Importing a boat into the US, Flagging and Insurance

Here are some notes that I took while talking to an Admiralty lawyer regarding where to flag a boat which is initially destined to the USA and then the Med/South Pacific. Hopefully this will be useful to someone else. I’ll update it once we’ve actually completed this.

  • We should arrange for an RBS insurance policy for the delivery leg.
    • This policy should be a minimum of 3 months, as that’s the amount earned upon execution

This will be a one way policy.

  • Get it from Singeon Green, Singeon@rbs.co.za, +27 21 443 4400, +27 83 4596989

  • We should have a new policy in place that will take over from RBS once we get to Grenada

  • US Insurance Contact: Hugo Hanham-Gross, +1 843-276-1608, hugo@hanhaminsurance.com

  • The above policy will most likely be with Concept

    • LMIS also provides insurance, but more $
      • About the same, but also gives you hurricane coverage if needed
  • We will need 3 people with trans-Atlantic experience aboard

    • This is if you use Concept for the delivery
  • We very much want the sale to complete before 9/1 so that we can get our export papers before AGOA trade agreement expires

    • Have 90 days after getting export papers to leave ZA
  • JP Reynolds will be the importer.

    • Estimated cost ~$1K
  • You will form a US based corporation (where?) for us and will file the USCG documentation paperwork.

    • Cost $1500+1500
  • Once we head to the Canal, you will form an IBC (International Business Corporation) for us, and we will re-flag the boat to some non-US country

Flagging: There are 4 ways to do this: US or Foreign flagged with the boat owned by US Corp or IBC

  • US Flag/US Corp

    • Can get insurance in US, Caribbean, and Med
    • Can’t get insurance in South Pacific
    • about $800 yearly fees
  • Foreign Flagged/US Corp

    • Duty free in the US
    • NO IRS Tax
    • insurance unlikely available in South Pacific
  • Foreign Flagged/IBC

    • Set up cost between $12-14k
    • Annual Fees are between $2-4k
    • IRS Year Tax:
      • $4-5K first year
      • $2-3K next year
    • Can repatriate boat into US for about $1K

Things we need to be aware of as a US Registered Vessel:

  • As a MA resident, we never want to bring the boat into MA, as we could be subject to 6.25% personal property tax if caught
  • Must watch out for staying past 60 consecutive days in FL
    • Can go to the Bahamas or Georgia to reset days

Lots of great information!

One thing I was curious about: the issue of not being able to insure in the South Pacific.

We imported our vessel to the US. It’s Coast Guard documented/US flagged. We’ve been in the South Pacific for 2+ years and have had no issues getting insurance.

Any idea why you were told you couldn’t get insurance?

This information came from Eugene Samarin, the admiralty lawyer.

Who are you insured through?

Our insurance broker is Kerry Payne at The Marina Shop.

This is from our insurance binder notice:

“We are pleased to provide you with your Certificate of Insurance and your policy wording. The Insurer is Great Lakes Insurance SE, UK Branch (“GLISEUK”), a subsidiary of Munich RE and their credit ratings are available via a link on the home page of our website: www.themarinashop.com

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We are in the process of signing up with the Marina Shop. They seem pretty good. Not pushy, but engaged whenever we have questions. And considerably less expensive than what we had before…if we stay out of the US.

We are flagged Marshal Island. We also imported the boat into the US, which originally we were told we did not have to, it only helps if you want to sale the boat to someone in the Us.

But we found another helpful issue if it is imported. Since a foreign registered boat needs a 12 month cruising permit, they tell you you have to leave the US for some time, after which you can reinter to get another 12 months. But if you as a US citizen, and the boat is imported…you can get a new 12 month cruising permit without leaving. I had surgery and could not leave so this was very useful. Most Homeland Security staff do not know this. If you need this, let me know and I will send the details from from their manual. We did this in Cape Canaveral.