Why “Wait and See” is the Only Smart Play for US Catamaran Owners Right Now

If you are the owner of a US-flagged vessel currently lying in the Caribbean, Europe, or Mediterranean and are considering selling your vessel you have likely spent the last few months doing some uncomfortable math.

With the recent uncertainty surrounding the legality of the new executive tariffs—ranging from 15% to over 50% depending on your vessel’s country of origin—many of you are understandably looking for an exit ramp and your options to consider in the sale of your boat, and the best place to do so. The most common question hitting my desk in recent weeks has been: “Should I reflag my boat to a foreign registry (like the Marshall Islands, Cayman Islands or BVI) and put it in a foreign holding company so I can bring it home without paying the tariff?”

It is a clever legal strategy. It is a well-worn path for superyachts. But as customers have asked me this question in recent weeks, my answer right now is simple: Don’t do it. Not yet.

Here is why “cautious pragmatism” is the only strategy that makes sense until the Supreme Court rules.

The Strategy You Are Considering

To understand why you should wait, we first need to look at what you are trying to achieve. The “loophole” being discussed involves deleting your vessel from the US Coast Guard documentation and registering it under a foreign flag, typically owned by a foreign corporation (e.g., a BVI or Cayman company) that you control.

Under US Customs and Border Protection (CBP) regulations, a foreign-flagged pleasure vessel can apply for a Cruising License. This license allows the vessel to cruise US waters for up to one year without formally “importing” the boat.

• The Benefit: You avoid paying the import duty (1.5%) and, more importantly, the punitive “Trump Tariffs” (Section 301/IEEPA) that could amount to hundreds of thousands of dollars.
• The Catch: While in US waters under a Cruising License, your vessel is strictly “Not For Sale to a US Resident.” You can list it, but your marketing must legally carry the disclaimer: “Not for sale in US waters to a US resident.” To sell it to an American, you would eventually have to pay the duty and tariffs you were trying to avoid, or physically move the boat back to international waters (like the Bahamas) to close the deal.

The “Non-Decision” Dilemma

This strategy works. We have had clients who utilize it successfully. However, executing this maneuver requires significant legal setup, corporate formation fees, and maritime attorney costs.

Here is the problem: The entire legal foundation of these tariffs is currently under review by the United States Supreme Court.

Oral arguments regarding the constitutionality of using the International Emergency Economic Powers Act (IEEPA) to impose these tariffs were heard in November 2025. The Court is currently in a state of “non-decision,” with a ruling expected as early as Spring 2026.

This creates a binary risk for you:

1. If you reflag now: You will spend thousands of dollars forming foreign companies and hiring lawyers to change your flag. If the Supreme Court rules in passing that the tariffs are illegal or unconstitutional three months from now, you will have spent that money for nothing. You will be stuck with a foreign corporate structure you don’t need and a boat that is harder to sell to US buyers because of the “Not For Sale” restrictions.
2. If you wait: You maintain your current US status. If the Court upholds the tariffs, you can then execute the reflagging strategy. You have lost nothing but time.

The Cost of Being Wrong

Reflagging is not just swapping a sticker on the stern. It involves:

• De-registration: Removing the vessel from the USCG.
• Foreign Corporation Setup: Incorporation fees and annual maintenance for a Cayman or BVI entity.
• Tonnage Surveys: New measurements required by the new flag state.
• Legal Fees: Maritime attorneys to ensure the “beneficial ownership” structure complies with CBP rules for a cruising license.

If the tariffs are struck down, the standard 1.5% US duty—which most owners are accustomed to—will likely remain the only tax. Is it worth spending $15,000+ on a complex legal structure to avoid a tax that might disappear on its own in 90 days?

My Advice: Hold Fast

We are advising all The Multihull Company clients to pause. Do not rush into forming foreign entities. Do not de-register your US vessel yet if you still have the flexibility to keep your vessel in foreign ports over the next few months safely. 

The legal landscape is shifting under our feet. Until the Supreme Court issues its definitive ruling on the IEEPA tariffs, the smartest move is to keep your powder dry. We are monitoring the docket daily. As soon as a decision is handed down, we will know exactly which course to chart.

For now, let’s keep the boat US flagged, keep your options open, and wait for clarity.

Do you have specific questions about your vessel’s location and tax status or obligations? Contact me directly at Andrew@multihullcompany or fill out the form below and we can review your specific situation and prepare a “Plan B” so you are ready to act the moment the ruling is public.