EU or US flag for 4y lifeaboard in US-waters?

Our plan is to lifeaboard for a circumnavigation of the US/Can north to north incl. stopp-over in the caribbean. Starting no matter from north-east or north-west. Therefore we plan to buy a vessel in the US or CAN. We will not give up our home in Germany and plan flying back 2 to 4 times a year.
Actually we arrived mentaly in planning our lifeaboard as this will happen within the next 24 to 32months.

Following every letter of the massive thread about registration and taxes I began digging into the US regulations for boaters.
My wife and me are both residents of Germany. I run a German LLC (-like company) for our two vessels. This allows easy going within the EU - no tax questions or timeframes of max stay periods etc. We actually lifeaboard for 1/3 of a year since the last 4 years.

The situation in the US: Running a alien flag will be a total mess because of CBP in every port plus the 180day limit to move the vessel out of the country. (I don't understand how those BVI- or Bahamas-flagged boatowners are managing that burden.)

My conslusion: Creating a Delaware LLC and registering the boat on the LLC looks like the best advice.
The drawback might be that we have to keep an eye on the tax regulations state by state and day by day.

Any hints and recommendations on our plan?
Any non-US lifeaboards in the community?

add1:
will my German pleasure boat license be valid for operating a US flagged vessel of 65-75ft (personal/private use)?

x2y3z4 said:

add1:
will my German pleasure boat license be valid for operating a US flagged vessel of 65-75ft (personal/private use)?

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That should be fine, and is more than what most US operators have. The most that is required, and it varies from state to state, is a card showing that you took a basic boater safety course.

You may want to talk to a tax attorney about this, but some / many Federally registered boats are also registered in a State as well.
We are both Fed registered and in Florida.
This usually avoids most of the problems of other states trying to tax you, unless you spend too much time in their waters. Too much time varies by state.
Different states have different fees and requirements. Because our boat is 1986 and has original engines, Florida considers us an antique, and charges less to register our 40 footer than they do for our dinghy.
If your boat is registered here, the time you can spend cruising may be limited only by your visas, and not by the time the boat is in US waters.
Good luck, and hope to see you here someday soon.
JohnS - La Vita Dolce, Cheoy Lee 40 LRC

Guten abend,

My understanding is that only a US citizen can document a vessel in the US.

Here’s an article that I found on the subject.

https://www.marlinmag.com/foreign-citizens-owning-boats-in-us

John

Yes, I think you do have to be a US citizen to document a boat here. Having an LLC may get around that. Get a good attorney. Good luck , sounds like fun.

Other members have previously written about creating a LLC in the states for the purpose of documenting a vessel. This is routine with aircraft and shouldn't be a problem at all.

Most of the Canadians I know bought a boat in the US and just state registered it.

No questions , no hassles and easy to sell when the adventure (some over a decade) ended.

Purchase the boat and register it in a low tax state . Use a mail service for address.

Sabre602 said:

Other members have previously written about creating a LLC in the states for the purpose of documenting a vessel. This is routine with aircraft and shouldn't be a problem at all.

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And even than one of the corporate and there for vessel owners must be US citizen. Went through that myself. Otherwise you can register with the state only!

Sabre602 said:

Other members have previously written about creating a LLC in the states for the purpose of documenting a vessel. This is routine with aircraft and shouldn't be a problem at all.

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I think it will work and allow for Deleware state registration. But I don't think it will work to Document the boat since you need to show that the LLC owners are majority US Citizens. But state registration may be just fine for the intended purposes.

... up to now my confusion is rising as some comments are contradictory.

Like life at all ;-)

I think you are getting conflicting answers due to your situation being rather unique.

Many boats arrive from other countries where they are registered, no problem there, although there may be time limits.

You are intending to buy a boat in the states and register it somehow and have it remain in the states (and Ca). Likely not practical to register it in Germany as it will not be there.

Also not likely possible to document it with the USCG (federal registration) as you are not a citizen. There is a part of documenting a vessel as it could be called up in a national emergency and that may be where the citizen requirement arises.

My inclination is that registering with a US state may be the easiest path. Or with Germany, which you would know more about. Which state? I have no good answer. There are property tax and sales tax implications that vary from state to state and that will factor in. Some are better than others.

In general, north east US states and west coast states are heavy tax and heavy on regulations. Southern states less so.

No boat operating license needed in the states unless you are operating for hire.

I would look into the requirement to clear inwards with CBP at each state's port. My understanding is that you enter a nation, the US for example, once and don't need to interact with CBP as you enter another US port, even if it is another state. There will be a time limit, my guess is 180 days. This is based on my experience moving privately and publicly owned vessels across the US and Canada and Mexico's borders for work.

It's always a good idea even if not required to clear outwards as well when leaving one nation for another. It documents where you came from and when making entry to the next nation easier.

I'm using the word state here in meaning US States, not Port States.

States will also have stay limits, each one being different. If you over stay your limit then you'll need to follow that state's rules.

I would think if you purchase a boat in Canada, east or west coast, cruise that coast. Clear out of Canada and into the US, cruise that coast. Then if going east to west clear out of the US and into the BVI. Then Mexico, the US and finally Canada to finish up. As long as you observe time limits you will be OK.

I have it on good authority that Mexico doesn't care as long as you have liability insurance. Perhaps time your longest trips home to leave the boat in Mexico.

If you need to be home in Germany when a time limit comes up hire a local delivery capt to move the boat to the next state or nation.

You've got some homework to do. If you don't like the answers you get from authorities dig into the laws. Yes, I know, it's painfully boring reading regulations.

You might consider hiring a vessel agent to handle Canada to US to BVI to Mexico to US to Canada inwards and outwards clearances. In my experience port authorities would rather deal with an agent than an owner / operator. The authorities trust the agent has it right and accept their paper work often not even bothering to visit the vessel.

I know a number of people with foreign flagged boats in the US, and the check in requirements are a bit of a shirt show. I believe the written requirement is that you check in and report all vessel movements. So every time you depart a port and re-enter a port you need to call in. That's a pain in the ass.


That said, I know people who have called in to report movements and been yelled at for doing so. And others who have been told not to call in then been yelled at for not checking in.


It seems that it's up to the particular coast guard sector. Some want you to check in all the time, and others only want you to check in when you enter or leave a new sector. Oh, and it's up to you to magically know where the sector boundaries are, or you'll get yelled at for that too.


It's been quite embarrassing to hear of the hassles people encounter visiting out country.

twistedtree said:

I know a number of people with foreign flagged boats in the US, and the check in requirements are a bit of a shirt show. I believe the written requirement is that you check in and report all vessel movements. So every time you depart a port and re-enter a port you need to call in. That's a pain in the ass.


That said, I know people who have called in to report movements and been yelled at for doing so. And others who have been told not to call in then been yelled at for not checking in.


It seems that it's up to the particular coast guard sector. Some want you to check in all the time, and others only want you to check in when you enter or leave a new sector. Oh, and it's up to you to magically know where the sector boundaries are, or you'll get yelled at for that too.


It's been quite embarrassing to hear of the hassles people encounter visiting out country.

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Yes, it can be as you put it a shirt show at times. It's always good to have all of your documentation aboard, copies of the relevant regs and be willing to stand up for yourself, in a firm yet patient and polite manner. Often times you'll be dealing with lower level personnel who do not fully understand the rules and regs they are charged with enforcing.

twistedtree said:

I believe the written requirement is that you check in and report all vessel movements. So every time you depart a port and re-enter a port you need to call in. That's a pain in the ass.

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The cruising license says one must check in at every "place or port". This is being interpreted as "everytime you stop the boat". On it's face that is not that onerous but in practice it is almost impossible to do routinely. provided phone numbers that are not in service. Officers that do not know their own geographic region, follow the instructions of one officer only to thave the next one say "i don't care what you were told, you'll do it my way". ( I have several Abbott and Costello like stories I could tell ).

This law has been in the CFR's since the early 60's. I've been cruising US waters since the early 90's and had never seen the rule enforced until January 2016 and it is now enforced with a vengance and in a most unpleasant manner. I know several Canadian cruisers who now refuse to cruise in US waters. Over the last three years we spent $40k per year of our retirement money in the US ..... we are now re-thinking that.

twistedtree said:

I know a number of people with foreign flagged boats in the US, and the check in requirements are a bit of a shirt show. I believe the written requirement is that you check in and report all vessel movements. So every time you depart a port and re-enter a port you need to call in. That's a pain in the ass.

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From personal experience it is such a pain in the butt having to constantly report position and movement. In the future I would try to avoid visiting countries like that. Here in Qatar there are coast guard barges that sit at the mouth of the ports, and offices inside some marinas. We have to check in/out all the time.

It got to the point that I refused to go to sea because of the hassle. We would just cruise our little green boat along the beach line to the inshore islands. One time I turned my AIS off and ran alongside a container ship leaving port (shadowed him at night) just to reach Banana Island just outside our port.

Even having AIS onboard (a State requirement) didn't lighten up on the hassle. Eventually I sold the boat and would not own another here. Too much trouble.

twistedtree said:

I know a number of people with foreign flagged boats in the US, and the check in requirements are a bit of a shirt show. I believe the written requirement is that you check in and report all vessel movements. So every time you depart a port and re-enter a port you need to call in. That's a pain in the ass.


That said, I know people who have called in to report movements and been yelled at for doing so. And others who have been told not to call in then been yelled at for not checking in.


It seems that it's up to the particular coast guard sector. Some want you to check in all the time, and others only want you to check in when you enter or leave a new sector. Oh, and it's up to you to magically know where the sector boundaries are, or you'll get yelled at for that too.


It's been quite embarrassing to hear of the hassles people encounter visiting out country.

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Correct, that's what I found in the regulations for foreign flagged vessels:
Any change of ports do require to be reported to CBP.
Let's define that as "no way possible".

Just to be clear: I accept to strip myself, family and the vessel down for the first US-entry to follow CBP-rules. No question!
Officially reporting "hey, here I am" on any port-change on years of a trip is a burden and not acceptable.

Here is my suggestion for someone in your situation:
Do not register your boat in Canada. There is 13% VAT plus import duty there. Your boat can be in Canada for three months as a visitor.

It is best to have a US flagged vessel for your trip. This avoids the US Cruising Permit and the need to call in at every stop. Since you are not US citizens, you cannot federally document your boat, but you can state register it. Rules differ from state to state, but Delaware doesn't care where you live, or your citizenship, and has no sales tax. I have never seen the need for a LLC.

I can't give you specifics, but there are companies in the US who process boat registration applications. They are the experts at this. Any good boat broker should be able to help you with this.

Foreign owned, US state registered vessels are very common. There are hundreds, if not thousands owned by Canadians, and we have met US boats owned by people from France and Australia.

One more thought. Check to see how long you personally can remain in the US as a visitor.

x2y3z4 said:

Correct, that's what I found in the regulations for foreign flagged vessels:
Any change of ports do require to be reported to CBP.
Let's define that as "no way possible".

Just to be clear: I accept to strip myself, family and the vessel down for the first US-entry to follow CBP-rules. No question!
Officially reporting "hey, here I am" on any port-change on years of a trip is a burden and not acceptable.

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Just try reporting port changes while cruising inland somewhere, like in the NY State Canal system. Who do you call, and do you think they will know what to do? I doubt it.

Rossland said:

Your boat can be in Canada for three months as a visitor.

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Actually it's 12 months and there are ways to get extensions on that.

Canada Border & Services Agency

Rossland said:

Here is my suggestion for someone in your situation:
Do not register your boat in Canada. There is 13% VAT plus import duty there. Your boat can be in Canada for three months as a visitor.

It is best to have a US flagged vessel for your trip. This avoids the US Cruising Permit and the need to call in at every stop. Since you are not US citizens, you cannot federally document your boat, but you can state register it. Rules differ from state to state, but Delaware doesn't care where you live, or your citizenship, and has no sales tax. I have never seen the need for a LLC.

I can't give you specifics, but there are companies in the US who process boat registration applications. They are the experts at this. Any good boat broker should be able to help you with this.

Foreign owned, US state registered vessels are very common. There are hundreds, if not thousands owned by Canadians, and we have met US boats owned by people from France and Australia.

One more thought. Check to see how long you personally can remain in the US as a visitor.

Click to expand...

That sums it up very well.

boatpoker said:

Actually it's 12 months and there are ways to get extensions on that.

Canada Border & Services Agency

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Thx, that's another step forward.

We don't intend buying a boat outside the US. I just don't want to close the door on offers from Can.

Rossland said:

Here is my suggestion for someone in your situation:
Do not register your boat in Canada. There is 13% VAT plus import duty there. Your boat can be in Canada for three months as a visitor.

It is best to have a US flagged vessel for your trip. This avoids the US Cruising Permit and the need to call in at every stop. Since you are not US citizens, you cannot federally document your boat, but you can state register it. Rules differ from state to state, but Delaware doesn't care where you live, or your citizenship, and has no sales tax. I have never seen the need for a LLC.

I can't give you specifics, but there are companies in the US who process boat registration applications. They are the experts at this. Any good boat broker should be able to help you with this.

Foreign owned, US state registered vessels are very common. There are hundreds, if not thousands owned by Canadians, and we have met US boats owned by people from France and Australia.

One more thought. Check to see how long you personally can remain in the US as a visitor.

Click to expand...

It looks like many vessels of more than 65ft are owned by LLCs or lets say "juridical persons" ie. companies. Actually it's the way I go for within the EU/Germany.

I was told the boat insurances ask for the US-social security number on their application forms. A German one is not accepted. A LLC has none.

A side-effect of founding any type of company plus investing a "substantial amount of money" (by CBP-definition...) will be a wider range of US-visa-types to choose from. There is no type of visa for longterm -just4fun-visitors. I did check and carefully study aprox 40 types of visa.

The bureaucracy of the US should not be underestimated, as should that of the EU. Ultimately, it is all about finding the right, legal but also most advantageous way.

For example: It is not our basic idea running a US flag. Dealing with US-insurances, tax regulations, local/county/state/federal-regulations on boating we are not familiar with. When it's quiet simple to me from 30y of experience getting and running a German flag for a vessel located anywhere on planet earth.
The US flag might be the way we have to go for. I dont get headache on that as long as nobody shows up with a better idea.

Checking into port.

There are also troubles for US documented vessels too. We have been cruising for over 10 years on the east coast and the gulf. In one port, for example, we had to take a taxi to the airport customs office to check in from the Bahamas. Other times we had to surrender frozen meat, fruit, etc. such a pain. Now that we stay stateside, we have the “other” problem about not overstaying our allotted time in each state. Right now, we are hurrying to get our boat out of Charleston before we exceed the 180 days, or pay local taxes. This also limits our time in SC us on the ride back south in the fall. Also every bridge tender in the AICW takes your boat name and hailing port as you pass so the tax man can get you if they so wish. Lots of timing and regulations, in spite of weather issues, not the leisurely stroll we all should have. Just my 2 cents, as the Food Lion says.

I think you are making this much to complicated and the posters to your question aren't making it any simpler. Many still use the term "Federal Registered" which doesn't exist in the US. "Registered" is a state function in all fifty states and US possessions like Puerto Rico, the US Virgin Island and Guam, even in states that have little or no access to large bodies of water.

"Documented" is for US flag vessels of 5 gross registered tons GRT or more. GRT is not related to the actually weight of the vessel. Documentation with the US Coast Guard is only available to US citizens or companies which are majority controlled by US citizens.

State registeration is available to foreign owned vessels but I wouldn't recommend it for visitors. You will be on their tax rolls forever.

There is no reason why you can's fly your EU (Deutschland?) flag anywhere you sail in US waters as long as you are properly cleared in and out. Protocol, but not the law, says that you should also fly a small US courtesy flag as well as your national flag.

Unless you are a dual US/German national you would not be allowed to transfer ownership of the boat to a Delaware company and have it documented with the USCG. This process is called "deflag/reflag" and it time consuming and expensive. And it will not help you with the tax collectors of the various states you may wish to visit.

Your best bet is to stay with your current flag and ownership and check in advance regarding the states you may want to visit so as to avoid those with ridiculous and aggressive tax laws. In any event there are probably no states that won't allow you to stay for at least 30 days.

Good luck.

Maryboo said:

There are also troubles for US documented vessels too. We have been cruising for over 10 years on the east coast and the gulf. In one port, for example, we had to take a taxi to the airport customs office to check in from the Bahamas. Other times we had to surrender frozen meat, fruit, etc. such a pain. Now that we stay stateside, we have the “other” problem about not overstaying our allotted time in each state. Right now, we are hurrying to get our boat out of Charleston before we exceed the 180 days, or pay local taxes. This also limits our time in SC us on the ride back south in the fall. Also every bridge tender in the AICW takes your boat name and hailing port as you pass so the tax man can get you if they so wish. Lots of timing and regulations, in spite of weather issues, not the leisurely stroll we all should have. Just my 2 cents, as the Food Lion says.

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That's all the reality of nomadic cruising, but has nothing to do with whether your boat is Documented or otherwise registered.

ProMaritime said:

I think you are making this much to complicated and the posters to your question aren't making it any simpler. Many still use the term "Federal Registered" which doesn't exist in the US. "Registered" is a state function in all fifty states and US possessions like Puerto Rico, the US Virgin Island and Guam, even in states that have little or no access to large bodies of water.

"Documented" is for US flag vessels of 5 gross registered tons GRT or more. GRT is not related to the actually weight of the vessel. Documentation with the US Coast Guard is only available to US citizens or companies which are majority controlled by US citizens.

State registeration is available to foreign owned vessels but I wouldn't recommend it for visitors. You will be on their tax rolls forever.

There is no reason why you can's fly your EU (Deutschland?) flag anywhere you sail in US waters as long as you are properly cleared in and out. Protocol, but not the law, says that you should also fly a small US courtesy flag as well as your national flag.

Unless you are a dual US/German national you would not be allowed to transfer ownership of the boat to a Delaware company and have it documented with the USCG. This process is called "deflag/reflag" and it time consuming and expensive. And it will not help you with the tax collectors of the various states you may wish to visit.

Your best bet is to stay with your current flag and ownership and check in advance regarding the states you may want to visit so as to avoid those with ridiculous and aggressive tax laws. In any event there are probably no states that won't allow you to stay for at least 30 days.

Good luck.

Click to expand...

I think you missed a couple of key elements in his situation. He doesn't own a boat that he's bringing over. He plans to buy a boat here. So there is no "current flag" to fly or bring over. Plus, he has considered flagging in his home country, but that makes him a foreign boat in US waters and subject to a cruising permit and reporting all port changes. Plus a need to leave the country after 180 (or maybe 360) days for a while before reentering. If you are in Fl, that's easy because the Bahamas are 60 miles away. But if you are in the mid Atlantic, or somewhere along the Great Loop, Bermuda or Canada can be a long way away. So he seems to have rejected that option, I think wisely.


These things are typically complicated because, well, because they are complicated.

Hi all, I am Dutch and are questioning the same. Not sure if we want to do the great loop with our Dutch registered sailing boat or sell ours before and buy a US trawler. After that bringing the boat to Europe what gives another challenge. After 1998 all new or used boats have to have a CE certification besides the taxes. But that is another thread. So i like to stay updated regarding the best solution.
John

Keep it non US if your not a US resident. Lots of little empires as quoted above.
For instance you cannot sail into the USVI without enetring and obtaining your 90 day visa by official scheduled air or ship. (Not Yacht). If you stay more than 90 days in US waters the fines are impressive. Stay more than 183 days in a year your considered a resident and as such welcomje to the IRS on world wide earnings. Also some of the days count into the following year etc so after a couple of years if your maxing it drops to 121 before you pay tax's etc. Keep the boat your nationality and obtain a cruising licence etc. and watch your days.