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Delaware Yacht Registration

What you should know about Delaware yacht registration.

Delaware yacht registration is very popular among both domestic and foreign boat owners. It has particular appeal for those looking to avoid taxes and assessments which are typically associated with yacht ownership. This, combined with the fact that corporations are easily formed and relatively anonymous, makes Delaware a popular choice. This summary presents a general overview of what Delaware registration is all about, why it has become so prevalent worldwide, and how it relates to other methods of boat registration. You will also gain some insight as to implications of registering an offshore yacht in the State of Delaware.

True Meaning -  In order to understand the true meaning of a Delaware yacht registration, you will need to know about the differences between registration, titling, and documentation here in the United States. This is especially important for foreign owners who are looking to establish an offshore yacht registration. A great deal of misconception exists about Delaware registrations with regard to a vessel's nationality and tax status.

State Registration Defined -  Boat registration in the usual sense is a process by which state jurisdictions grant operational privileges for all types of watercraft. This is evidenced by a certificate of registration which must be present on the boat when underway. A registered boat may operate on that particular state's waters and acquires visitation rights in other states. Boat registration is also a means of revenue enhancement as it is typically associated with the collection of fees and taxes.

State Titling Defined -  State boat titling is often equated to registration, but serves an entirely different purpose. This is a service provided in certain states that affords an owner with a certificate of ownership for the subject boat. Although boat titles are typically issued in conjunction with a first time registration, this is not always the case. They may be attained on a stand-alone basis under certain conditions. Boat titling is mandatory in some jurisdictions, optional in others, and not even offered by certain states.

Coast Guard Documentation -  Coast Guard vessel documentation is a federal or national form of registry which takes priority over state level registration and titling. In order for a boat to become documented, it must be approximately 25' or greater in length and owned by U.S. citizens. A documented vessel is said to be flagged which means it enjoys certain protections afforded to vessels abroad which have national registrations.

Delaware Registrations - Delaware is known as a "non-title" or "registration only state" because it does not offer boat titling services. These registrations are evidenced by a small registration card which is issued by the Division of Fish and Wildlife. Foreign applicants should be aware that this is not a title or national certificate of documentation. It affords no rights of nationality under the U.S. flag when used for vessels travelling abroad.

Taxes and Fees - Most states utilize the boat registration process to collect a substantial amount of fees and taxes. However, Delaware is a "non-tax" state and registration fees are minimal. Combine this with relaxed registration policies and it is easy to understand why Delaware registration is so popular. As for domestic owners, the tax advantages may not apply because boats here in the states are taxed according where they operate rather than the place of registration.

Corporate Formation -  Boat owners can also establish legal holding entities such as corporations and limited liability companies in Delaware. The rules are relaxed, fees are reasonable, and residency is not an issue. Although not required for boat registration purposes, this lends support to such action and offers the owner a degree of anonymity.

Registration Services -  There are a number of private business enterprises, both domestic and foreign, that offer Delaware yacht registration services. At a substantial cost, they will handle everything from start to finish with respect to both corporate and boat registrations. They will even generate an official looking yacht registry certificate which affords an impression that the vessel is U.S. flagged. This is misleading however, because Delaware is not a sovereign state and can not produce certificates of registry or documentation on behalf of the U.S. federal government.

Application Requirements -  Procedures for registration in Delaware are basically the same as those for any other state. The applicant must produce sufficient evidence of ownership, identify the vessel, and complete an application form. Citizenship is not an issue and the owner does not have to be a Delaware resident. However, an applicant must certify that Delaware will be the place of principal usage for the subject vessel unless operated outside of U.S. waters.

Implications - The registration or title status of any boat can have serious implications with regard matters of law enforcement and taxes. Given these circumstances, you may wish to ensure that the appropriate conditions apply before registering a boat in the State of Delaware. In making such determination, it may be advisable to consult with a qualified marine attorney or tax consultant.

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