What is Offshore Flagging? Offshore flagging refers to the registration of a yacht in another country, most frequently the Marshall Islands or Cayman Islands, for buyers who intend to use their yacht in the U.S. but do not intend to permanently import the yacht. It should only be considered by owners who intend to take their yacht to a foreign port at least once a year. Offshore flagging is generally available to yachts longer than 12 meters (39 feet).