Ships are registered in Panama for a variety of reasons, including favorable regulations, cost-effectiveness, and convenience. In this brief documentary, we’ll explore the history of Panama’s ship registry and the benefits it offers to shipowners.
Panama’s ship registry dates back to 1917 when the country gained independence from Colombia. At that time, the new Panamanian government sought to create a source of revenue by establishing a registry for foreign-owned ships. Over the years, Panama has continued to refine and expand its ship registry, making it one of the most popular in the world.
One of the main reasons why ships are registered in Panama is because of the country’s favorable regulations. Panama has a reputation for being a “flag of convenience” country, which means that it offers more lenient regulations and lower taxes than other countries. For example, Panama allows ships to be registered with minimal documentation requirements and without any physical presence in the country. This makes it easy and cost-effective for shipowners to register their vessels in Panama.
Another benefit of registering ships in Panama is the convenience it offers. Panama is strategically located at the crossroads of the Americas, making it an ideal location for ships traveling between the Atlantic and Pacific oceans. Additionally, Panama has a large number of ports and a well-developed transportation infrastructure, which makes it easy for ships to operate in the region.
Benefits and Advantages of Ship Registration in Panama
Panama is the world-leading country in the registration of ships, with more than 8200 units with the Panamanian Flag. Panama has registered more than 82 million tons, which is equivalent to 82% of the total world tonnage.
One of the reasons for this is due to Law 57 of 2008, which allowed to reorganize the registration process of the merchant marine in Panama.
96 Offices for the Panama Ship Registry around the world: There are many advantages to registering ships in Panama. Before Law 57 was applied, ships were registered for only 2 years and had to be constantly renewed. While Law 57 allows vessels to be registered indefinitely.
Entire fleets of ships can be registered at any of Panama’s 96 consular and registry offices around the world. It is less expensive to register a vessel as a Panamanian vessel than from another country. While most countries can register new vessels, Panama allows the registration of vessels up to 25 years old.
Panama offers exclusive navigation training to crew officers, for which it has the authorization of the International Maritime Authority.
- Advantages regarding Income Tax: Corporations may be created over whom ownership of vessels registered in Panama rests, in order to protect the assets and profits resulting from merchant marine operations outside of Panama to avoid paying income tax.
- No Minimum Tonnage Required: There is no minimum tonnage requirement to register a vessel with the Panamanian flag. Small boats and yachts can carry the Panamanian flag. Ships over 20 years old will be evaluated by an official inspector from Panama in order to obtain registration.
- Easy registration transfer: The transfer of the registration of a ship in Panama will not require the lifting of new safety inspection in case the ship has its safety certificate in force. The previous certificates will be accepted, therefore the ship should not be docked dry and incur considerable expenses.
- Dual Registration: Panama allows double registration (foreign ships and ships registered in Panama with registration from other countries). This is considered an advantage by European Shipowners since they would otherwise be forced to register in other countries and incur higher costs than the open registration offered in Panama represents. However, double registration may not be available for ships owned by a country that does not allow it.
- Fleet registration fee discounts: A fleet consisting of 5 to 15 vessels will receive a 20% discount in the Ship Registry in Panama. Fleets with 16 to 50 boats will receive a 35% discount and fleets with more than 50 boats will receive a 60% discount.
- Vessels under construction: A provisional registration can be requested for any ship under construction, including certification of radio calls.
- Benefits for Recreation Ship Owners: The owners of this type of boats, such as sailboats and yachts, pay an initial fee of 1500 US Dollars. However, if the ownership of the vessel belongs to a Panamanian citizen, or to a Panamanian private interest company or foundation, the cost will be only 1000 US Dollars.
In addition to these benefits, registering ships in Panama also offers legal protections for shipowners. Panama has a robust legal system that is recognized internationally, which means that shipowners can feel confident that their vessels are protected under the law.
Despite these benefits, there have been some concerns raised about the use of Panama’s ship registry. Some critics argue that it enables shipowners to evade regulations and avoid taxes, which can have negative impacts on the environment and workers’ rights. However, supporters of the registry argue that it provides important economic benefits to Panama and its citizens.
In conclusion, Panama’s ship registry has a long history and offers a variety of benefits to shipowners. While there are some concerns about its use, the registry remains a popular choice for ships around the world.
You may also like,
- What is SOLAS? – Chapters (International Convention for the Safety of Life at Sea)
- What is Ship & What is Vessel as per COLREGS