Boat registration – Foreign Flag

In most countries of the world there are governmental institutions where the state’s vessels are registered. Each country has rules defining the terms of registration of the vessel. Some states allow the registration of vessels owned by citizens or companies of other countries, thereby allowing the vessel to fly the flag of the country of registration. This arrangement allows shipping companies or private ship owners to overcome the problems of international trade laws, policy problems or taxation problems in the countries of origin or residence of the ship’s owners. For ships / yachts there is also an option called “club registration” for small vessels that have no obligation Registration in the flag state In recent years, registration of a club has been discontinued, registration of foreign flags has become simpler and more accessible.

Registration under foreign flag

This article does not include the possibility of listing the registration conditions in the various countries. Those interested in “registering with a foreign flag” should check the conditions of registration in the given country. The process of registering in a foreign flag includes: fees for establishing a foreign company, registering yachts with a foreign flag. Treatment fees are determined by the complexity of the treatment, the type of registration and the state of registration.

Importing yachts to Israel

The meaning of “yacht import” includes sailing to Israel on its own or transporting it as a cargo on a ship. The tax on importation of a yacht to Israel is 17% VAT is levied on Israeli flag vessels and on foreign flag vessels as soon as they are imported to Israel. A foreign flag vessel may stay in Israel for 3 months as a guest in Israel, after which he must leave Israel or pay the tax as required by law. In recent years, an additional 15% import tax has been added, known as “Lapid Tax” after the Minister of Finance who initiated it. First add 15% and then 17% so that the total tax is 34.55%.

Calculation of import tax

In the past the tax was calculated according to the value of the vessel on the day of payment. The tax day is calculated according to the value of the vessel on the day it arrives in Israel, plus interest and linkage. The calculation is performed according to the assessment of the VAT assessor, and if there is disagreement regarding the value of the vessel, it is possible to present an assessment of the seller’s appraiser and accepted by the VAT authorities. Such assessment is based on the value of similar vessels, price lists and the technical condition of the vessels. In order to determine the technical condition of the vessel, a survey is carried out on the ship and a report is issued accordingly, the cost of repairing the vessel is reduced from its value in proper condition and on this basis the valuations are submitted.

Here are some important rules to know:

Who is required to register in the Israeli flag

A ship owned by an Israeli citizen or owned by a company registered in Israel or owned by a foreign company, of which more than 50% of its shares are owned by an Israeli citizen, must be registered in the Israeli vessel registry. It is not possible to keep a vessel registration in two countries (double registration).

Year of production over 7-10 years

In accordance with the Regulations of the Shipping Manager, it is not possible to import a ship into Israel and register an Israeli flag when the ship is over 10 years old and 7 years a commercial vessel. The regulation is explained by the need to maintain the proper level of safety of vessels in Israel and to prevent the importation of obsolete and unsafe vessels.

Sailing license / sailing permit (sailing certificate):

A ship in the Israeli flag must be licensed by the Ministry of Transport, the Shipping Administration. A ship in a foreign flag that is in Israel must have an Israeli permit. A 30-day delay can be obtained from the Marina Manager and an extension of 90 days from the Marina Manager.

Skippr License:

An Israeli skipper sailing a boat with an Israeli flag must hold Israeli skipper licence. An Israeli skipper sailing a foreign flag boat in Israel’s coastal waters must hold Israeli skipper licence.Skipper with a foreign citizenship (who does not have Israeli citizenship) who is sailing a foreign flag boat in the coastal waters of Israel does not have to have an Israeli skipper licence. He must comply with the requirements for an operator license of the flag state and must also have an insurance policy.

In order to receive details and to register under foreign flag, please contact:

Yuval Harari – Naval Architect & Yacht Surveyor, Marina Tel Aviv, Eliezer Perry 14 Tel Aviv 61162Mobile Phone 054-4353777 Fax 077-4701945Email: harari.youval@gmail.com

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