Vessel registration & purchase in BVI by US citizen

[Fikare]

Hello, I'm brand new to this site, and I'm excited to start participating! I have a few questions; My SO and I, (both US citizens) are considering purchasing a boat that is currently registered in the BVI. We would like to keep it that way, and I am trying to find out if it's doable to create a business entity in BVI for this purpose as we can't register the vessel as citizens. If anyone have any experience with this, or tips where to turn to get reliable and reasonably priced advise, it would be greatly appreciated. Thank you!

[Zanshin]

I went through this process before, having kept 3 boats in the BVI for the past 15+ years.

You can create an IBC (international business corporation) in the BVI and register the boat there. Calculate around $1000 per year in fees/costs for the BVI registry and business costs. This can be an advantage when it comes to inheritance fees, as the transfer of ownership occurs in a jurisdiction outside of your home country.

The BVI flag is a red ensign one, which is nice but not necessarily an advantage. Much depends upon your nationality and tax residence. Your plans for where you intend on keeping the boat also play a major role.

Last year I finally gave up on the BVI as my base (I'd been based at Nanny Cay on Tortola). The BVI costs have gone up significantly, new fees and taxes magically appear every year and the belongers are noticeably more hostile towards outsiders. So I moved my base of operations further south and haven't missed the BVI at all (apart from losing touch with my old friends and contacts).

If you buy through a broker, they can easily convert the BVI-flagged boat to a US-Registered one. They can do that in their sleep! I can't think of any disadvantages to doing that, if you continue to keep your boat in the BVI the only difference in cost would be that you would need to do annual "temporary import" at around $200.

[Fikare]

Thank you very much Zanshin for a quick and informative reply! We plan on keeping the boat in the south Caribbean permanently, not sure exactly where yet. Curious-what areas do you find friendlier? Thanks again

[Zanshin]

I moved the permanent base from the BVI to St. Lucia and still spend about 5 months or so out of the year sailing around the island chain.
If you intend on remaining in the Caribbean area the flag isn't going to make too much of a difference. An American flagged vessel was never an option to me, but as a citizen of an EU-State I took advantage of the rules and have a full British registry (yes, I know that those rules have since changed, but I'm still grandfathered in). Any of the red ensign flags are pretty good to have, and the BVI is one of them. But you need to ask yourself if the $1k/Year additional costs are worth it. Although the IBC does no business apart from the boat registry, I don't know what the reporting rules to Uncle Sam are, and the IRS will certainly be interested in someone owning an offshore corporation in the BVI regardless.