[PUP] Offshore Registration

[Dave Cooper]

As a long time resident of one of the offshore company registration centers
in the world I can weigh in here for some basic info.

As a US resident or citizen you need to examine it very closely as the IRS
asks you if you hold any such entities on your tax return. Answering yes may
or may not have further implications. Answering no and having an IBC usually
does eventually.

That said a company is set up, say in the British Virgin Islands or Caymans,
or wherever, which can be used for many different purposes. One of which is
ownership of items, a boat being one of those items. The company purchases
the boat and hold title to it. How you move funds into the company is your
business but they won't be financed funds they need to be unencumbered
money. Generally a wire transfer is used which of course is a matter of
record. Cash isn't. Then again cash raises eyebrows especially with homeland
security or the DEA.

Assuming that this is an above board situation once the company purchase the
vessel or if already owned is deflagged from it present registry, it can be
flagged in the BVI, or Caymans, or wherever the IBC has been set-up. A this
point it becomes a vessel of that country. Subject to the rules &
regulations of it and carries its flag wherever it travels.

It has pluses and minuses. The initial company set-up and registration is in
the order of $2000 plus an annual fee of about $5-700.00 for both the
company and the yacht registration. This compared to the cheap USCG fees ;-)

Now that you have this Offshore company and yacht registered you are free to
insure it anywhere you like. None of the companies will most likely be US
based and their policies will be as different from each other as the US
policies are.

You may or may not have to meet the MCA standards now or in the future
depending on the use and size of the vessel. This includes crewing
requirement, radio transmitter requirements and boat structure/gear
requirement. Must different that the USCG/FCC requirements.

I'll stop here but as you see it in not a win-win for many persons.
We choose US Documentation as the expense is less, we know and understand
the rules/regulations that Swan Song must meet, we are free to come and go
in the US without obtaining a cruising permit, we self insure for the boat
but will soon have a liability policy with luck.

BTW, most of these offshore jurisdictions are selling a product. It is a
major profit center for these countries! Just like any other product the
plus's are always put front and center with "some" potential for over
selling those plus's. The downside is never on the front page and in fact is
seldom in the "brochure". You have to really dig to find the downsides as
with purchasing other products!

As always YMMV,

Cheers


Dave & Nancy
Swan Song
Roughwater 58
Puerto La Cruz
Venezuela