Story by Andrew Holland / May 15, 2018
It is a common theme for our clients to ask us how they can legally avoid paying US Duty and Import tax on their boat when they are entering US Waters. So, is there a way for you as a boat owner to legally avoid paying US Duty when entering the US?
The simple answer to the question is yes, you can avoid paying duty on a vessel when sailing into the US. However, this does not necessarily mean that it would be beneficial, or financially prudent to do so. So, how can you legally avoid paying Duty on a vessel?
The only way to legally avoid paying US Duty on a boat when first clearing into the US is by foreign flagging the vessel. Whether through a Virgin Island Corporation, Jamaican corporation, Cayman Corporation, or many others, a boat owner may choose to create a corporation and foreign flag the boat under this corporation. The downside of this approach of course is the cost to set up the corporation and any annual maintenance fees that may be due on the corporation. Depending on the type of corporation being set up the costs can vary, but can exceed several thousand dollars.
Foreign flagging the vessel will enable a boat owner to enter into the US under whatโs known as a Cruising Permit which allows foreign flagged boats to cruise in US Waters for a period of up to 12 months, before being required to clear out of US Waters. It is important to note however that a foreign flagged vessel lying in US Waters that is in the US on a cruising permit cannot be sold to a US Resident while in US Waters without paying US Duty. This is often why you will see the โNot For Sale in US Waters to a US Residentโ tag on certain vessels. (Read more about this here)
The trade-off of foreign flagging your vessel will be determined by the value of your vessel, and your plans moving forward with the boat. If itโs your plan to cruise up and down the eastern seaboard on a boat with a value of $200,000 with plans to eventually sell her in the US at the end of your cruise, the tradeoff of paying a few thousand dollars to set up a corporation and having to clear out of the US every 12 months is likely not worth it to save the cost of paying US Duty that would amount to approximately $4,500. (Read more about the cost of US Duty here)
However, if you have a larger yacht or mega-yacht, only plan to occasionally cruise in US Waters, and eventually sell her offshore, the benefits of foreign flagging your vessel which enables you to obtain a cruising permit during your time in US Waters may be worthwhile.
I recently sold my Lagoon 450 with the Multihull Team. I would highly recommend their services. The professionalism and personal treatment I received was greatly appreciated.
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Helped me through the process.
I would go through them again in a future purchase.
The Multihull Company made the process of buying our boat easy and predictable. Both our agent (Francisco Montaner) and Andrew Holland communicated well and educated/informed us of each step in the process. I highly recommend The Multihull Company for those shopping for a catamaran!
Chuck at The Multihull Company is the real deal.
He helped us find our Lagoon 40 after genuinely listening to what we needed, not just what he had to sell. He let us visit the boat multiple times, answered every question honestly, and helped us make a confident decision on a major purchase.
What impressed us most was the post-sale support. Once the paperwork was signed, Chuck was still picking up the phone, offering referrals, and helping us work through the early stages of liveaboard life. That kind of follow-through is rare.
If you are looking for a multihull and want someone who knows the boats and actually cares about the outcome, Chuck is the person to call.
We just purchased a 2025 Nautitech 44 Open with The Multihull Company. The process of getting here has been great, and we could not have asked for a better agent. We worked with Conor, whom we met at the 2025 Cannes Boat Show. We started our search for a cruising catamaran in Florida at the beginning of the year. We spent a couple of months looking at different boats/models within our price range and quickly narrowed it down to what really mattered to us, in part thanks to the wealth of knowledge and expertise our broker provided. When we found a perfect match in Montenegro, Conor and The Multihull Company did not hesitate to continue supporting us and to lead the efforts from start to finish with great care and transparency. Communication and support have been outstanding throughout this entire process. Conor, in particular, showed great compassion and care, going above and beyond to ensure that no stone was left unturned and that we would be able to safely and happily sail off into our big adventure.
Successful relationships cannot exist without it. At The Multihull Company we base every relationship on a firm commitment to earning and retaining our clientโs trust.
Advice of any kind is valuable only when grounded in hard-won expertise. It too, must be trustworthy. Trust and expertise define the heart and soul of The Multihull Company. We are a team of skilled professionals who thrive on providing expert, trustworthy advice and service to catamaran and trimaran sailors around the globe.
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