Story by Andrew Holland / June 27, 2018
Once you have a boat under contract, one of the first questions that you will ask yourself, and one that we most often get here at The Multihull Company is “How should I flag my boat?”
The answer to this question will depend on an assortment of factors in your transaction. Items such as the flag the boat is currently flying, the boats location at closing, nationality of the purchaser, and cruising plans going forward play a vitally important role in determining what flagging option will be best for you.
As an example, if you are a European citizen who is buying a boat in the US, there are advantages for you in keeping the boat under an EU flag if you did not have plans to move the boat back to the EU as you will have the option of clearing the boat out of the US after closing, and then coming back into the US and obtaining a Cruising Permit to cruise the boat without having to pay US Duty and Import tax. You will need to understand though that if you fly an EU flag and then enter into EU waters that you will then immediately be liable for paying the EU VAT on the boat.
Contrarily, if you are a US Citizen who is buying a boat in the EU, there are advantages to US flagging the boat as you will be able to obtain a Cruising permit to cruise in EU Waters for up to 18 months without having to pay the EU VAT on the boat. However, you will need to understand that if you fly a US flag and plan to bring the boat back into US Waters eventually, that you will immediately be liable for paying the US Duty on the boat upon entry.
In short, there is no one clear and best answer for what will be the best flagging option for you upon the completion of your purchase. The best way to answer this question would be to consult with an expert on the details of your particular purchase transaction, discuss your cruising plans going forward so that they can properly advise you on your options.
If you’re left wondering more specifics related to the flagging of your boat, contact us in the form below. We’re happy to give an expert opinion in this often complicated situation.
Also feel free to ask us a question and we may feature it as a Question of the Week!
Multihull Company did a great job with advertising and selling our boat. Also with the closing and documentation work. Highly recommend them and our broker, Dunbar Lewis.
Great service in buying my first boat, Chris and the team really helped by going the extra mile! I recommend them for anyone looking for a new or used boat.
My wife and I worked with Andrew Hodgdon to sell our 2021 FP Elba 45. In addition to skillfully carrying out the traditional yacht broker responsibilities, Andrew went above-and-beyond to ensure that we were well-positioned to sell in a competitive market. For example, Andrew helped out with much-appreciated repairs and hurricane prep, among other things. Trustworthy, intelligent, and conscientious, Andrew’s communications with us and the buyer were always thoughtful and forward-thinking, and fairly represented our interests.
Successful relationships cannot exist without it. At The Multihull Company we base every relationship on a firm commitment to earning and retaining our client’s 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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