They are taking advantage of what is known as a ?Flag of Convenience?.
There are several countries offerring this facility. For the ship
owner, registering in Panama may bring the advantage of ?cheap
registration fees, low taxes, and freedom from labor laws or safety
You can find out more on the Wikipedia page.
The Panamanian Consulate provides details of the advantages of
registering in Panama.
These Panamanian attorneys provide the following information,
?The Panama Register is the largest and one of the oldest of the open
ship registers, originally established in 1925. By late-1995, official
statistics indicated 13,717 ships registered of 111.2 Million gross
tons. Of these, 6,014 are cargo ships, 2,165 are leisure yachts, 1,345
tankers, 858 fishing boats and 651 trawlers. This places Panama as a
the leading open register ahead of Liberia, Cyprus and Bahamas.
These ships are owned mainly by Japanese (60% of the ships) and Greek
(30%) interests. 60% of newbuildings around the world are entering the
Panamanian Registry. Just during early 1997 220 newbuildings were
I hope this answers your question. If it does not, or the answer is
unclear, then please ask for clarification of this research before
rating the answer. I shall respond to the clarification request as
soon as I receive it.
flag of convenience