Panama - Ship / Vessels Registration

The Republic of Panama, at the center of the American Continent, has coastlines on the Atlantic and Pacific Oceans, it links the two oceans through the Isthmus of Panama with one of the world's great inter-oceanic waterways, The Panama Canal.

Panama, nowadays has the responsibility of administering the world's largest fleet of vessels. It is introducing new programs aimed at making the Panamanian Registry one of the most respected and active in the international maritime community.

The General Directorate of Merchant Marine is in charge of all administrative proceeding related to the registration of ships.

Panama has become one of the world's most prominent jurisdictions for ship registries. Its status offers many advantages both to the ship-owners and to mortgagees. Between these advantages, we must note the incentives regarding the fiscal laws of Panama. All the activities of vessels registered in Panama done outside the country are not subject to income taxes or any other levy.

Additionally, Panama does not require that vessels be owned by a Local Resident of Panama. Nevertheless, since the Republic of Panama has a favorable law concerning incorporation of companies it is recommended that the vessel be owned by a Panamanian entity in order to take advantage of the limited liability in cases of collisions or accidents of the ship.

With regards to the crew members, any vessel under the Panamanian flag may hire crews from any nationality. The procedure for registration of a vessel under the Panamanian flag, is very simple and straightforward. Provisional registration may be requested differently in Panama through a legal representative (law firm) or abroad through authorized consulates by submitting the relevant information with the appropriate fees.

Through its attorneys, OMC can arrange for vessels to be registered under the Panamanian flag. Any ship can obtain, usually within two business days, a provisional Panamanian registration valid for six months. The permanent registration has a duration of four years for merchant ships and two years for yachts, and is renewable for a like term. It can be obtained following the provisional registration locally through the Directorate General of Consular & Maritime Affairs through established procedures.

Highlights

For more than 70 years, the Republic of Panama has offered various facilities for the registration of vessels engaged in all type of maritime activity.
The procedure for the registration of vessels was adopted through Law No 8 of 1925, which permits the enrollment of cargo and passenger vessels, as well as dredges, barges, floating docks and other types of vessels.

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Requirements

In order to obtain a Provisional Navigation Patent for vessels or yachts of less than 5000 net tons, the following information is required:

The following documents are necessary to register a vessel in the Republic of Panama:

Also, any mortgage on the ship may also be registered at the same time. This provisional registration of the title and of the mortgage has the same value as permanent registration

Types of Registration

The ship registry office has basically three types of registration that may be used to register a vessel in the Republic of Panama, to wit:

Bareboat Charter

Bareboat charter registration is permitted by Panama. According to our laws, a foreign vessel bare-boat chartered for a period of two years, can be registered in Panama for the same period of time without losing its previous registration, and the opposite is also permissible (from Panama to the other countries). The registration is recorded into a special registration data.

Registration of Mortgages

Panama naval mortgages are widely used in international financial circles and credit institutions of the world. The current regulations allow for preliminary registration to be carried out before the Public Registry office in Panama through local attorneys.

Under Panama Law the registration of a vessel mortgage requires that the mortgage be dated after the Provisional Navigation License has been issued. When a purchase money mortgage is involved, documents may have the same date.

In accordance with article 1515 of the commercial code, a vessel mortgage must be executed or acknowledged before a Notary Public and the signature of the Notary must be certified by a Panamanian consul.

The vessel mortgage deed must contain:

	The name, civil status, occupation and domicile of the mortgagor and the mortgagee.

	The amount which the mortgage guarantees and the sum or sums to which the lien applies for the payment of costs and interest. The rate of interest being clearly stated.

	The date of payment of the Capital, the interest and any other provisions of the contracting parties may desire concerning interest, insurance and the schedule of the accessories of the ship, which are covered in the mortgage.

	The name and radio Call Letters which distinguish the ship. A complete description of the vessel, its registration data at the public registry office and the number and expiration date of the navigational Patent.

	The appraisal or price which is assigned to the ship and which would serve as the basis for an action in case that such action should become necessary.

	The proportionate value or amount assigned to each vessel in the events that there are two or more vessels covered by the same mortgage.

Registration Fees and Annual Taxes

Under the Panamanian flag, vessels are exempted from income tax on any of the activities they are engaged. The vessels must pay annual fees and taxes depending on the activity, the type of vessel and its tonnage.

Deletion from Registry

A Ship registration may be canceled either upon request by the owner through his legal representatives or "Ex Officio" whenever the administration considers it necessary to the registration for some particular reason. No vessel is canceled when having a mortgage duly registered at the public Registry Office unless there is consent or discharge from the mortgage holder.

Finally, OMC can arrange through its attorneys in Panama the registration of any vessel under the Panamanian Flag. For further information you may contact OMC representatives.

For further information about this product please contact us at omc@omcgroup.com