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Legal Incentives to Maritime Financing

Legal Incentives to Maritime Financing (Law 50, 2017)

By Belisario Porras

In 2017, Panama approved Law 50 which creates a special legal regime for financing operations of the local and international maritime sector and provides tax, migratory and work incentives.


Law 50 grants certain tax incentives through reforms made to articles of the Tax Code of the Republic of Panama and through special laws of the Republic of Panama such as Law 7 of 1990 of Leasing.

These modifications are set forth in Chapter IX of “Additional Provisions” of which we can mention among others, the following:

- Paragraph e) of article 708 is modified to the effect that, in addition to income from international maritime trade from domestic merchant ships registered in Panama, income from financing for the construction and purchase of ships that are part of the National Merchant Navy and that are duly registered, will also not be subjected to income tax.

- Likewise a paragraph is added to article 708 that establishes an income tax exemption for:

  • The income of companies that establish their operations in the Republic of Panama, with the purpose of creating construction yards for commercial ships, yachts, military ships and other types of ships for transport of merchandise or passengers and / or companies dedicated to financeable maritime projects;

  • Earnings from income arising from interests and commissions earned by ships and/or maritime financing entities stemming from granting a naval mortgage; and

  • Earning from income arising from insurance and re-insurance that guarantee credits for maritime financing entities that are duly certified and/or financeable maritime projects.

- Moreover, as part of these tax incentives, Law 50 sets forth the following:

  • It’s article 24 modifies article 23 of Law 7 of 1990, which regulates the leasing contract, establishing that lease contracts that stem from leasing of duly registered merchant ships for international maritime trade, shall not be subject to income tax in the Republic of Panama; and

  • Article 6 establishes import tax and other fees at 3% for introducing into the country, machinery, marine equipment, rolling industries, materials, tools, and other necessary elements for ship construction or the exclusive use of shipyards.

- Lastly, article 28 of Law 50 establishes that exemptions and tax incentives granted and established in paragraph e) and in the last paragraph of article 708 of the Tax Code, and in article 23 of Law 7 of 1990, shall have a duration period of 20 years from the moment the law enters into effect.


Chapters IV and V of Law 50 regulate migratory and labor incentives.

Among others, the following is established:

  • The creation of a migratory permit and a work permit for foreign workers for maritime financing entities or financeable maritime projects;

  • The migratory permit will include the permit for multiple entries and exits from the country;

  • Migratory permits will be granted within the ranges of 10%, 15%, 20%, 25%, and to workers of trust, as well as in companies that employ less than ten people, for a maximum of up to five years; and

  • Work permits shall be granted for a period of one extendable year for a period of up to five years.

PATTON, MORENO & ASVAT - Key contacts Maritime Law


María Teresa Diaz (

Belisario Porras (


Enrique Sibauste (


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