Here's How Rich People Dodge Taxes And Laws By Flying Foreign Flags On Their Big Boats

Image: Imperial Yachts
Image: Imperial Yachts

It may come as no surprise to you that wealthy people and multi-billion dollar corporations will do whatever it takes to skirt paying taxes or following regulations of any kind. So what do you think happens when they spend half a billion dollars on a megayacht? Obviously paying taxes on something you purchased would be too onerous, especially when it can be subverted by just flying another nation’s flag. It’s just a flag, right? Who cares? Your lifestyle is more important than paying taxes or silly things like safety inspections.

Many boat owners, including the three big cruise industry players, choose to register vessels in countries they never actually visit. This is done to avoid taxes, environmental laws, worker safety regulations, and higher wages for crew members. If you’re registered in The Cayman Islands, for example, but you do all of your sailing from Miami or San Diego, you don’t have to follow U.S. regulations, pay U.S. taxes, or sit through U.S. inspections.

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These registration schemes are handy for Russian oligarchs looking to hide their property from seizure, or massive cruise ship companies looking to dump their waste in international waters to save on costs. Flags of convenience are tax haven scams that are harming the environment, workers, and the world. It’s about time ships like these were subject to more strict maritime law.

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