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What determines registration?

Discussion in 'General Yachting Discussion' started by area51child, May 4, 2006.

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  1. area51child, May 4, 2006
    #1
    area51child

    area51child New Member

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    What determines where yachts are registered, what flag they fly, where they berth, et al? (Ex.: Octopus is registered in Cayman (I think), berth in Antibes, and flyes the Cayman flag, does it not matter or it is all just dodging taxes? [Limitless is up a peg because if flies the stars and stripes. If this is true, he would rather get hosed on taxes than "sail" with another flag, that is pretty cool.]) Thanks.

    P.S. What determines what city is on the back of the yacht?
  2. daiwa, May 5, 2006
    #2
    daiwa

    daiwa New Member

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    Good Question,

    Big question. Some countries/Islands does not have a ValueAdded Tax for cruisingships at all - meaning you can buy even a smallest sailingboat without tax - making a huge discount comparing for regural retailsprice. You can see even secondhand market many boats marked as "taxes has not been paid". I am not quite sure what kind of limitations this kind of boats/yachts have if any. I think some offshore locations like many of those located in Caribian area also gives yachtowner´s some other tax reliefs related to his/her assetts.
  3. Arniev, May 5, 2006
    #3
    Arniev

    Arniev Senior Member

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    Flag of Convenience?

    Are you referring to Flag of Convenience?

    A flag of convenience is a flag of one country, flown by a ship owned by a citizen of another country. The ship owner can thereby often avoid taxes and make registration easier; the country providing the flag charges money for that service.

    (Ref: http://en.wikipedia.org/wiki/Flags_of_convenience)

    :)
  4. Kevin, May 5, 2006
    #4
    Kevin

    Kevin YF Moderator

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    I've often wondered what motivates an owner to go one way or another. Tax is obviously the "big one" when it comes to reasons... but like area51child mentions, national pride is a big issue for some as well. At what point does that pride stop coming before business sense?

    Another yacht I've wondered about is the latest PJ120 "Vanquish". It's flagged in the USA (Sturgeon Bay, WI to be exact) but the article in Showboats mentioned mediteranean owners...:confused:
  5. Arniev, May 5, 2006
    #5
    Arniev

    Arniev Senior Member

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    For private yacht owners, while taxes play an important role in determining yacht registry, personal and national pride weighs in too.

    However, for commercial shipowners, -money- and -business sense- are the only things that matter. Not only do they strive to pay lower taxes, they are not required to adhere to basic human and trade union rights for seafarers.
    There's an article on this in globalpolicy.org's website.

    :)
  6. Codger, May 5, 2006
    #6
    Codger

    Codger YF Wisdom Dept.

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    Many reasons including the above.
    Some countries like the US have severely protectionist / restrictive cabotage regulations.
    Legal liability issues also come in to play.
    Also depends where the vessel will be spending most of it's time. As an extreme example, an Israeli flagged vessel will have issues going to Dubai.
    EU countries and Australia have some of the most regressive VAT issues to deal with so flagging anywhere else makes a lot of sense.