Advantages for Ship Registration in Panama
Panama legislation offers several advantages for the enrollment of vessels and the registration of ship mortgages:
- Open Registry: Since 1925, Panama has had an open registry for the enrollment of vessels owned by individuals or corporations either Panamanian or foreign residing in Panama or abroad. There are no minimum tonnage or age limitations on the vessels, provided that they are in good navigating conditions.
- Broad Definition of Vessel: For the purpose of registration, Section 7 of Article 168 of Law 57 of 2008 considers as merchant vessels not only vessels intended for the transportation of passengers and cargo, but also pontoons, dredges, floating docks, hulls of any material or other objects which may be employed for maritime commerce.
- Rapid Enrollment: The enrollment of vessels under the Panama flag can be obtained in one business day whether directly in the City of Panama, through the General Directorate of Merchant Marine or through a Panama Consul duly authorized by General Directorate of Merchant Marine. After verification that all documents are in order and that the appropriate fees have been paid, a provisional navigation license and a radio permit valid for six months is issued.
- Safety: An office (“Segumar”) has been established by Panama to provide all kinds of assistance in technical and legal matters concerning Panamanian flag vessels. It also establishes policies and guidelines for compliance with regulations concerning marine navigation, safety, pollution prevention, seamen welfare, manning, and the investigation of casualties.
- Anti-pollution measures: Panama has adhered to international conventions containing regulations to avoid maritime pollution. In the case of tankers, a certificate of insurance against oil and bunker pollution is required.
- Ship financing: Law 55 of 2008, Law 27 of 2014 and complementary laws contain provisions on ship mortgages that permit the obtainment of a rapid protection for the mortgagees. Preliminary registration of a ship mortgage can be obtained within one working day whether in Panama City or through authorized consuls abroad.
The preliminary registration is valid for six months and within that period a permanent registration of the mortgage must be obtained. Panamanian Law permits in a similar manner the preliminary discharge of ship mortgages.
After the enactment of Law 27 of 2014 which amends several articles to Panama Maritime Commerce Law (Law 55 of 2008), Banks and Shipowners are now allowed to register preliminary and permanent mortgage deeds in English language without the need of translation to Spanish as previously required.
- Title Registration: The law permits the preliminary registration of title, valid for six months. Within this period, the title (Bill of Sale, Builder’s Certificate or other proof of ownership) must be recorded at the Public Registry Office.
The Bill of Sale or the Builder’s Certificate must state, respectively, that the purchaser has accepted the sale or the transfer of the vessel. Both, the document and the acceptance, must be authenticated by a Notary Public and legalized by a Consul of Panama.
- Permanent Navigation License and Radio License: Once the title of the vessel has been recorded at the Public Registry Office, The General Directorate of Merchant Marine issues a Permanent Navigation License, and a Permanent Radio License, both valid for five years that can be renewed after expiration date.
- Low Costs: A shipowner who wishes to enroll a vessel under the Panama flag, presently has to pay registration fees, ranging from U$500 up to a maximum payment of US$6,500.
- Dual Registration: Vessels of a foreign registry chartered for a period of at least two years can be enrolled under Panamanian flag for the same period of time without waving the original registry, provided that the Government of the country where it is registered, so permits.
Similarly, vessels under Panama flag can be enrolled under a foreign special registry without waving the Panamanian Registry if the Government of that country has a similar system.
- Incentives: Panama grants incentives to shipowners who wish to place under the Panama flag: new building ships, MODUS ships and vessels that belong to the same shipowning group having minimum three (3) vessels already registered in Panama.
- Other advantages: In addition to the above-mentioned advantages offered by the Panamanian Registry, owners will be pleased to learn that profits derived from the operation of Panamanian ships, engaged in international trade, are totally exempted from Panamanian income tax. Panama can also provide banking services, ship financing, marine insurance, port facilities and crews for their vessels.
In conclusion, flexible legislation and an efficient system of enrollment of vessels and registration of titles and naval mortgages permits Panama to render competitive services around the world and around the clock, thus making Panama a leading flag in the international maritime community.