Cruising Licences for Yachts in the United States

Introduction

U.S. cruising licenses (also known as cruising permits) exempt pleasure yachts of certain countries from having to undergo formal entry and clearance procedures at all but the first port of entry for the yacht in the United States.

In certain states, for example Florida, a yacht is not usually deemed to be imported into that state if qualifying for and legitimately operating under a cruising licence and it is therefore generally not subject to state use tax.

Cruising Licence – Criteria

There are two fundamental criteria for a yacht to qualify for a cruising licence:

• The yacht must be owned by a natural person (i.e. an individual) or a legal person (i.e. a company) who is established (i.e. resident) outside the United States or Puerto Rico, and
• The yacht must be of a foreign country that has demonstrated to the to the satisfaction of the Secretary of the Treasury of the United States that there are reciprocal arrangements for U.S. yachts operating in that country’s waters. The current list of qualifying countries is as follows:

*Great Britain includes its Crown Dependencies such as the Cayman Islands and the British Virgin Islands (BVI)

Cruising Licence – Restrictions

There are two fundamental restrictions for a yacht to operating under a cruising licence:

• Cruising licenses are granted only to private yachts. The commercial operation of any yacht, i.e. for charter purposes, is not permitted.
• Yachts operating within US waters under cruising licences cannot be sold or even offered for sale or charter to any US resident.

Cruising Licence – Time Allowed

The cruising licence is valid for a maximum of one year.

Cruising Licence – Arrival in United States

Cruising licenses are obtainable from the U.S. Customs and Border Protection (CBP) Port Director at the first port of arrival in the United States. The CBP information centre states the following with regard to the procedures for arriving in the United States:

“….The master of a pleasure boat must report to U.S. Customs and Border Protection (CBP) immediately upon arriving into the United States from a foreign port…  ……Cruising licenses exempt pleasure boats of certain countries from having to undergo formal entry and clearance procedures and can be obtained from the CBP Port Direct at the first port of arrival in the United States.”

Cruising Licence – Departing the United States

The CBP information centre states the following with regard to the procedures for departing the United States:

“If traveling via boat with a cruising permit, do I have to report our departure to Customs and Border Protection (CBP) when leaving the U.S.? Yes, pleasure boats from foreign countries must obtain clearance before leaving a port or place in the U.S. and proceeding either to a foreign port or place or going to another port or place in the U.S.”

Cruising Licence – Criteria for Obtaining Another Cruising Licence

A new cruising license will only be issued if following two conditions have been met:

• At least 15 days have elapsed since the previous license either expired or was surrendered, and
• The vessel arrives in the U.S. from a foreign port or place.

CBP will want to see foreign clearance paperwork as evidence that the vessel is arriving from a foreign location.

It is advisable for yacht owners to plan their cruising schedule carefully so that the mandatory 15-day period does not fall in the middle of a planned stay in U.S. waters. It is also sensible for yacht owners to surrender their cruising license to a CBP Officer when leaving U.S. waters for a foreign port so that a new licence can be applied for on re-entry to the U.S. It should be noted that traveling outside of U.S. waters while a cruising license is in effect does not fulfill the aforementioned 15-day requirement.

Oceanskies – Non U.S. Yacht Ownership & Registration

Using its independence and experience of ownership, registration and documentation of yachts, worldwide Oceanskies has put together a non-U.S. corporate ownership and registration package which can assist with the operation of yachts under the cruising licence system whilst in U.S. waters. The key stages of the Oceanskies offshore structure are as follows:

• Incorporation of a yacht owning company in the British Virgin Islands (BVI) by a third party specialist, local company formation and administration agent.
• The BVI company contracts for the build or purchase of the yacht which will be registered in the name of the company by Oceanskies at the client’s preferred offshore port of registry, (for example the Cayman Islands, BVI, Guernsey or Jersey).
• The yacht is delivered to the BVI company outside the USA in a foreign port.
• Oceanskies will utilise the services of US customs agents to effect local arrival formalities for the yacht in advance of arrival in U.S. waters from the foreign port.

For further information please do not hesitate to contact us either by using the message form below or by email to: mail@oceanskies.com

Disclaimer

This guide is for general information purposes only and does not constitute any kind of fiscal, legal, tax, importation or immigration advice. Further information the concerning cruising licence and arrival formalities for foreign yachts entering the United States can and should be obtained directly from the CBP prior to arrival in U.S. waters. A copy of the Code of Federal Regulations containing the rules applicable to the issue of cruising licences can be downloaded here:

• Code Of Federal Regulations – License To Cruise In The Waters Of The United States