Can I keep a boat at an Israeli marina and register it in Israel if I am not an Israeli resident?

Herzliya, Tel Aviv and Ashkelon marinas are full of boats whose owners live somewhere else for most of the year, so the practical answer is plainly yes. The legal answer splits into three separate questions that people tend to run together: who may be on the Israeli register, what happens at customs when the vessel arrives, and what the berth contract actually gives you. Only the first is governed by shipping law, and it is the one with a citizenship test in it.

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Detailed Answer

The Shipping (Vessels) Law 5720-1960 sets the eligibility rule for the Israeli register. A vessel may be registered where more than half of it is owned by the State of Israel, by an Israeli national, or by an Israeli corporation. A foreign national or foreign company is not shut out entirely, because the Minister of Transport may permit registration where satisfied that a sufficient link exists between the vessel and the State of Israel, conditionally or unconditionally. That discretion is exercised sparingly and takes time, which is why most foreign owners keep the vessel on its existing flag and simply berth it here. Small craft are treated separately: vessels under seven metres in length are exempt from the main register and their particulars are kept in a small boats register instead, which removes the ownership problem for most day boats and RIBs. The regulator throughout is the Administration of Shipping and Ports at the Ministry of Transport, which also enforces the manning, safety and survey rules, imposes fines and can detain a vessel. Skipper qualifications are a separate matter again, and a foreign certificate is not automatically valid for operating a vessel in Israeli waters.

Customs is where non-residents get an unwelcome surprise. A visiting yacht arriving under its own power can be handled as a temporary import while its owner remains a visitor, but a vessel that is brought in permanently, sold to a buyer here, or left in the country beyond the temporary regime, is an import like any other. Section 2 of the Value Added Tax Law 5736-1975 charges tax on the importation of goods, so VAT at 18% attaches to the vessel's value alongside any duty. On a boat worth EUR 200,000, roughly NIS 800,000, that is about NIS 144,000 of VAT before anything else. Two further points repay attention before you commit. A marina berth in Israel is normally a licence for a defined period rather than a property right, so it does not appear on any land register, cannot be mortgaged, and may not transfer automatically with the boat when you sell. And where the vessel came to you through an Israeli estate rather than through a purchase, the succession order has to issue before the register or the marina will deal with anyone, which follows the same pattern as the transfer of any other titled chattel, set out in our answer on transferring a deceased relative's Israeli car to heirs abroad.

In Practice: Under the Shipping (Vessels) Law 5720-1960 a vessel is eligible for the Israeli register where more than half of it is owned by the State, an Israeli national or an Israeli corporation, and the Minister of Transport may otherwise permit registration where a sufficient link with Israel is shown. Vessels under 7 metres go on the separate small boats register. The regulator is the Administration of Shipping and Ports at the Ministry of Transport. On permanent importation, VAT at 18% applies to the vessel's value, so a yacht valued at NIS 800,000 carries about NIS 144,000 of VAT before duty, and a ministerial permission application for a foreign owned vessel should be allowed 3 to 6 months.

When to Consult a Lawyer

• You are buying a boat that is already lying in an Israeli marina. Whether Israeli VAT and duty were ever paid on it is the first question, because an unpaid liability follows the vessel and the seller's assurance is worth nothing against the Customs Division.
• You intend to charter the boat out while you are abroad. Commercial operation engages the manning, survey and insurance requirements enforced by the Administration of Shipping and Ports, and it changes the tax treatment of the income in Israel.
• The vessel forms part of an Israeli estate. Berth licences and registration entries are not distributed by agreement among the heirs, and the marina will hold the boat, and keep charging, until a succession order and a clear instruction arrive.

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Speak With an Israeli Attorney

We check the vessel's customs history and register position, deal with the Administration of Shipping and Ports on registration or ministerial permission, and review the marina licence before you sign it.

Contact us for a confidential initial consultation.