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Old 07-28-2022, 02:11 PM   #1
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International Boat Purchase

Good afternoon all,

I'm getting close to purchasing a boat that is located in Bermuda and bringing it back to the States (CT to be exact). What hurdles or problems should I anticipate in executing this transaction and what is the process that I should expect? I have never purchased a boat internationally, so any words of wisdom are welcome.

I know not to move the money until title and documentation is in my hands.

Thanks
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Old 07-28-2022, 02:17 PM   #2
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There are brokers that deal with this. I would find one and ask them.
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Old 07-28-2022, 08:11 PM   #3
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I’m doing this right now. You need a broker. They will tell you what to fill out and then create the package and documents that have to go to customs.

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Old 07-28-2022, 11:18 PM   #4
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I bought mine in canada. If the boat was built in the United States originally then it's pretty easy to import. If it was build outside the United States there may be some issues. I spoke with the CBP people at the Port of Entry I was bringing the boat into to get information on it. Because my boat was built in the US it was pretty easy. It's not rocket science, so you can do it. You just have to be diligent, or hire a customs broker.
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Old 07-28-2022, 11:41 PM   #5
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I would NOT relay on the sales broker. By all means ask him or her, but check and verify everything independently. In my experience brokers are focus on closing a sale, and will down-play or trivialize anything that might complicate the deal, or in any way become a deterrent.


If in doubt, close the deal out in international waters.
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Old 07-29-2022, 07:32 AM   #6
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I strongly suggest you hire a customs broker. I have used Steele Reeder for years and find him invaluable. Look up Howard Reeder in Miami
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Old 08-01-2022, 01:35 PM   #7
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Thank you for the advice everyone.
I have contacted Howard Reeder.
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Old 08-01-2022, 06:49 PM   #8
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Good move. Glad that worked out for you.
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Old 08-09-2022, 12:05 PM   #9
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I’ve surveyed quite a few offshore yacht deals and never any problems with Bermuda. It was treated pretty much like Canada. Venezuela on the other hand was almost traumatic for one poor buyer who was made to jump thru hoops for months. The boat was built in Argentina, high quality builder who went out of business so builders documentation was unavailable. Every broker I know, or knew years ago, always enlists a good savvy custom broker to handle the deal.

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Old 08-11-2022, 05:39 PM   #10
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So as I move this purchase along little by little, the customs broker hit me with a shocker. There is a 25% tax on chinese boats, and of course, the boat that we have had our eyes set on is a Cheoy Lee 61 LRC.

Now, considering how US/China relations are, I expected some sort of ridiculous tax, but 25% made my eyes roll into the back of my head.

Has anyone here had any experience with importing or dealing with Chinese built boats? This one was built in 1984.
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Old 08-11-2022, 09:19 PM   #11
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I might be married to an attorney, but she's not a tax attorney, and I'm not one and I don't play one on TV, but a 25% import or customs tax definitely does not sound right on a used, 1984 boat.

When we bought our boat I spent an inordinate, thoroughly unnecessary amount of time studying tax laws and regs on boats. At least now I understand that phrase you sometimes see in some superyacht listings - "not for sale to U.S. residents in U.S. waters" - and yes, we didn't take possession of a Massachusetts boat until we crossed the Rhode Island border - but a 25% tax on a used, probably multiple-owner 1984 recreational boat does not sound right. I'd get a second opinion.
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Old 08-12-2022, 07:16 AM   #12
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That’s the thing, it’s not a tax, it’s an import duty. I just went through the same thing, though fortunately not with a boat made in China. It does not matter if the boat was imported before or not. To import a boat into the US from a different country, one must pay import duty on it.

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Old 08-12-2022, 08:24 AM   #13
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Any relief based on the current import duty maybe not in place when the vessel was originally built?

Any relief based on Cheoy Lee being a Hong Kong entity? (Pre- Hong Kong reversion to China?)

-Chris
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Old 08-12-2022, 08:41 AM   #14
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Found a boat sitting on the hard in Stonington Connecticut. Saw repetitively over a couple of years. Asked around and found out it was a one off used for one transatlantic race built in and used by a Englishman. After much back and forth although I found the boat and dealt initially with the owner there were definitely enough devils in the details so did involve a broker and lawyer skilled in maritime tax, documentation and law. Seller absorbed the costs (probably raised selling price to reflect that). I had my own lawyer and accountant review all paperwork. Soft costs higher than usual. Had clear title and confirmation that US documentation wouldn’t be an issue. Important that you confirm those two things before signing any contract.
England isn’t China but it was still the most involved boat purchase I ever made. Still I would do it again if a similar opportunity arose. Got a remarkable boat at a great discount.

Btw purchase isn’t the only reason to import a boat. That part isn’t difficult depending upon country . I imported my last boat into the BVIs. That year we were in and out of there so many times it was cheaper and easier to import and decrease fees/hassles with every entrance. Countries vary as to the definition of “import” and whether it’s for commercial or recreational use. Know some folks game the system flagging in a low tax/fee country and operating on cruising permits.
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Old 08-12-2022, 09:38 AM   #15
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Quote:
Originally Posted by ranger58sb View Post
Any relief based on the current import duty maybe not in place when the vessel was originally built?

Any relief based on Cheoy Lee being a Hong Kong entity? (Pre- Hong Kong reversion to China?)

-Chris
When the boat was built is not the issue. Any foreign commerce brought in to the US is required to pay duty of 1.5%. That is whether it is food, appliances, cars, or boats. The duty is almost always paid before it hits our shelves, so we are oblivious to it.

I believe in this particular case, the additional amount is because of tariffs "recently" placed on Chinese imports as a way of encouraging Americans to purchase products made in the US.
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Old 08-12-2022, 10:11 AM   #16
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Quote:
Originally Posted by Judy at JWY View Post
When the boat was built is not the issue. Any foreign commerce brought in to the US is required to pay duty of 1.5%. That is whether it is food, appliances, cars, or boats. The duty is almost always paid before it hits our shelves, so we are oblivious to it.

I believe in this particular case, the additional amount is because of tariffs "recently" placed on Chinese imports as a way of encouraging Americans to purchase products made in the US.

Yes. I wondered if, assuming the import duty was lower back in 1984, whether that rate might apply -- instead of today's punitive rate.

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Old 08-12-2022, 10:53 AM   #17
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The 25% tax is only on the Chinese sourced parts of the boat. So engines, generator, and much of the other equipment that makes up the boat is likely not subject to the tax. The key to taking advantage of that would be a breakdown of the boats value into the constituent parts, done by a credible 3rd party.

I’d also confirm with the import broker that the tax applies to used goods the same as it does for new goods.
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Old 08-12-2022, 01:04 PM   #18
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Yes, I think a 25% tax is inordinate, so I’m talking to a maritime attorney to see what we can do.

I don’t like the hassle of a foreign purchase, but I can deal with it for the boat we want. I was a federal govt contractor for over 20 years, so I’m somewhat conditioned to red tape and useless bureaucracy. It’s the 25% tax that has my head spinning.
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Old 08-12-2022, 05:00 PM   #19
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This is the result of a random internet search so I'm not sure about reliability, but if you're buying a 61-footer, it looks like this exclusion to the 25% tariff (duty) applied, at least until the exclusion expired in August, 2020. I wonder if that exclusion was renewed or extended.

https://www.mcswift.com/news/boats-m...d%20to%2025%25.
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Old 08-12-2022, 07:15 PM   #20
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I found that web page also. The boat was previously registered in the US, so I would think that the duty was paid then, but I won’t be surprised at all if the govt taxes it twice.
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