How/Where do you start-up an Offshore Company?

[bass8lbs]

I am planning on buying a yacht for around $200,000 in the USA; it is a made in the USA boat so there is not any duty applicable. But bringing it back to Canada the 15% HST applies. To save the $30K, I was thinking of setting up an offshore company, register the boat in the company name to avoid the sales taxes.

Can anyone give me a starting point on researching, 'how to set-up an offshore company'?

Anyone also know how where to find regulations/requirements of an offshore registered yacht being in Canada, such as time limitations, etc. ?

If I were to charter the boat, in Ontario, would it being a foreign flagged vessel bring further complications to it being a business and insuring it?

Your comments/direction would be appreciated.

 

[bass8lbs]

Short answer is that this plan won't work. This is not a new idea If you are Canadian operating a foreign vessel in Canada you will have to pay the tax.

One way around it is to incorporate an Ont Corp to do business as a dealer and a charter company. Then you can claim back your HST

1) A Canadian opertaing a foreign vessel in Canada will have to pay the sales taxes on the vessel..... do you have a reference to legislation on that matter? Not a new idea? Happen to have a link to any other information? I've been googling my butt off to no avail.

2) Ont. Corp registered as a dealer and charter company..... why not just as a charter company? Why dealer as well? (I won't be acting as a dealer).

I appreciate your response, these are just clarifying questions.

 

[K Douglas]

1) A Canadian opertaing a foreign vessel in Canada will have to pay the sales taxes on the vessel..... do you have a reference to legislation on that matter? Not a new idea? Happen to have a link to any other information? I've been googling my butt off to no avail.

2) Ont. Corp registered as a dealer and charter company..... why not just as a charter company? Why dealer as well? (I won't be acting as a dealer).

I appreciate your response, these are just clarifying questions.

Check the Transport Canada and Canadian Border Service Agency websites. rubmeister is right. if you were to keep the boat docked in the US then you wouldn't have to pay the HST.

 

[blackrock13]

Pull the rope.

If it doesn't start, pull the rope again.

 

[oldjones]

Back when I thought about such stuff, Delaware allowed yacht-owning corporations; maybe they still do. And that traditional haven, the Cayman Island are quite boat friendly I've heard. But if your plan is to keep the foreign registered boat here in some scheme to avoid taxes here, you should be aware that Kings long ago figured out that boat owners can easily move their large assets beyond reach, and the power to speedily arrest a boat lurks in all sorts of tax and exise laws. Then they go to court.

Google is a very feeble resource for researching less than above-board <so to speak> info shared by a community that spend months out of sight of land. Pick up soime copies of Cruising World, Latitudes and Attitudes and other yachtie mags and check the small ads.

 

[Aardvark154]

This is a question for which a half-hour of a Lawyer's time might very well be worth it.

Presumably Bass8lbs you are in the GTA, which is good since the intersection of Tax and Admiralty Law is not in most people's practice.

Just from memory and with no garuntee of acuracy, further a foreign registered yacht has to spend a certain period of time outside of Canadian or U.S. waters.

 

[nottyboi]

Just get a HST # claim and input tax... but you better generate some revenue or sooner or later they will come a callin.

 

[LateComer]

Our former Prime Minister did it with Canada Steamship Lines.

http://www.cbc.ca/news/background/martin_paul/flagsofconvenience.html

 

[Aardvark154]

A lawyer is an expensive option if you simply want someone other than an anon pooner on the net to verfiy your scheme is not going to work. Call a local yacht broker or his Customs Broker. They will tell you

True, but I thought he wanted to take it further than that once he confirmed the answer you gave him.

Also whether it can spend any time in Canadian waters and if so how long.

 

[out4fun]

Pay the tax. Life will be a lot easier. Setting up a business that won't create revenue, and then expecting your HST refund to go unnoticed is not a worthwhile gamble. And an American boat in Canadian waters without an American captain would be just as big a gamble.
Budget $226k for the boat.

 

[bass8lbs]

Thank you, yes... you guys are right.
I cannot go offshore company route.
Cabotage infringements would certainly occur.
Fines, hassles, limitations etc not worth it.
Will pay the HST on entry.
Will decide to register with my Ont Inc or persoanl after.
Probably personal for ease of life.
Thanks for straightening me out!