One of the most common — and misunderstood — scenarios in international yacht sales is this:
The boat is physically located in Mexico, but it is U.S.-flagged, U.S. Coast Guard documented, and the buyer wants to keep it that way.
The good news?
This is very common, completely legal, and very manageable — if it’s handled correctly.
Here’s how it works, and what buyers should know.
1. Location Does NOT Determine Registration
A yacht’s flag and registration are based on ownership and documentation — not where the boat is parked.
A yacht can be:
- Sitting in Ensenada, La Paz, Cabo, or Puerto Vallarta
- And still be 100% U.S.-flagged and USCG documented
As long as:
- The vessel is owned by a U.S. citizen or qualifying U.S. entity
- And it remains properly documented with the U.S. Coast Guard
Its U.S. status stays intact.
Mexico does not require U.S.-flagged yachts to re-register locally.
2. The Vessel Does NOT Need to “Leave Mexico” to Transfer Ownership
A major misconception is that the boat must return to the U.S. to complete a sale.
That is false.
The sale can be completed while the yacht remains in:
- Ensenada
- La Paz
- Cabo
- Or anywhere in Mexican waters
The Coast Guard documentation is transferred by:
- A U.S. Bill of Sale
- A new USCG application
- And a closing process handled by a documentation agent
The boat never has to move.
3. The Buyer Applies for New USCG Documentation
After closing, the buyer files:
- Application for Documentation
- Proof of U.S. citizenship or qualifying entity
- The notarized Bill of Sale
The Coast Guard then:
- Cancels the seller’s documentation
- Issues new documentation in the buyer’s name
The vessel never loses its U.S. flag.
4. Mexican Temporary Import Permit (TIP)
Because the yacht is physically in Mexico, it must have a Temporary Import Permit (TIP).
Important facts:
- The TIP belongs to the owner, not the boat
- When the boat is sold, the old TIP must be canceled
- The new owner must apply for a new TIP
This is handled by:
- A Mexican customs agent (or online via Banjercito)
- Often coordinated during closing
This has no impact on U.S. registration.
5. No Mexican VAT or Import Tax Is Triggered
When you buy a U.S.-flagged yacht in Mexico and keep it foreign-flagged:
- You do not pay Mexican import tax
- You do not pay Mexican VAT
- You do not register it in Mexico
As long as it stays under a TIP, it remains a foreign yacht temporarily cruising Mexico.
6. Why Buyers Prefer to Keep U.S. Documentation
Keeping a yacht U.S.-flagged provides major advantages:
✔ Easier financing
✔ Easier resale in the U.S. market
✔ Better insurance options
✔ No foreign registry compliance
✔ No VAT exposure
✔ Simpler exit back to the U.S.
This is why most U.S. buyers choose to keep their yachts U.S. documented even when cruising Mexico for years.
7. How a Proper Closing Is Structured
A clean Mexico-based U.S. yacht closing typically includes:
- U.S. Coast Guard documentation transfer
- U.S. Bill of Sale
- Escrow handling of funds
- Cancellation & re-issuance of TIP
- Insurance binder before ownership transfer
- Closing coordinated by broker + documentation agent
From the buyer’s perspective, it feels exactly like buying a boat in San Diego — even though the boat is in Mexico.
Final Thoughts
A yacht being physically in Mexico does not change its nationality.
If the boat is:
- U.S. Coast Guard documented
- And owned by a U.S. buyer
It remains a U.S. vessel — no matter where it is cruising.
Handled correctly, buying a U.S.-flagged yacht in Mexico is smooth, tax-efficient, and one of the smartest ways to acquire a cruising yacht for Baja, Cabo, and beyond.
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