UPDATE, MAY 7, 2018: Lauderdale Marine Center can now perform duty-free work on foreign-flagged yachts while they are in the foreign-trade zone (FTZ). “A foreign-flagged vessel could arrive to the FTZ and replace anything from seals to entire engines, saving up to 8.8 percent duty on these parts,” explains Doug West, Lauderdale Marine Center’s president. “Large refit projects will certainly see immense savings, but smaller projects will see cost savings as well.” Better yet, the yacht retains the standard FTZ entry benefit. This includes being able to show for sale to U.S. citizens.
Read on for our original article.
Foreign-flagged megayachts for sale can legally welcome U.S. buyers aboard in one special area of Fort Lauderdale without first paying import duty. In addition, new foreign-built megayachts can welcome American buyers there without paying import duty. The area is Lauderdale Marine Center, and it stems from being part of a new foreign-trade zone (FTZ). In fact, this FTZ is the first yachting-specific U.S. zone—and perhaps even the world’s first.
To use simple terms, an FTZ permits importing goods without paying import duties. (In other countries, the reference used is free-trade zone.) FTZs are within or adjacent to U.S. Customs and Border Protection (CBP) ports of entry. Furthermore, companies and facilities within an FTZ can defer, reduce, or eliminate those duties all together.
For more than a year, the Marine Industries Association of South Florida (MIASF), a yachting trade organization, has been working with CBP and other officials to create a yachting-specific FTZ. In December, it received approval for a 16-site FTZ subzone within an existing zone in Fort Lauderdale.
Even with the designation, however, companies operating on those sites need to file for FTZ operational approval. Lauderdale Marine Center, the largest yacht-repair yard in the States, was the first to do so. The 65-acre facility, accommodating megayachts to 200 feet (61 meters), received the go-ahead on June 7. “Gaining designation as a marine Foreign Trade Zone allows us to establish mutually beneficial business relationships with builders, brokers, and yacht management,” says Doug West, Lauderdale Marine Center’s president.
It also benefits megayacht owners. The sales of the above-mentioned foreign-built and foreign-flagged yachts are sure to see big boosts. (Restrictions do still exist, though, for foreign-flagged yacht sales. See “Foreign-Flagged Yachts Sales Bill Reintroduced in Congress.”) Furthermore, during a refit at Lauderdale Marine Center, you aren’t required to pay duties or taxes upon departing U.S. waters. If you offer your yacht for charter, she can come and go from the zone as necessary, without duty.
Even better, some benefits of the FTZ are retroactive. Say, for instance, you brought a foreign-built new megayacht into U.S. waters within the past three years. You can apply for a refund on the duties you paid if you use the FTZ.
Lauderdale Marine Center anticipates other South Florida businesses inside and outside the FTZ seeing business rise as a result of all of this. The facility itself might even expand dockage or other offerings if the demand arises.
George Goutzianas says
Awesome