Panama Flag of Convenience:
The term flag of convenience describes the practice of registering a merchant ship in a sovereign country different from that of the ship’s owners. Ships are registered under flags of convenience to reduce operating costs or avoid the regulations of the owner’s country. The term open registry is used to describe an organization that will register ships owned by foreign entities.
The modern practice of flagging ships in foreign countries began in the 1920s, when shipowners frustrated by increased regulations and rising labor costs began to register their ships to Panama. The use of flags of convenience steadily increased. As of 2011, more than half of the world’s merchant ships are registered under flags of convenience, and the Panama Merchant Marine is currently the leading jurisdiction worldwide for vessel registration under a flag of convenience.
Main advantages of the Panama Open Registry:
- Low costs
There are considerable lower costs for panama ship registry compared to other Jurisdictions.
- No minimum tonnage for vessels registrations
There is no minimum tonnage required for the registration of a ship in Panama.
- No nationalities restrictions
Absence of restrictions regarding nationality, which means that any person or company is able to register a vessel under the Panama flag.
- Dual Registration accepted
The possibility of dual registration. Vessels registered under the Panama flag but under charter to a company incorporated in other country, may also be simultaneously registered in that country.
- Preliminary registration of title / mortgage globally accepted
Preliminary registration of title / mortgage is easily accepted by US, European and worldwide banks as providing satisfactory security.
- Major class survey societies accepted
All major Class Societies and members of IACS are authorized by Panama to survey Panamanian vessels.
- Considerable tax advantages
Income gained by vessels engaged in international trade is not taxed by the Republic of Panama.
- Vessels under construction can obtain provisional registration in Panama
Vessels under construction may also apply for the provisional registration and radio call letters in Panama.
- Advantages for Pleasure Vessels (Yachts, Boats, Sailing Vessels)
There is a sole enrollment charge of US$1,500 for Yachts, however, if the yacht is owned by Panamanian natural person, Panamanian IBC or a Panama Foundation this charge shall be of US$1,000.
Contact to register your ship or yacht in Panama.
Our Firm of Panama Maritime Lawyers will be glad to assist you and provide all the legal services related to the registration or enrollment of vessels and yachts under the flag of the Republic of Panama. We can assist also with the registration of mortgages over these vessels as well as other services connected to maritime activities. Feel free to contact us for any questions.