Benefits and Advantages of Ship Registry in Panama
Panama leads the world in registering boats, ships, and vessels with more than 8,200 bearing the flag of Panama.
Panama has registered over 82 million tons which equals 22% of the total tonnage in the world.
- One of the reasons for this is due to Law 57 of 2008 which reorganized the Panama merchant marine registration process.
- There are many advantages for registering vessels in Panama. Prior to Law 57, vessels were only registered for two years and had to constantly renew. Law 57 allows ships to be registered indefinitely.
- Entire fleets can be registered as Panama vessels in other countries through the Panama consulates and registration offices worldwide (96).
Advantages of Ship Registry in Panama
- Registration is open to owners of the ships, regardless of nationality. The owner of a ship can be a natural or legal person, Panamanian or foreign, based in Panama or any other party.
- The ship registration legislation approved on October 26, 1988 significantly reduced costs flag. The ships and their owners are subject to low and competitive fees and any income derived from the operation of ships engaged in international trade is exempt from tax. For pleasure craft and yachts is a single registration fee of $ 1,500 if the ship owned by a foreign individual or company and $ 1,000 if the owner of the ship is a Panamanian or a Panamanian corporation.
- Panama offers crew officers exclusive navigational training which is authorized by the International Maritime Organization (OMI).
- It is less expensive to register a ship as a Panama vessel than with other countries. While most countries only register new ships, Panama can register a vessel as old as 25 years.
- There are inspectors in major ports worldwide that examine the navigability of Panamanian vessels. Annually, through the Department of Navigation and Maritime Safety Directorate General of Merchant Marine coordinates thousands of Annual Safety Inspections (ASI), a Panamanian flagged vessels worldwide to comply with regulations and standards.
- Flexible requirements regarding the nationality of the crew.
- There is a special registration of ship mortgages that provides security for your application. A mortgage can be registered first in Panama by preliminary title registration is done through a Merchant Marine Private Consulate or Panama, by recording the mortgage document in the Public Registry.
- Special Register: The owner of a ship has the possibility of a special flag, effective for a period of three months, available at a reduced rate for vessels requiring a provisional registration for particular reasons, such as scrapping, delivery trips or other reasons.
Income Tax Advantage
Panama Corporations can be created to own Panama registered vessels in order to protect their assets and profits resulting from the business made from merchant shipping outside of Panama by paying no income taxes.
No Minimum Tonnage
- There are no minimum tonnage requirements to register under the Panama flag.
- Small boats and yachts can carry the Panamanian flag.
- Vessels over 20 years old are required to be inspected by an official Panama inspector to become registered.
Easy Transfer of Registration
- Transferring a vessel to Panama’s Registry does not require a re-survey or safety inspection if the vessel possesses valid safety certificates.
- Prior tonnage certificates are accepted so the vessel does not have to be dry docked at a considerable expense. All major Class Societies and IACS members’ surveys are accepted by Panama
Panama allows dual registration of both foreign vessels and Panamanian registered vessels with another country
- A foreign ship under charter for a period of two years (renewable) can be registered under the Panamanian flag without losing its original registration; Panamanian ships also can have a special foreign registry without losing the Panamanian flag.
- Dual flag registration is a great advantage to the shipping community that wants to retain the benefits of an open register and local register.
This is considered an advantage for European ships which could otherwise be forced to register with many other European countries at a greater expense versus an open registry offered by Panama. However, dual registration may not be available for a vessel whose ownership is in a country which does not allow it.