Buying a used yacht abroad.

Dear yachtsmen and future owners of yachts!

 In this article we will describe you the process of searching, choosing, buying and 

 ferrying yachts.  

In this article, for clarity, we consider the procedure for buying a yacht on a specific example. The Austrian flag, a private boat, stands in Croatia under the management of a charter company. The buyer is Russian, the new flag will be the USA, and the new parking in Turkey.

 Here we describe a specific situation, but the general logic is useful if the transaction includes other countries and flags. 

1. Preparing for the trip. 

We select the options of boats that we will watch. 

The process of finding boats through the Internet is not always productive and get ready to spend time and money to search and select a boat. 

In order not to become the owner of the “scrap” it is better to contact specialists who have been engaged in maritime yachting practice for more than a dozen years and will be able to deal with all this laborious issue for a reasonable fee! 

Finding a good option can take more than one week!

 Several options should be found. 

Nuances: The boat you were going to watch may have already been sold by the time you arrive. With good options it happens all the time. Therefore, there should be several good options.

 2. Arrived, selected. 

 We come, we look at all the options.

 Easily and naturally choose one of the best yachts. It is advisable to watch together. What one does not see will always be noticed by another. If a sailing yacht is more than 60 feet (or a motor yacht is more than 50), then it makes sense to invite a surveyor, or even two. You alone cannot physically check and inspect everything that is necessary. Inspection of the yacht is a separate large topic, and tons of literature have been written about it.

 On the Internet you can easily find articles with all possible options.

 Nuances: Neither the broker, nor the surveyor, nor the owner can guarantee the condition of the yacht. More precisely, they can guarantee something, but are not responsible for their words. The final choice and decision is just your risk. Also, this nuance relates to all the following points.

 2a. Make a deposit.

We sign an agreement with the broker and make a deposit. The agreement may be called differently – Sales contract, Purchase contract or otherwise.

What should be necessarily stated in the agreement: the model of the yacht and the year of manufacture, the serial number of the hull, the amount of the deposit you paid, and the deadline for paying the principal amount, as well as the place where you will pick up the yacht. 

Additionally often write the serial number of the engine, TTX yacht, but it is not necessary.

 Further in the contract there will be a phrase: “the equipment of the yacht is the same as you saw when it was watched on such and such a number.” You can ask to make an application to the contract and separately list all that is on the yacht.

 Also, additional conditions may be included in the contract – up to what number the parking is paid, perhaps a brief history of the yacht, etc. 

Theoretically, this contract can be notarized. But there’s no big point in this, since the owner of the yacht and not even the broker’s company manager will most likely sign it, but the person who showed you the yacht on the spot. So it is usually not accepted to notarize.

 Nuances: Consider that for a broker, selling and displaying a yacht is a routine procedure. Brokers show yachts to buyers every day, they also sell quite often. And until you have paid the deposit, you are just a curious person, so you don’t need to demand too much – they’ll get it wrong. 

 The size of the deposit can be up to 30% of the value of the yacht. Depends on the cost of the yacht and the specific seller.

And, finally, the most important nuance. I already wrote above why it makes no sense to certify this contract with a notary. Ideally, the contract should have the signature of the owner, then it can be notarized and it will have legal force. But in practice, you will fly away tomorrow, and the owner is an Austrian, and at the moment he is in the Caribbean, and does not even know what the broker does with his boat.

And if today you do not make a deposit, then tomorrow a Croat or Italian will come and buy the boat you have chosen. Therefore, we must think quickly and act the same way, but not forgetting that you take the decision at your own risk and that no broker and no one else will share responsibility with you. Your money and you risk only! 

3. Payment yacht.

 Before paying the principal amount, you need to request documents confirming that the yacht is owned by the seller.

 Starting from the account and contract received from the shipyard by the first owner.

 If there were several owners, then the contracts are from owner to owner. Be sure to certificate of the yacht – this document gives the shipyard to the first owner, and this is generally the most important piece of paper. The current registration of the yacht.

If you remember, in the previous paragraph of the Purchase contract we signed it is not clear who. Before paying the principal amount, you must sign it directly with the owner of the yacht. 

Nuances: Authenticity and quality of documents confirming the legality of ownership are your guarantees that the seller will not deceive, and in the future you will not have legal problems with the yacht. All papers can also be checked with a lawyer.

 On the other hand, when you buy from a friend and a trusted broker, if he says that there is such a piece of paper, you can take his word for it and not require confirmation. 

The decision is made on the basis of ordinary human logic – whether the next delay is worth what you get as a result. 

4. You became the owner of the yacht! 

Translated the principal amount in time. 

Signed Bill-of-Sale. They sent each other originals by mail, or scans on the mail. Now you are the new owner of the yacht, congratulations!

 Nuances: Remember about the additional conditions in the Purchase contract, the term to which paid parking, insurance and when you need to pick up the yacht.

 If the parking and insurance is not paid – pay. Local broker should help. On the first visit, arrange that together with the main payment you will transfer the necessary money.

 It makes sense to make this insurance only until you make a new registration. And then make a permanent.

 Second note: If you transfer money from your local bank account, find out everything in advance. So that it did not happen that the payment term is tomorrow, and you need two weeks to issue certificates explaining where your money goes abroad.

This is not a joke, even when transferring a relatively small amount such a problem may arise. 

Translating from a card is also not always reasonable, too much transfer fee. 

5. Out of the register.

 The former owner withdraws the boat from the register. 

Time it takes from a week to a month. 

The result in the case of Austria – 4 pages of the old registration, on each of the pages is stamped Entregistrierung (deregistraton). 

No nuances, just a matter of time. As soon as the money is sent, immediately remind the broker about deregistration.

6. Registration under the new flag. 

 Several options. The first is the easiest – to persuade the broker to do everything for you. Then the registration and deregistration process will be completely invisible to you.

You will immediately learn that the registration will take another 3 months and will cost an additional 5 thousand euros. Joke 🙂

 The second option is to do everything yourself. In principle, too, nothing supernatural. You already have the documents you need – Yacht Certificate, Bill-of-Sale, certificate of deregistration, completed application for registration of the yacht, completed application for registration of the company. In the case of the US flag and registration for an offshore company in the state of Delaware, Bill-of-Sale must be filled out in form cg-1340 and notarized. Send all this to the agent who deals with your registration, pay the required amount, and after 2 weeks you will be sent a package of documents.

The main documents are a plastic bank type card (this is registration) and a letter stating that you own the company that owns the yacht. There will also be a seal of the company, stocks and similar nonsense, which is unlikely to be useful to you.  

 Nuances: If you approach strictly de jure, then in most offshore registrations you will become the violator of the law – either the law of the country in which you are registering, the one of which you are a resident, or some third. 

 It is impossible to study all the laws relevant to this issue. The only reasonable precaution is to order registration with a company that has been successfully engaged in offshore companies for at least 10 years. And communicate with them yourself, without the mediation of the broker who sold you the yacht.

 Of course, he will do everything for you, but then you still have to pay taxes every year, answer letters, etc. And if the broker forgets to respond to some letter, you will have problems, and perhaps very serious ones.

 The name of the yacht must be spelled out in a statement. This is not a mandatory item for many offshore companies, but believe me, without this, then there will be an extra headache. Think up a name in advance. Paying with a card rather than a transfer is faster and less commission when transferring. FedEx (delivery in 2 days to anywhere in the world) once delivered me the documents a month. The container is frozen at our customs. So, be sure to send copies before sending and send it to you by e-mail.

You can send an application for company registration even before you have received all the necessary documents from the seller of the yacht. As for the registration of the company no yacht documents are needed. A little time can be saved on this.

7. Insurance. 

 The choice of the insurance company is a separate topic, so I will be brief.

 You can insure in Europe, you can in Russia. Now and we have companies with a normal cost of insurance. For insurance you will need a registration plastic card, a Bill-of-Sale and a yacht certificate.

Some companies require the Boat registration certificate, but in fact such a piece of paper should not be among the official documents, which is what you have to convince them.

 Nuances: This story does not apply, but you better know about them. In France, do not insure the yacht under the flag of the United States and Russia. In some other countries, too, have their own jokes.

Do insurance in advance! Do not save on insurance. Let 10 people tell you that insurance is not needed. Do it anyway.

I personally will never go on an uninsured yacht or captain, or even a passenger. If the owner of the yacht saves on insurance, then he is a frivolous and short-sighted person (there are exceptions, so if you are among them, please do not be offended by this phrase:)

8. We are buying. 

 You have not forgotten to make a list of the necessary ship property, which must be purchased?

 On many yachts in Croatia, for example, there is no life raft. Boats with a motor may also not be included in the price.

If there is no chartplotter, I advise you to install it. The radar reflector does not always hang. Electronic charts for chartplotter and paper – on the area where you will walk. Etc. etc. The full list takes several pages. A set of flags under the spiers and the flag under which you registered the yacht aft.

 Nuances: Do not forget to stick the name, registration number and country of registration on the yacht! 

 If the boat is in a large marina, you can usually buy all the property on site. And you can order a broker in advance – they usually do this.

 9. Acceptance of the boat. 

Just check that everything works and you can go.

 To check it is desirable to live before going on a yacht for a week, actively using all systems. When something breaks, go to the broker and ask to fix it. Most likely for the money. The boat is not new.

 Nuances: Do not try to force the seller to fix everything! Too active requirements will be a simple answer – you did not buy a new boat – what’s the problem? Exception – it does not work that worked when you watched the boat. There can be no questions here – this is repaired by the seller.

 10. Various useful tips. 

 • Lay a large supply of time and money on all of the above points! 

• Take care in advance about the place in the marina, where you overtake the boat. 

• Prepare well for the haul and provide yourself with shore support. 

• Find out in advance where you can maintain the engine and electronics, where the boat can be raised. 

• Stock up with instructions and manuals for all equipment on the yacht. 

 • Ensure that the yacht passes the height below the bridges and wires on the ferrying route. 

 • The same on the draft. 

 • Do not list all! 

 11. About import to Russia. (if you decided to bring the yacht to Russia)

I advise you to entrust the process of the haul to an experienced team, and not to engage in sadomasochism … yes, you can take part in the haul, but get ready for the fact that you will be a little disappointed in your romantic approach to yachting life 🙂

 A little bit not in our example, but I will tell you quite briefly, since it is interesting to many Additionally, you will need an export declaration. Issued at the customs of the port where the boat was, or in the nearest office. Broker must know.

You can hire an agent, and you can run around yourself. In a few days the question is solved. Clearing a yacht in Russia for a private individual costs 10% plus on top 18% VAT. Total 30%.

 It is more convenient to use the services of a customs broker, and not to do it yourself. On the approach to Russia, before crossing the territorial waters, it is necessary to contact the border guards, as well as with the port authorities at the crossing of the port waters – specifically with the traffic coordinator, in order to get anchorage in the customs clearance zone.

A preliminary application for the approach of a yacht of such and such date must be submitted to the customs, as well as to the border checkpoint and the coordinator of the traffic. On the shore, you must have an agent with whom you will be contacted via mobile by arrival. Some time will have to wait outside the territorial waters, while the agent docks the border guards and customs in time, agree on a place at the pier, so as not to take them to the raid.

 If you go without warning – a fine and problems in further communication. If there is no temporary Russian registration, then the Russian flag is under a spree, and the flag of the former country is on the flagpole.

 All documents must be on board and in order. On the list of documents, consult again with the port agent and the customs broker .

Leave a Reply

Your email address will not be published. Required fields are marked *