The registration of titles and mortgages of ships in the Republic of Panama has its origins with Law 63 of 1917, which reformed the Tax Code.
As of 1993, the Panama ship registry crossed the threshold as the largest naval registry in the world and since that date the Panamanian merchant fleet has been growing, taking as reference from January to November 2015, the Panamanian registry increased in 136 ships. Similarly, Panama keep the highest ship tonnage registered in the world with a fleet of 81 million tons that make up almost 22% of the total tonnage worldwide and a total of more than 8,100 ships registered under Panamanian flag.
Since 1970, Panama have had an efficient and reliable international banking center, however, in reference to maritime financing, the picture is not so flattering since most of the maritime financing and naval mortgages registered in the country are in favor of banks which are not based in Panama and operate from Singapore, Hong Kong, London, Dubai, Shanghai, Copenhagen, Rotterdam and Houston mainly. As a reference, we can mention that by the year 2015, 114 ship mortgages were registered in Panama, of which only 2 loans were provided by banks located in Panama.
In 2017, Panama approved Law No. 50 which creates a special legal regime for financing operations of the local and international maritime sector and provides fiscal, labor and migration incentives for companies that carry out such operations from the Republic of Panama and other provisions are issued.
The following institutions are authorized to provide financing from Panama –
Amendments to the Fiscal Code
Shipping registries such as Singapore have been favored by the commercial development of Asia and the Middle East, coupled with the maritime business platforms in those areas have reached enviable levels. For countries such as Panama, which has all the potential to become a mirror of these developed countries, together with the indisputable asset that constitutes the Panama Canal, plus the growth in the port sector and container traffic as demonstrated in the annual ranking that positioned the ports of Balboa in the Pacific as leader of container movement in the region with 3,468,286 TEU followed in the second place by the ports located in Colón with a movement of 3,286,736 TEU in 2015, this is a natural direction.
As a frame of reference, a broad consideration has been made regarding the activities that can be carried out under the aforementioned financing, such as insurance and reinsurance, investment products, securities, ship owner clubs, maritime business managers, shipping managers, P&I clubs, training schools for seafarers and other seafarers, and the installation of shipbuilding yards, among others, throughout the country.
Lic. Juan Raúl Sevillano
Pardini & Asociados offers you the Guide to Doing Business in Panama completely FREE! Download here!Get it now