A non US citizen with Delaware registration flys what flag?

[Dockhead]

Originally Posted by belizesailor

Part of yes, but technically it is a State registered boat, not Federally Documented. There is a loophole in Delaware law which allows foreign ownership of Delaware registered boats. A foreign owned boat cannot legally be Federally Documented. Thus the delima.

It's weird that you can't do Coast Guard docs through a U.S. company, if the shareholders are foreign. I know that this is true, but I don't know any other country which has such a restriction.

So Delaware actually follows the normal practice around the world. A Delaware company is a Delaware citizen. For example, if you want to register a boat in the UK, you can form a UK company in about 15 minutes online. It doesn't matter who the owners of the company are.

[belizesailor]

Originally Posted by Dockhead

It's weird that you can't do Coast Guard docs through a U.S. company, if the shareholders are foreign. I know that this is true, but I don't know any other country which has such a restriction.

So Delaware actually follows the normal practice around the world. A Delaware company is a Delaware citizen. For example, if you want to register a boat in the UK, you can form a UK company in about 15 minutes online. It doesn't matter who the owners of the company are.

To Federally Document a vessel in the USA all owners must be USA Citizens if ownership is held as individuals. If held in a corporate entity then there are restrictions on allowable foreign % of ownership and officers. As I recall, USA Citizens must hold at least 50% of entity.

This is why there are many foreign owned vessels registered in Delaware.

[Dockhead]

Originally Posted by boatman61

Napoleon has a lot to answer for..

ROTFLMAO

[Dockhead]

Originally Posted by belizesailor

To Federally Document a vessel in the USA all owners must be USA Citizens if ownership is held as individuals. If held in a corporate entity then there are restrictions on allowable foreign % of ownership and officers. As I recall, USA Citizens must hold at least 50% of entity.

This is why there are many foreign owned vessels registered in Delaware.

Yes, that's what I understand, and what I was writing about.

I wonder if other state registries also require American ownership, like the Coast Guard does? I bet not. I would guess that Delaware is popular just because at one time it was a well known jurisdiction for low tax or tax free holding companies.

[belizesailor]

Originally Posted by boatman61

Napoleon has a lot to answer for.. [emoji3]

Indeed he does! Do you know we have him to thank for the Vienna Lager style of beer finding its way to Mexico!? Seems that Mexico was tired of paying interest on loans to Napoleon and told him to shove it. Bad thing to say to a guy like Napoleon. He promptly invaded Mexico and installed a new ruler, Maximillan...an Austrian...Austrian brewers followed and the rest is history. So thank Napoleon next time you enjoy a cold Negra Modelo.

We also have him to thank for the arcane legal system of the USA state of Louisiana, which is based on Napoleonic code...and probably no foriegn vessels are registered there because no one can figure out how!

[emoji6]

[belizesailor]

Originally Posted by Dockhead

Yes, that's what I understand, and what I was writing about.

I wonder if other state registries also require American ownership, like the Coast Guard does? I bet not. I would guess that Delaware is popular just because at one time it was a well known jurisdiction for low tax or tax free holding companies.

Im not sure on the restrictions in other States, I think it is possible in Florida too.

The key difference with Delaware is that they have made corporate filings into a major industry in the State facilitated by very favorable corporate law statutes.

[Dockhead]

Originally Posted by belizesailor

Im not sure on the restrictions in other States, I think it is possible in Florida too.

The key difference with Delaware is that they have made corporate filings into a major industry in the State facilitated by very favorable corporate law statutes.

Indeed, and taxes, but I don't think the advantages in Delaware are so unique anymore.

[belizesailor]

Originally Posted by Dockhead

Indeed, and taxes, but I don't think the advantages in Delaware are so unique anymore.

Yeah, I dont recall Delaware tax law details, but obviously they dont go after sales or property tax on boats. Ive been part of Delaware corps before and never had them come after us for taxes of any kind...cant say the same about other States...some of whom like to go on periodic fishing expeditions just to see if they can get lucky. You can predict these fishing expeditions are coming when you hear bad economic news for the given State. They are usual hunting for smaller companies who are unprepared (under most USA tax code if you cant prove you dont owe it -- then you do!). Fortunately, we were always well prepared and the opening volley usually discouraged them from persuing the matter any further...and they went off in search of easier targets. Thats when a good accounting firm justifies those high fees they've been charging you...sort of like paying insurance. [emoji6]

To my knowledge in Delaware you must use an agent to form a corp...at least there is no obvious way to do it on their Secretary of State site. This creates more business of course.

By contrast, in Florida and many other States, you can form a corp online in a few minutes at nominal cost.

[valhalla360]

Originally Posted by Dockhead

It's weird that you can't do Coast Guard docs through a U.S. company, if the shareholders are foreign. I know that this is true, but I don't know any other country which has such a restriction.

So Delaware actually follows the normal practice around the world. A Delaware company is a Delaware citizen. For example, if you want to register a boat in the UK, you can form a UK company in about 15 minutes online. It doesn't matter who the owners of the company are.

US is pretty protective of anything with commercial marine shipping involved. USCG Documentation is historically a commercial thing. It's only with modern cruising where small independently owned pleasure vessels have been documented in significant numbers.

The alternative argument could be made for some countries, that they let anyone run anything under their flag...of course Delaware is somewhat guilty of the same tax haven games.

[valhalla360]

Originally Posted by Dockhead

Yes, that's what I understand, and what I was writing about.

I wonder if other state registries also require American ownership, like the Coast Guard does? I bet not. I would guess that Delaware is popular just because at one time it was a well known jurisdiction for low tax or tax free holding companies.

I suspect not as they aren't thinking of international travel. They just want their pound of flesh for keeping a boat in the state.

Several states require registration for USCG documented boats....they play some games with not putting the numbers on or call it by a different name but it's clearly just making sure everyone pays the registration tax.

[Wallaby]

Vahalla 'nails' it.

Originally Posted by valhalla360

I assume the boat only has state registration as USCG Documentation is limited to US Citizens.

To a degree, you are playing in a gray area as you are not nationally registered/documented at all (though many jurisdictions will accept the state registration)
- In most cases (US Citizen on US state registered boat), there is no conflict and all evidence is it's a US boat that should fly the US flag.
- In this case, you have state (not national) registration and non-US citizenship (not sure if a legal resident has an impact). If you had no registration, the owner's citizenship would likely be the determining factor.

In reality, other than a debate over technicalities, no one is likely to make a big deal of it in US waters.

Unless, it is the US Coast Guard / DHS, which may take the matter seriously.

I have the same issue. I have a US-made vessel (documented under prior owner, but taken off at the time of purchase--leaving it documented would be fraudulent). I am a permanent Resident Alien with Australian citizenship. I also participate in the Small Vessel Reporting System as well.

My boat is registered and titled in South Carolina. Other US states recognize this, and it is not a problem. For DHS, the situation varies by region/office.

In one area, I am told my vessel has NO official 'registration' and must fly the flag of the owner's citizenship. I can legally return to the US from the Bahamas under SVRS, but I must go to the nearest port to complete a Vessel Entrance form, and pay exactly $19. I must do this every time I enter a new port in the USA or face a $5000 fine.

Go south a few hundred miles and my vessel is not a problem--treated like any US documented vessel. Twice, I've been told I do not need to do a vessel entrance form, and to stop wasting their time. Go figure!

Needless to say,, I religiously include all of this in the ship's log and obey the rules in each region.

[kas_1611]

Doesn't the US have a distinct maritime ensign that is different from the national flag? If memory serves it is similar to the Stars and Stripes but has an anchor surrounded by a ring of stars with the same 13 red and white stripes.

Could you use this as it is not the official National Flag nor an unrecognised state flag but is still an official national ensign?

The boat is most definitely registered in the USA so needs to show its Nationality when travelling overseas but it sounds like a technicality means it should not fly the Stars and Stripes as the owner is not a US Citizen. Perhaps the Maritime Ensign is an acceptable work around.

You may need to fly a small Stars and Stripes from the burgee in the same way that Brits flying a Blue Ensign should according to flag etiquette.

[jrbogie]

in a half century of sailing I don't even have a flag. do I need a flag???

[wolfgal]

It is my understanding that US citizenship is a requirement of obtaining Delaware registry.

[bumpman]

If I remember correctly, a US Ensign (the one with the anchor) is the correct flag for a US documented vessel, whereas a US flag (stars and stripes) is the correct flag for any other US vessel. Am I correct? Or has this changed?