Pre-Launch Prep & Admin

Title your Catamaran

Normally, your hull number is issued about two months before your boat is splashed, or around the time of your fourth- stage payment. This allows time to secure a first title and flag with this hull number. The twelve-digit hull numbers are issued according to either United States Coast Guard guidelines for U.S. flagged yachts, or EU guidelines. If you need something else for a specific country, please alert us as soon as possible.

How does Balance get these hull numbers?

We work with ASAP Marine Documentation in Fort Lauderdale, Florida, USA to issue all U.S. hull numbers in coordination with our builders. ASAP Marine Documentation also collects from the builders the documents you will need to secure a first title. This entails a Manufacturer’s Statement of Origin and a Builder’s Certificate from our builders in South Africa.

Contact details for ASAP:

Alicyn Reeder Drujak-President
ASAP Marine Documentation & Registration, Inc.

www.registeryourboat.com

A proud member of the Howard S Reeder, Inc.

9627 South Dixie Hwy, 2 nd Floor
Miami, FL 33156
Phone: 954-926-2387
Fax: 305-381-6795

Obtain MMSI Number and Call Sign Requirements

After you are issued a hull number, you will need to apply for a Maritime Mobile Service Identity (MMSI) number. 

A Maritime Mobile Service Identity (MMSI) is a nine-digit number that uniquely identifies ship stations, ship earth stations, coast stations, coast earth stations, and group calls. MMSI numbers are transmitted over a Digital Selective Calling (DSC) radio or Automatic Identification System (AIS) unit.

To do this, the builder will need to provide you with electronic equipment numbers so you can apply. 

The best place to do that with ease is:

  1. Register at https://apps.fcc.gov/coresWeb/publicHome.do
  2. Apply for the MMSI through the FCC web site: https://wireless2.fcc.gov/UlsEntry/licManager/login.jsp. The form is a bit complicated with many options, but all are reasonably well explained. 
  3. We recommend paying the fees with a credit card, rather than a bank transfer or other means.
  4. After filling out your MMSI application It will take 2-3 business days to process and get your MMSI number

You can also use www.boatus.com and it will give you the forms to fill out. 

NOTE: As soon as you get this number, it is important that you send it to your builder.

Marine Insurance

Before we launch your boat, you should have researched and chosen the insurance company for your yacht so they can “bind coverage” when the yacht is turned over to you from the builder. 

Insurance is influenced greatly by:

  1. The quality of your sailing resume and experience, courses taken, miles at sea, other yachts you have owned and of course, your claims history.
  2. The waters you are sailing at what time of year.  Why? Because insurance rates will be higher for a long ocean passage, staying in hurricane zones during hurricane season, etc. Coastal insurance is lower than blue water insurance, for instance.
  3. The flag you carry will impact which carriers will cover that flag and the rates. Note: U.S. flag insurance carriers will generally charge more for U.S. Yachts due to the litigious nature of our society.

We suggest you shop around as you wish, but a few brokers we have worked with are:

Alan Nederlanden
MHG Insurance Brokers
alann@mhginsurance.com
Office: 954-869-0028 or
Mobile: 954-817-0707

Anthony Ballinger
Vice President
E/G of Florida, Inc.
100 Linton Blvd Suite 305A
Delray Beach FL 33483
561-305-2540 Direct
888-887-8988 Fax
Email: Anthony@egflorida.com
www.egflorida.com

Darren Lewis
Edward William Marine Insurance Worldwide
Centro Nordico – local 12-13, Crta. De Mijas, Km 4,5, 29651 Mijas, Spain
Email: info@edwardwilliam.com
+34 951. 250 .931
+44 0 800. 047.258

Pre-Launch FAQ

Is there more I need to do to operate the vessel in South Africa Waters?

The list is fairly simple on your end, but work does need to be done by our South African builders. So, for your part:

  1. Flag your vessel,
  2. Name your vessel,
  3. Obtain your MMSI number and radio call sign as noted above.

It is important that the boat registration papers, the call sign, and the MMSI reach the builder at least two weeks before the boat is launched. Why? This paperwork is needed by our builders to obtain a CoF(Certificate of Fitness.) Without a CoF we can’t do sea trials on your completed catamaran or complete the final prep for your launch.

For instance, to apply for the CoF, the builder’s must have a full set of safety equipment to obtain a so-called A license.

Europeans and Americans use the word tax a bit differently. The VAT is a tax, but Americans view it more like a duty. 

If you are a European, you must discuss all forms of tax or duty with an expert in your region or country to adopt the best tax strategy for your needs.

If you are a U.S. resident, tax on yacht sales is always a state issue, not a national one. Each state applies different rules to sale taxes (when you buy a boat) and some have use taxes. Many states in the U.S. have no taxes at all. What is the case is that if you are buying a boat in South Africa, you cannot be charged a sales tax in a specific state since you did not buy it in that state, or even in the U.S.  California works very hard to collect their taxes and stipulates that you must spend some defined period out of the state, from first use, or are still subject to tax or arrival. Tax laws are always changing, and we encourage you to discuss state taxation with an expert or consult with your state’s website.

A California lawyer who is expert in California tax is:

William E. Dysart, Esq.

Certified Specialist, Admiralty & Maritime Law,

The State Bar of California Board of Legal Specialization

Wright, L’Estrange & Ergastolo

402 West Broadway, Suite 1800

San Diego, California 92101 U.S.A.

Telephone:  619 231 4844

Facsimile:  619 231 6710

Email:  wedysart@wlelaw.com

ASAP Marine are experts in Florida tax issues and some other states. (See contact information above.)

Ocean Skies are experts in Euro tax issues. (See contact information above.)

Unless you are a South African citizen, no. We will provide you with export papers during your commissioning, so as long as you do not spend more than three months  in South Africa you will not be obligated to pay any tax or duty when you take possession of your Balance. If you must stay longer for any reason, we can apply for an extension. 

In Cape Town, we will handle all your papers for export. We work with Pronto Clearing. The approximate fee for this service is $600 to $1,000.

Once this process is complete, you will be issued a SAD500, which is a tax clearance certificate, allowing the boat to be exported.

For a U.S. documented vessel the process is easy and straight forward, and ASAP Martine Documentation will apply for your U.S. Coast Guard document. 

The cost for the USCG document and ASAP’s fees to cover USCG charges and procurement are currently:

  • First USCG Registration $625 1yr
  • Additional $104 for 5-year documentation
  • Priority Processing $50
  • International Courier $100
  • Delaware LLC $750 (includes Corporate Kit and EIN)
  • Tender title and registration in Florida $175
  • Florida registration for vessels – if needed – $350

ASAP Marine can provide specifics for a few other states as well, but those prices vary and depend on local legistlation.  Please call for options/pricing:  954-926-2387

 

Yes, you can. The advantage to this is simple liability protection. This is, of course, not required, but many people do this. ASAP Marine can set up an LLC for you. These are state -issued LLCs, and you should discuss with ASAP which state you prefer, and the costs for establishing the LLC you prefer. 

 

Yes, you can. If you are a U.S. citizen or resident, however, it is probably not wise to do so. The reason for this is that, currently, and as it has been for many years, South African- built yachts carry so-called Favored Nation Trading Status. This means that, on first arrival in U.S. waters, you can import your boat Duty Free, although there is a still a small fee for a bond to the U.S. Government. This fee will change a bit on each boat, but on the last 526 we imported the total cost was under $600. 

We use a customs agency in Florida called Steel Reeder and Associates. They have been in the business for decades and manage all of our clients’ customs and import needs. You can contact them at:

Trey Reeder

treyreeder@howardsreederinc.com

Howard S Reeder Inc
9627 South Dixie Hwy 2nd Floor
Miami, FL 33156

Tel: (305) 371-8431
Fax: (305)381-6795

Please understand that while we advise clients to take the simplest and least costly path to flagging and documentation there may indeed be circumstances where spending more can save you money on taxes or duties. Setting up a BVI flag, or a Cayman flag, or any offshore flag is usually several thousand dollars with annual fees of a few thousand dollars more to sustain the corp and flag. 

Again, there is little sense to do this for a U.S. yacht owner on a duty-free yacht. 

However, if you were buying a catamaran built in China, for instance, avoiding a 25% duty would be a compelling reason to set up a BVI flag, for instance. As your Balance Catamaran has favored nation status, this is unnecessary. 

 

On first entry into continental U.S. waters. 

You must “declare” that you bought this foreign yacht. The U.S. Virgins Islands does not count here as only continental land. Puerto Rico??  U.S. Customs is charged with this duty. 

Please note that many people do not understand that the work of the U.S. Coast Guard and U.S. Customs are separate. Only, U.S. Customs handles entry declarations.

As a U.S. resident or citizen, however, you can obtain a U.S. flag and fly it on a boat any place in the world without paying duty. But, duty is paid on first entry into U.S. continental waters to U.S. Customs.

 

Once you import a yacht under a U.S. flag, that duty free status remains with the yacht for life so long as she does not DROP the U.S. flag. If she drops the U.S. flag, meaning someone flags her in some other country, she has to be reimported when she first comes back to U.S. waters. 

French yachts must pay a duty that amounts to 1.7% of their value when first imported. Chinese Yachts now are hit with a massive 25% duty. The only way they can avoid this duty is to set up an offshore corporation and arrive in the U.S. with a foreign flag. They must then apply to U.S. Customs for a Cruising Permit to move from port to port with heavy restrictions. They can only get such a permit for a year before having to clear to a foreign port. The boat cannot be shown or operated or sold in U.S. waters to any U.S. resident unless the duty is paid first. This may lead to complications when you wish to resell your yacht in the U.S. 

There is not duty on your Balance as a South African-built yacht, the import cost is small, and once done remains with your yacht, making resale in the U.S. at any time very simple and easy. 

Because our yachts are all CE Certified (a requirement to get any EU flag) any EU citizen can fly the flag of their choice upon the purchase of their yacht in South Africa. And as with the U.S., they can fly and register their boat in, say France, and sail anyplace they wish without paying what is called VAT. But when they first come to EU waters, they will be immediately subject to VAT. 

VAT means value added tax, and it is a significant tax, ranging from 18 to 22 percent of a yacht’s value. And it is due immediately on first entry to EU waters. The VAT is to some extent like U.S. duty in that once paid, it remains with the yacht when resold to another EU citizen. But only an EU buyer values the status. A U.S. buyer or those of other nationalities gain no benefit from buying an EU boat as they can sail in the EU without paying the VAT for up to 18 months at a time before clearing to a non-EU country. 

Similarly, an EU resident gains no benefit from a U.S. Duty Paid yacht. 

As VAT is applied differently in different countries, and the laws are always changing (for example with Brexit, the UK is no longer a member of the EU. At this time, it is unclear what restrictions or issues British citizens will face when they wish to sail in the EU.)  It is for these reasons that we refer our customers to a yacht documentation expert in Europe.

One company we have worked with and had great customer satisfaction with is Ocean Skies. You may contact them here as follows: 

Duncan Swanson
Principal
Oceanskies Limited
T: +441481711994
M: +447781116118
E: duncan@oceanskies.com
W: www.oceanskies.com

 

Australians and New Zealanders also have what are called GST and/or other taxes/duties. And here again, a buyer may assume a New Zealand Flag in South Africa upon launch, or an Australian, or Langkawi, or BVI, flag or more and not be subject to any duty. The obligations to pay these sorts of duties or taxes are on first entry back to NZ, OZ, or whatever duty/tax requirements you may face with the country you are flagging with. 

Taxes can be generally assumed to be due on first entry to the flag nation. Here again we strongly suggest you consult with an expert who understands the advantages and disadvantage of flagging in a specific manner to avoid or lower duty or tax depending on one’s nationality or cruising agenda. 

If you are flagging in a specific country and that country needs specific documents other than a Builder Certificate, Manufacturers Statement of Origin, or the 12-digit hull ID we offer, please alert us and we will provide what you require so long as it is not a significant additional cost for the builder to procure.

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