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What is an Offshore Closing?
By: Andrew Holland
Occasionally we handle transactions where either a buyer or seller require a closing to occur outside of the area where the boat is currently lying. This is what we call an "offshore closing".
Why would one require an offshore closing?
The main reason that either party would request an offshore closing most often directly coincides with potential taxation or duty ramifications on the sale of the boat in it's given location. To avoid these potential costs, the buyer and seller may agree to perform a legal offshore closing on the sale of the boat.
An offshore closing can be defined as when a boat is sailed into international waters on the agreed day of closing – the required distance offshore for closing will depend on the boats location – and finalization of the closing documents is done directly on the boat once you are in international waters. Photos are taken of the GPS coordinates and signing of the required documents, along with a photos of the signer with a copy of the days newspaper to provide photographic evidence of the time and location of the finalization of the closing documents.
Offshore closings are most often seen in states like Florida, California and in various countries in Europe.
While an offshore closing does require logistical consideration that can potentially complicate the closing process, it does present potentially advantageous legal methods to avoid tax and duty on the purchase or sale of a vessel depending on the details of the transaction.
The procedure and requirements for an offshore closing will depend on the boats current location and where she intends to re-enter the country after the closing, so if you intend to proceed with an offshore closing it is important to consult with professionals to discuss the legal requirements that must be followed.
For questions, feel free to contact the 5 Oceans Marine Group offices at 215-508-2704.
About Andrew Holland
Andrew Holland is the Sales and Marketing Manager of 5 Oceans Marine Group and is an avid catamaran enthusiast. He began working at 5 Oceans Marine Group in 2007 after graduating from Temple University with a degree in Journalism and a minor in Marketing. Before joining TMC in 2007, Andrew worked for Philadelphia Media Holdings on the Philly.com production team and freelanced for several major magazines around the country.
After joining the 5 Oceans Marine Group team in 2007 as the Web and Marketing Manger, Andrew began working closely with TMC President and catamaran expert, Phillip Berman, where he quickly learned the many facets of the catamaran industry and soon took over the role of Sales Manager at TMC. Now, after being aboard and sailing nearly all of the major productions cats along the Eastern coastline and Caribbean, Andrew has taken that expertise to work with TMC clients, whether they are buying or selling a catamaran. Andrew has now oversaw the sale of over 800 catamarans around the world since he began working with TMC and is able to take the most complex transaction and make it a breeze! Articles by Andrew Holland include:
Seller's Guide To Yacht Sales
How Much Will That Catamaran Really Cost Me?
What Does Not For Sale In US Waters To US Residents Mean?
Catamaran Depreciation
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