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Maritime Law in Panama

Overview

Panama is recognized for maritime transportation as a result of its geographic and strategic location. Since the enactment of Law 63 in 1917, Panama has registered all types of ships, becoming the country with the largest number of registrations in the world in 1993.

For more than 100 years, Panama has offered easy ship registration. In August 2008, Law 57 of Merchant Marine (Marina Mercante) updated and adopted a procedure for the registration of ships such as cargo ships, pontoons, dredges, and other types of vessels.

Key Aspects

  • Panama is the country with the highest number of flag registrations worldwide. Currently, there are more than 8,600 vessels registered as Panamanian, compared to the U.S. which has around 3,400, and China 3,700.
  • With 81 million tons, about 22% of the world’s total tonnage is in Panamanian registered vessels.
  • Merchant Marine is in charge of vessel registration, admeasurements, inspections, licenses, and licensing.
  • Gente de Mar is the authority responsible for captain licenses.
  • The registration of a vessel’s title can be done in a personal capacity or through a corporation in Panama.
  • Panama has an open ship registry, meaning it allows a natural or juridical person to register a ship regardless of its nationality. Likewise, there is no limit to the number of ships that can be registered.

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Advantages of the Panamanian registry

Panama has a sovereign and independent ship registry system, currently recognized by the international maritime community since 1925, and the largest ship registry globally in terms of tonnage and number of ships. Whether natural or juridical persons and regardless of their nationality or domicile, all ship owners can register their vessels under the Panamanian flag.

Income derived from international maritime trade by merchant vessels registered under the Panamanian flag is not subject to income tax in Panama. Vessels are only required to pay taxes and duties based on their tonnage, resulting in highly competitive rates.

Shipowners may hire personnel of any nationality under labor standards that have been adapted to international maritime navigation customs and practices. The Republic of Panama ratified the STCW Convention concerning working conditions onboard ships.

The market for such purpose has found ample support in Panama, through the ship mortgage, used extensively by highly positioned lending institutions worldwide, which have accepted this instrument as an expeditious and institutionally stable means of guarantee.

Under the current regulations, discounts will be granted to economic groups that wish to register three (3) or more vessels in the Panamanian Merchant Marine. Such discount will be from 25% to 60% in taxes and registration fees, depending on the gross tonnage of the vessels, which have a minimum of 30,000 and a maximum of 100,000 gross tons.

There is a fixed fee for yacht owners who wish to register their vessels with the Panamanian Merchant Marine. For yachts owned by a foreign company, the official fee will be USD $1500.00 and for yachts owned by a Panamanian company, the official fee will be USD $1000.00.

Among other nations, the Republic of China has recently considered Panama as the “Most Favored Nation”. With this recognition, vessels will receive benefits in port rates and preferential treatment in the ports of that country.

Contact us

Meeting your maritime services needs is easier with the right legal partner. The Kraemer & Kraemer team has the knowledge and expertise to better advise you on Panamanian Maritime Law. Contact us today!