Recent data show that at least 16% of the world fleet navigates under the Panamanian flag.
According to the latest statistics published by Clarksons Research in 2020, an English company that manages databases of the maritime sector, the Panama Ship Registry reported a growth of 2.7% until November, in terms of gross registered tons (GRT), the growth is registered despite the global crisis caused by the COVID-19 pandemic.
According to the Panama Maritime Authority (AMP), “the Ship Registry is at the best moment in the last decade, of the almost 30 years that Panama has been the leader, consecutively, in the flagging of ships. The accumulated growth of the Registry between the months of July 2019, when the administration of President Cortizo began, and October of 2020, was 6.10%, which represents the most important figure in recent years. 10 years”.
Rafael Cigarruista, Merchant Marine Director of the AMP, “We have managed to reduce the cancellation of ships by 20%, which is very positive and is the result of the reengineering and analysis of information that we have been doing, and the creation of the business intelligence department.”
With these results, the Panamanian registry accumulates a total of 8,499 ships and 228 million GRT. This is a growth of 10.6 million GRT, which positions Panama as the leader with 16% of the world merchant fleet.
Why is this happening?
Based on these five (5) aspects we deliver:
Flags on Boats
These days, it is essential that all vessels have a nationality and show the flag of the country where they are registered. When a boat is found in international waters, it is subject to the laws of the place where it was registered and, therefore, the State exercises jurisdiction over the ship and the people that are on it.
Panama Grants Nationality To A Ship Regardless Of The Operator’s Residence
Panama’s Maritime Authority has the legal authority to grant nationality to a ship regardless of the operator’s or owner’s residence. All vessels with the Panamanian flag are governed by the laws of this country. Plus, the working conditions of the sailors must be those recognized by the International Maritime Labor Convention, of which Panama is a signatory.
The act of granting nationality to a vessel offers benefits to both the country that registers it and to those who resort to it. For the country, the advantages come from the income that they receive from the payment for the right to register, although the State assumes responsibility for the lives of the Panamanian people onboard. For those who register the ship, not only do they comply with an international standard, but they also receive the legal support of the place where they have registered the vessel.
The Owners Can Be Nationals Or Foreigners
The Panamanian boat registry accepts vessels that belong to Panamanian citizens or foreigners. All ships have to comply with Maritime security, prevention, and control of contamination standards, among others.
The procedure for registering vessels with the Panamanian flag is simple and very quick. Any person or offshore company can apply. The first step is to make the request for a Provisional Registration. This can be completed through a Panamanian lawyer or also at the Panamanian Consulates abroad. There are currently more than 96 offices for the Panamanian Ship Registry around the world.
Exonerations
Vessels with Panama Flag are exonerated from payment of income taxes or charges for retention when the income obtained by the ship is the product of international commerce. The idea is like the way offshore companies in Panama work: income taxes are never paid when income is obtained abroad.
Another important advantage is that there’s no need for a minimum tonnage to register a boat in Panama. Therefore, yachts and small containers can show the Panamanian flag.
Start your process today!
Our team of Maritime Law experts can assist you with the process of registering and flagging your boat under the Panamanian flag, as well as obtaining your navigation patent. Send us a note to info@kraemerlaw.com to have our Client Relations team guide you through the process
