Panama's Ship Registry is number-one worldwide. Due to the very low registration taxes and fees as compared to other countries throughout the world, ship registration under the Panama flag is widely used by international shipping companies.
At the time of registering into the Panamanian Merchant Marine, all vessels must pay a one-time enrolment fee, based on a graded scale, plus a government fee. Registration of the bill of sale is $0.20 per net registered ton or fraction thereof, plus 20% surtax. Annual tax is $0.10 per net ton, plus other charges.
Liberal labour laws concerning Panama flag vessels are also an important consideration, and income earned on international shipping activities are specifically and expressly exempted from Panama income taxes.
At the end of the day its money.They found a niche in the market where ship owners would flock to - the reason so many more mickey mouse registers came into place or FOC as they are commonly called. Try this webpage
I thoroughly agree with your comments but the point I am trying to make is how difficult it is to trace registration numbers for Panamanian registered vessels up until the 1980s in comparison to other registries. As I am trying to compile a fairly thorough record I have found this to be quite a stumbling block in trying to verify when vessels changed names etc. The Panamanian registry seem to be very loath to provide any information whatsoever.
Panama gained its independence from Colombia in 1903 prior to 1916 ships on its register were mostly small, locally owned vessels, the largest being the coastal steamer "Panama". In 1916 Panama opened its registry to ships owned by Panamanian corporations which were in turn owned by foreigners. The first ship so transferred was the "Belen Quezada", owned by Central American interests through a Canadian company. She had the misfortune to be in a Costa Rican port in 1921 when Panama and Costa Rica went to war over a border dispute and was seized by Costa Rica as a prize of war.
The Panamanian flag was particularly attractive to United States shipowners seeking to avoid restrictive US legislation and wages. Two early transfers were the passengers liners "Resolute" and "Reliance", transferred partly to cir***vent US prohibition laws.