What Are International Waters and Why They Matter in Yacht Transactions

International waters play a crucial role not only in global shipping and environmental policy, but also in private yacht transactions. For yacht buyers, sellers, and brokers, understanding the legal and geographic boundaries of international waters is essential for structuring deals efficiently, legally, and with reduced tax exposure.

This article provides a clear explanation of what international waters are, how they are defined under international law, and why they’re often used as a preferred zone for yacht ownership transfers and registration changes.

What Are International Waters?

International waters — also known as the high seas — refer to areas of the ocean that do not fall under the jurisdiction of any single country. These waters begin 12 nautical miles (22.2 kilometers) from the baseline of a coastal nation’s territory, beyond what is known as its territorial sea.

Once a yacht crosses this boundary, it leaves national waters and enters a maritime zone where international law takes precedence over local regulations. This allows for increased legal flexibility, especially in ownership and taxation matters.

Importantly, international waters make up a vast portion of the planet’s surface — covering nearly 50% of the Earth — and are the setting for most long-range yacht deliveries, transfers, and private deals.

Key Maritime Zones Defined by UNCLOS

The modern legal framework governing maritime zones is defined by the United Nations Convention on the Law of the Sea (UNCLOS) — an international treaty signed by more than 160 countries. UNCLOS outlines how ocean space is divided into specific zones, each with different legal implications.

Here’s a breakdown of the three main maritime zones relevant to yacht owners:

Territorial Sea

Extends up to 12 nautical miles from a country’s baseline. The coastal state has full sovereignty over this area — including customs, tax, environmental, and immigration laws. Any transaction conducted here is subject to that country’s legal and tax rules.

Exclusive Economic Zone (EEZ)

Extends from 12 to 200 nautical miles offshore. The coastal state retains exclusive economic rights (such as fishing and resource extraction), but private legal transactions — such as yacht ownership transfers — are not directly governed by the coastal state’s laws.

High Seas

Beyond 200 nautical miles from any country. These waters are fully international and governed by global treaties. Vessels are subject only to the laws of the flag state (the country where the yacht is registered) and relevant international conventions.

Understanding these boundaries is critical for structuring yacht transactions in a way that minimizes complications with local authorities while ensuring full legal validity under maritime law.

Freedom of Navigation: A Foundation of Maritime Mobility

One of the fundamental principles recognized under international maritime law is the freedom of navigation. This principle allows vessels, including private yachts, to move through international waters without interference from coastal states.

In practice, this means:

• no single country can restrict the movement of a privately owned yacht beyond 12 nautical miles from shore
• yachts are free to transit, anchor, and conduct lawful activities, including private sales or transfers of ownership
• national tax, customs, and regulatory requirements generally do not apply beyond the territorial sea

For yacht owners and buyers, this freedom translates into a neutral legal environment where transactions can occur under consistent international rules — primarily those of the vessel’s flag state.

Why Yacht Transactions Happen in International Waters

Selling or transferring ownership of a yacht in international waters is a common and well-established practice. Such transactions typically occur once the vessel has exited the territorial sea and is either underway or anchored legally in open water.

Professionals involved may include:

• maritime lawyers
• brokers representing both parties
• a notary or registrar to oversee and document the signing
• an independent marine surveyor to verify location and technical condition if needed

Benefits of offshore transfers include:

• legal certainty — the transaction is governed by one jurisdiction: the yacht’s flag state
• tax neutrality — the sale is not automatically subject to import duties or VAT
• confidentiality — there are fewer public filing or reporting requirements
• administrative simplicity — no need to comply with local transaction rules in multiple coastal countries

This structure is particularly attractive for high-value yacht sales, international buyers, or those utilizing offshore holding companies.

Real-World Benefits for Yacht Buyers and Sellers

Avoiding Import Duties

If a yacht is sold within a country’s territorial waters, it may trigger import duties, VAT, or other taxes, depending on local law. These obligations can be substantial — often amounting to 20% or more of the vessel’s value.

By conducting the transaction in international waters, buyers may be able to:

• delay import until the yacht enters a jurisdiction of their choosing
• select a country with more favorable tax treatment
• structure the deal in a way that avoids import status entirely (e.g., flagging the yacht in a zero-tax jurisdiction)

This can result in major cost savings and more flexibility in long-term planning.

Ensuring Clean Title Transfer

Offshore sales also reduce legal risk by allowing the parties to complete the transfer under one unified legal system — usually that of the flag state. This minimizes the chances of:

• overlapping or conflicting claims
• legal disputes involving coastal states
• title issues arising from multiple registry systems

For subsequent resale, refinancing, or chartering, having a clean, internationally recognized title simplifies due diligence and boosts market confidence.

The Legal Framework: UNCLOS and Its Role

The United Nations Convention on the Law of the Sea (UNCLOS) is the foundational legal document that defines how maritime zones function and which rights and obligations apply in each.

UNCLOS regulates:

• the definition and extent of territorial seas, EEZs, and high seas
• navigation rights and responsibilities of vessels
• what states can and cannot regulate beyond their coastlines
• fair access to international waters and the peaceful use of ocean space

For yacht transactions, this means that:

• parties can legally conduct ownership transfers offshore, provided they comply with flag state rules
• no single country can claim jurisdiction over a deal made in the high seas or EEZ
• buyers and sellers can rely on internationally accepted principles to validate their transaction

Conclusion: Why Understanding International Waters Matters

International waters offer far more than a scenic backdrop for cruising — they provide a practical legal framework for structuring yacht transactions. By conducting ownership transfers offshore, buyers and sellers gain:

• neutrality from coastal jurisdiction
• greater legal certainty
• the ability to avoid or defer taxes and import duties
• simplified documentation governed by a single flag state
• enhanced confidentiality and operational flexibility

These factors are especially important in today’s global yacht market, where vessels often change hands across borders, under different flags, and through offshore entities.

However, to fully benefit from international waters, yacht owners and brokers must understand the basic structure of maritime zones and the role of UNCLOS — the international treaty that governs them.

With proper planning, awareness of jurisdictional boundaries, and support from legal and maritime professionals, international waters can become a strategic asset in high-value yacht transactions.