Purchasing a new or used yacht? Why should I buy my yacht in a corporation or LLC?
Are you aware that all of your personal assets are in jeopardy if you own your yacht as an individual or as a partnership. To shield yourself from total financial disaster take advantage of the limited liability offered by a Delaware Corporation or a Delaware Limited Liability Company. Owning an yacht in this manner can offer you asset protection, privacy and tax savings.
Delaware is recognized as having a favorable tax climate. Delaware has no sales tax, personal property tax, intangible property tax or stock transfer tax. Additionally, no Delaware corporate income tax is assessed for income derived outside of the State of Delaware.
Note: It is important to understand that sales tax shelters are situational. Many states have "user taxes" and the like. One should consult with a legal or tax advisor to determine if a tax on a yacht will be due in the State in question.
When initially purchasing the vessel a sales/use tax may be due in the state they are actually keeping or using the vessel. The advantage of purchasing the vessel as a corporation truly comes into
being when they opt to sell the vessel.
What is US Coast Guard Documentation?
Documentation is the national form of registering vessels. It is handled by the US Coast Guard and establishes unquestionable ownership and acts as the vesselís passport in foreign waters.
Documentation is required for the operation of vessels in certain trades and serves as evidence of
nationality. Documentation provides :
- Conclusive evidence of nationality for international purposes
- Provides for unhindered commerce between the states
- Admits vessels into certain restricted trades, such as coastwise trade and the fisheries
- Establishes an internationally recognized maritime title for the vessel†
- Acts as the vesselís passport in foreign waters
- Fishing vessels, cruise ships and boats for hire must be documented with the USCG
Once a vessel is documented there are now annual
fees charged by the USCG to renew the documentation. USCG documentation must be renewed on an annual basis. A documented vessel is exempt from displaying state numbers on their hull. However, all documented vessels must comply with the laws of the state in which they are operated. States may require documented vessels to be registered (but not numbered) and to display state validation showing that they have complied with the state requirements.
Most banks require that a vessel being financed be documented and provide them with a First Preferred Ships Mortgage recorded with the US Coast Guard. Vessel financing has been enhanced through the availability of preferred mortgages on documented vessels.†
Requirements for Documentation
- A vessel must measure at least five net tons
- It can be owned by either an individual who is a citizen of the United States or a corporation in which 75% of the directors are American Citizens†
- Usually a vessel 25í in length can qualify for documentation†The tonnage is determined by volume of the vessel, not by how much the manufacturer says the vessel weighs
Benefits of Documentation
- Documentation allows for easy entry into foreign ports.
- The chain of ownership of the vessel is maintained in one registry, a registry of history, pride, tradition and prestige.
- Documentation facilitates the sale of a vessel, particularly when financing is involved
U.S. Coast Guard Maritime Security (MARSEC) Levels
The Coast Guard employs a three-tiered system of Maritime Security (MARSEC) Levels designed to easily communicate to the Coast Guard and our maritime industry partners pre-planned scalable responses for credible threats. If the Secretary of Homeland Security issues an NTAS Alert, the Commandant of the U.S. Coast Guard will adjust MARSEC Level, if appropriate, based on the commensurate risk, any maritime nexus, and/or Commandant consultation with the Secretary of Homeland Security.
Yacht Registration Worldwide for International Clients†
To register your yacht as in international client we have two options to offer
1. Delaware State Registration
2. US Registration through a Delaware Company & Trust Structure to meet the 75% citizenship requirement with ownership of a
corporation for USCG Documentation. This is our "Specialty".
Call us toll free for a quote or a free
consultation 877.335.2677 or 561.968.6611