, motorcycles and all-terrain cycles when the first use of the vehicle occurs in Mississippi. First use of the vehicle is considered to occur where the vehicle is first tagged or registered (does not include temporary tags.)​

You may desire to have your vessel flagged as a UK vessel so as to gain such nationality, especially if you are transiting outside of the USA waters. If you are just going to stay in the Gulf states then a state registration will suffice given your US permanent resident status.

So of keen issue is what boats and when are such boats required to be registered in Mississippi. Does Mississippi have an exemption of their vessel registration regulations for foreign flagged vessels? I have yet to discern if such a foreign flag status is derived an exemption, suggest you contact the Department of Revenue for specific guidance in that regard.


If you purchase your boat outside of the USA then it will be imported into the USA when you enter USA waters and you may need to pay duties when you clear Customs and Board Control upon arrival. Depends on the country of origin of manufacturing of the boat and Trump's tariff schemes of the day.

https://www.dmv.org/ms-mississippi/b...gistration.php

MS Vessels Requiring Registration
In Mississippi, ALL motorized vessels AND ALL sailboats must be registered with the Department of Wildlife, Fisheries and Parks. The only exceptions are boats documented with the U.S. Coast Guard. Perhaps there is also an exemption for foreign flagged vessels.

If you're unsure whether your boat requires registration, contact the MDWFP for clarification. https://www.mdwfp.com/apps/contact-us/

MS Boat Registration Procedures
After buying a boat, you have 10 days from the purchase date to register the vessel in your name. Start the process by gathering the following items:

A completed Mississippi Motor Boat Registration Application (REV 2016).
Detach the stub at the bottom of the application to use as temporary registration while you wait for your official registration and decals to arrive.
Any of the following proof of purchase documents:
Sales receipt.
Bill of sale that's notarized OR signed by 2 witnesses.
Notarized explanation of how you came to own the vessel (e.g. the boat was transferred into your name by a deceased relative).
If you bought the boat out-of-state, proof of Mississippi sales tax paid.
Payment for the applicable vessel registration fees.
Then, submit the items above in person OR by mail to:

Department of Wildlife, Fisheries and Parks
Boating Division
1505 Eastover Drive
Jackson, MS 39211
Boat registrations with the MDWFP are valid for 3 years from the last day of the month in which you registered your boat.

Boat Registration Fees in Mississippi
The MS Department of Wildlife, Fisheries and Parks charges the following fees for boat registrations:

Original/renewal boat registration (based on the length of your boat):
Less than 16 ft in length: $10.20.
Between 16 ft up to 26 ft in length: $25.20.
Between 26 ft up to 40 ft in length: $47.70.
40 ft in length and over: $47.70.
Duplicate boat registration certificate: $7.70.
Mississippi sales tax: 7% of the sale price.

Reference: https://dmr.ms.gov/ms-boating-rules-...ions-overview/


You must have a Mississippi Certificate Number and validation decals to legally operate your vessel on public waters in Mississippi if your boat is motorized or if your boat is a sailboat. The validation decal must be affixed on both sides of the vessel, preceding the prefix letters of the registration number and within six inches of the registration number. If your vessel requires registration, it is illegal to operate or allow others to operate your vessel unless it is registered and numbered as described above.

The Certificate of Number must be onboard and available for inspection by an enforcement officer whenever the vessel is operated.

If a registered vessel is sold or otherwise transferred to another person, the “buyer” must apply for the Certificate of Number to be transferred to his or her name within 10 days of the date of purchase.

Owners of new or used boats may obtain a registration form at any local county tax collector’s office, most places where boats are sold or serviced, the Mississippi Department of Marine Resources office, the Mississippi Department of Wildlife, Fisheries and Parks district and Jackson offices, or online at MS Wildlife, Fisheries, & Parks.

BOATING EDUCATION REQUIREMENTS
All persons born after June 30, 1980, must have passed a boating education course approved by the Mississippi Department of Wildlife, Fisheries and Parks to legally operate a vessel.

In addition, to operate a motorboat or a personal watercraft, a person under 12 years of age must also be accompanied onboard by someone who is at least 21 years old. The boating education certificate must be carried onboard the vessel whenever it is operated by someone required to have a certificate.

The Mississippi Department of Marine Resources Marine Patrol offers free approved boating education classes to the public along the Mississippi Gulf Coast.

Owners of new or used boats may obtain a registration form at any local county tax collector’s office, most places where boats are sold or serviced, the Mississippi Department of Marine Resources office, the Mississippi Department of Wildlife, Fisheries and Parks district and Jackson offices, or online at MS Wildlife, Fisheries, & Parks.


MARINE LITTER STICKER
The Marine Litter Act of 1989 prohibits the dumping of waste, garbage and other debris from vessels within Mississippi state waters. This includes any type of plastics, such as synthetic rope, fishing nets or garbage bags. Other garbage prohibited includes paper products, glass, metal dunnage, lining and packing materials.

CMR Title 22 Part 10 requires all vessels (including personal watercrafts) on Mississippi marine waters have a clearly marked, closed container for the proper disposal of waste. Throwing waste overboard is punishable with a fine of up to $500 for a first offense and up to $10,000 for the second.

While in marine waters, the marine litter sticker below must be posted on-board vessels and in the passengers’ plain view.

Marine Litter Stickers are free and available at various bait shops, Walmart and Academy stores in the three coastal counties.

[AndrewA2]

Originally Posted by Montanan

M ISS IPPI ISSI IT IS THEN!
.....

First - Thank you for all of that information!!!!
The way i read what it says is: That any boat must be registered in MS waters... so does that mean no one can sail in MS without a MS registered boat, even tourists passing through?

I would assume that cruising permits would be available, and those would have max length of stay and min length away before a new one can be reissued?

another thing. As I am a British Citizen, I don't believe I can register a boat in the US. Also that would add additional TAXs and import fees (as I am understanding things...) ?