The director of Hilda Loe Associates Pte Ltd shares valuable insights on registering a boat.
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If you are a boat owner or planning to buy one, it is important to understand the process of registering your boat. Registering your boat is not only a legal requirement in many countries, but it also helps ensure the safety of you and others on the water.
In this interview, we will explore how and where to register your boat with Hilda Loe. She is the Managing Director of Hilda Loe and Associates and she is also the Deputy Registrar Maritime for the Cook Islands.
Dione: Boat registration seems to me to be super complicated. Is it complicated or is it not complicated?
Hilda: It is not complicated if you do everything from the professionals. Professionals will help you with all the paperwork that you need and we’ll guide you through it. It looks daunting because there’s quite a bit of information that needs to be completed but it’s really not that difficult.
Dione: Is it complicated trying to figure out where to register? First-timers ask us “Where should we register our boat?” Is that decision-making complicated?
Hilda: I think the decision relies on where the owner is located. If you are located in this part of the world, you probably want to get someone that is in this part of the world in the same time zone as you so that you’re able to get assistance because there are tons of issues and additional certificate of entry into another port or maybe you may encounter some questions in order to go to another port that you may need additional assistance.
If you’re in the same time zone then you’ll be able to do it quite easily.
Another thing is the nationality of the client will play a part because some registry will require the flagging of the boat to be the same as the nationality of the owner.
For example, if you register a UK flag then the criteria will be either you are British citizens or you have a UK company and all that. But not everyone is like that.
In the case of Cook Islands, we don’t require that.
Dione: What are the steps through a typical registration process? How do I do it?
Hilda: After you have decided whether you’re okay with this time zone and the office is here and your nationality is not really an issue and all that, it comes down to the people who will process your needs.
You would definitely need to have some people to prove the ownership of the boat—that you own the boat—and then you have to fill up some application forms to the flag to ensure that you’re registered as the owner.
The flag will need to have information about the boat--the length, the tonnage, engine information, safety equipment on board. For this kind of thing, you should already have that information, I mean, when you buy the boat assume that it comes with the inventory list and they will give you some time to inspect and all that. You need to have that information handy.
If the boat is registered under a company, then you also need to prepare a set of company documents. For example, if you intend to register the boat under a Singapore company, then you need the Singapore business file, the directors’ information, shareholders’ information. All these are required if you register under a corporation.
Dione: How much does it typically cost?
Hilda: For us, we have a one year registration, a three year registration, and a five year registration package, so it depends on how long you’re planning to register for. We have under 16 metres and under 24 metres, so the price is slightly different. I’m sure other flags are the same.
Dione: What duration for registration do you think is the most suitable?
Hilda: My recommendation is if you do not want to go through the paperwork every year, it’s best to do the three or five years. Some people find that five years is a bit too long because they may not keep the boat for five years and sell it.
But, even if you sell the boat, let’s say you register it for five years and you sell it at year 3.5 so you still have 1.5 years of registration with us, right? Not to worry. You can actually sell the balance of 1.5 years and you can package it when you sell the boat and all you need to do is a transfer of ownership and the new owner will be able to continue with that 1.5 years.
It’s actually pretty cost-effective and it can actually be a good selling point. And the change of ownership is just a piece of paper to be signed on between the buyer and the seller.
Of course, we need to have the bill of sale to prove that the boat is now transferred to this new person.
If the buyer is an individual, we'd need their passport, address, and the necessary forms. If it's a corporation, similar process, but we'll need company documents and perhaps a board resolution to authorise who can sign the required forms.
Dione: Coming back to the cost, can you give us a general range of how much it costs?
Hilda: The general range for 1 year, it will be in the range of about under $2,000 USD and that is for under 24-footer boats, and then under $5,000 USD if you’re doing it for five years.
Dione: Typically, it’s a year-long registration and then you can decide whether you do it for longer periods at a time. Is that sort of the norm?
Hilda: In our experience, most clients just do it for three years because they find that with a one-year registration, around the tenth month, they end up redoing all the paperwork again, which can be quite a hassle.
Dione: What’s the minimum amount of time that you can register a boat for?
Hilda: The minimum duration is one year. Now, during the registration process, there are two stages. The initial stage is provisional, which requires minimal documentation from the client.
Two forms need to be completed along with the client's passport and address to establish their identity as a natural person. This initial phase can be completed within two to three working days.
The provisional registration is valid for 90 days. During this period, the client has the opportunity to review safety equipment requirements and complete any outstanding details on the forms.
The balance on the form typically tells us what the safety equipment on board, the radio equipment and things like that.
And all these things you do not need to have a surveyor to do it. If the client is competent enough to understand all those equipment items and just check through and then confirm the serial number, the model, or they can do it, and then the owner can sign off the form. So there’s no need for a surveyor.
We only need a surveyor to come on board when the boat is above 24 metres or when we are talking about doing commercial registration.
Commercial registration is completely a different thing altogether because we’re talking about the safety of paying passengers and all that different kinds of insurance involved. We are a lot more particular when it comes to commercials.
Dione: Okay. Which includes charter boats, doesn’t it?
Hilda: Yes. Correct.
Dione: So you touched before on the residency. Does my citizenship or residency make a difference to where I can register my boat?
Hilda: Just talking in general, most flag states will require you to be a resident of that country in order to be able to register the boat.
In the case of Cook Islands, for our flag, we are flexible on that. You can register the boat even though you are not from Cook Islands. You don’t have to form a Cook Islands company either just to register the boat with Cook Islands because we have something called the CIYS membership.
It’s a fee that you pay. It’s a small fee and we actually add it into the package that we market to the client. So when you pay the registration fee, we already include the CIYS inside.
So if you are a Singaporean and you want to register in the Cook Islands, you don’t have to do anything more. Just pay the fee and then we will register it in your name but you will have a CIYS membership with you. That allows you to fly the Cook Islands flag when you register the boat.
It’s the same thing for a company. They can use the company that they have currently to own the boat. Same thing, CIYS, we’ll do the qualification for the client. There is no need to incur an additional expense in that sense, so that will actually be cheaper for the client to register.
Dione: Talking more about the company thing, what are some of the reasons that people will put their boat in a company? What are the benefits of that?
Hilda: Definitely, a lot of benefits on that. One of the primary advantages revolves around liabilities. Even though the boat is intended for recreational use, accidents can happen. If an incident occurs and there's a claim involved, the liability falls on the company rather than on the individual owner.
If you register it in a personal name, then you are personally liable for whatever claims that are coming your way, whether you’re right or you’re wrong, the Court will decide, but you will have the liability.
But, if it is under a company, then the company bears the liability. You are protected in that sense. We always encourage a client to use a company to register the boat to give them a layer of security in that sense. They limit the liability at the company level.
Dione: Using the Singapore company as an example, does the residency of the directors make a difference as well?
Hilda: No, it doesn’t. The ownership will be if it’s a company, then it will be the company that is the owner. So who are the directors below? We need to know, of course. We need to have their passport and all that. We need to know who they are but we do not tie their nationality to the ownership of the boat. It’s truly a different layer.
Dione: Using the Cook Islands registration as an example, and for the citizenship requirements there, what are they for Cook Islands?
Hilda: Like I mentioned earlier, for Cook Islands, when you register the boat, if you want to use your personal name and I’m Singaporean, I register and use my name, I’m fine because I have a CIYS in there. Corporation, it’s the same. So it doesn’t matter what nationality I am as a person or as a company, we can always register for it.
Dione: That’s very convenient. That’s such a good selling point for the Cook Islands. How about GST? How does GST and tax work on both purchases? When must I pay GST?
Hilda: GST is when you import the boat into Singapore. When you import the boat into Singapore you have to pay GST. When you register the boat in Singapore, you have to pay GST. If you register the boat under the Singapore company, the Singapore company may or may not be GST registered. It doesn’t matter because when you import the boat you have to pay GST. Some people register a Singapore company and then they register GST as well.
So what a lot of people are doing is that they register the boat with a foreign flag. They use the boat here but they are not here fully so it’s “foreign registered” so there’s no need to pay the GST in that case because it’s foreign flagged and it’s foreign owned.
They may use a foreign company to own it, except a Singapore company. Just remember: Whenever you import the boat under a Singapore entity, a Singapore person, and you register it with a Singapore flag, you definitely have to pay GST.
Some people will overcome it by foreign flag and then you don’t have an issue, but the foreign flag thing will mean that your boat is not a Singapore boat so you need to go out and come back in.
Dione: What are three key tips you'd offer to people considering this?
Hilda: Firstly, consider privacy and tax exposure. Some flags, like ours, belong to offshore jurisdictions with zero tax, which may be advantageous.
Secondly, be mindful of tax exposure, especially if you're involved in chartering. Charter income can lead to income tax obligations.
Thirdly, prioritise privacy and liability exposure. Some clients would not like their information to be out in the open to know who owns this boat and so privacy is the other thing, plus the exposure to the liability.
Tax exposure is one thing. You need to look at that when you’re doing chartering because if you have charter income, you definitely will be exposed to income tax.
The other thing will be the crew restriction. Although for pleasure yacht registration, there is no NLC or many requirements because it’s private, I do know that many owners actually hire foreign crew.
For Cook Islands, we do not have restrictions on crew. Any nationality, so long as they have the proper qualification and training and have the certificates to prove that, we are able to accept them. Unlike some flags, we don't impose nationality quotas.
So, to wrap things up, registering your boat is a vital step for both legal compliance and ensuring safety on the water. While the process might seem daunting at first, seeking assistance from professionals can simplify it significantly.
About Hilda Loe: She serves as the Director at her firm, Hilda Loe Associates Pte Ltd., which specialises in a range of services including offshore and Singapore company formations, bank introductions, corporate secretarial and business management services, and yacht registration services.
Note: This interview is being run for the Boat Buyer Expo (www.boatbuyerexpo.com). You can also watch the interview on YouTube HERE.
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