One of the most important decisions you have to make when you are buying a yacht is the right choice of its flag. Nowadays, there is a big variety of jurisdictions which could confuse you.
You need to pay attention to issues that have a direct effect on your privacy, taxes, and your exposure to liability. The flag where a yacht is registered defines the embarkations, the legal system, and the procedures, as well as the status of the captain and the crew. It is therefore an important choice that makes the owner of the shipyard when considering registering the yacht.
The flag state has the responsibility to enforce regulations over vessels registered under its flag, so yacht registration under countries on the Paris Memorandum of Understanding (Paris MoU) on Port State Control’s black or gray list will come under more scrutiny in inspections. It`s better to choose the flag of that country which is on the Paris MoU White List.
One of the most favorable countries to register a yacht in Panama.
Panama is famous for the Panama Canal, which connects shipping between the Atlantic and Pacific oceans. However, it is also an important maritime jurisdiction for registering vessels. Panama currently has the largest fleet of vessels registered versus any other flag. There are more than 8,250 maritime vessels registered under the Panamanian flag. The total registered tonnage in Panama is over 83 million tons or about 23% of the total tonnage in the world.
Every natural or legal person, regardless the nationality and place of origin, is entitled to register vessels under the Panamanian flag.
Advantages of the Panamanian flag
The Panama Ships Registry offers competitive advantages that include:
- no minimum tonnage is required for yacht registration in Panama;
- all nationalities are allowed for builders or owners of yachts;
- an amount of US $ 1,500 to pay taxes, per yachts every 2 years, when its owner has a foreign nationality and when the use is exclusively private and pleasure. On the other hand, if the yacht is held by an owner of Panamanian nationality, a company or a Panamanian foundation, the fee is US $ 1,000;
- an exoneration of any other tax or fee in accordance with the laws in force (in Panama, the yacht owner does not pay VAT).
One of the biggest advantages of registering your vessel in Panama is the fact that no survey is needed for private yachts up to 20 years old. Most maritime jurisdictions need a recent survey by one of the main maritime survey institutes and the cost for this can be in the thousands of dollars while it takes a lot of time and effort.
Advantages of the Panama Ship Registry for yacht owners
In terms of reliability, the International Ship Registry of Panama offers several advantages such as:
- 100 years of experience in the ship registry: Panama has been at the forefront of vessel registration since 1993. It is also one of the oldest international registers, established in 1917 by Law 63;
- a classification in category «A» of the International Maritime Organization since 2002;
- quality management certification ISO 9001 by Lloyd’s Register Quality Assurance since 2008;
- an inscription on the White List of Tokyo MOU since 2002 and on the White List of Paris MOU since 2010;
- worldwide coverage of registration and maritime services: the 64 Merchant Marine Consulates and the 9 Documentation Offices, strategically located around the world, can provide support and assistance services closer to their clients (this concerns the payment of annual taxes and certificates, the issuance of Seaman Book for officers and marines, etc).
However, it’s also very important to do your due diligence in selecting a country for yacht registration by working with a professional. Once your yacht is registered in a country, all of the country’s laws will apply to your yacht.
AMP Auxiliary Registrar Office in Ukraine, Odessa, is opened for everyone to provide high-quality services regarding yacht registration and consultation 24/7.