Buying a Foreign-Built Boat for US Waters

Plenty of the best boats in the US market were built in Italy, the Netherlands, Taiwan or Turkey. Buying one is straightforward. Planning to charter it here is where people run into a law from 1920.

The duty is the easy part

Import duty on a recreational vessel entering the US is 1.5 percent of declared value under the usual tariff classification. On a $400,000 boat that is $6,000, payable to Customs and Border Protection at formal entry.

If the boat is already in the US and duty was paid by a previous owner, it does not become payable again. Ask for the entry paperwork, because proving duty-paid status later is much harder than filing it away now. A boat that has been cruising Florida for a decade almost certainly has it. A boat that arrived on a ship last month may not.

Duty is separate from state sales or use tax, which you will owe wherever you register and keep the boat. Several states cap that, which is a bigger lever on the total number than the duty is.

Can you charter a foreign-built boat in US waters?

Not to paying passengers moving between US points. This is the part that changes plans.

Federal law reserves domestic passenger-carrying trade to US-built, US-flagged vessels. In documentation terms, you need a coastwise endorsement to carry passengers for hire between US points, and a coastwise endorsement is generally not available to a foreign-built hull.

So the plan where you buy a Ferretti, put it into charter for twelve weeks a year and offset the slip fees, does not work in Florida. It works in the Bahamas, and boats do exactly that, which is why so many charter operations run out of Nassau rather than Miami.

For private use, none of this matters. Cruise where you like, as often as you like, with as many friends aboard as the boat holds, provided nobody is paying you for the passage.

What documentation you can get

A foreign-built boat wholly owned by a US citizen can be federally documented with a recreational endorsement. That is enough for private use and enough for a lender to record a preferred ship mortgage, so financing is unaffected.

What you cannot add is the coastwise endorsement. The certificate will say recreation, and that is the ceiling.

The practical checks before you buy

• Ask for the CBP entry documents proving duty was paid, and keep them with the title paperwork permanently.
• Confirm the build country from the builder's plate rather than the brand. Several European names have built hulls in US yards and vice versa, and it is the hull's origin that governs.
• Check the CE category if the boat was built for the European market. It is not a US requirement, but a CE Category A hull tells you something useful about how it was engineered.
• Look at the electrical system. European boats are often 230V 50Hz, and converting to US 120V 60Hz shore power properly is a real project, not an adapter. This is the single most underestimated cost in importing a boat privately.

That last point deserves emphasis. I have watched a beautiful Dutch-built motor yacht sit at a Florida dock for four months while a yard worked out what to do about the electrics. The duty was six thousand dollars. The electrical conversion was north of forty.