Under a bareboat charter agreement, a ship owner leases a ship to an operator or management company – the charterer – which then becomes responsible operating party for the vessel and its operating . Panamanian Law, which allows Dual Registry, establishes the legal frame work that allows a vessel, already registered in one state, to be registered under the convenience flag of another state for the duration of the agreed charter party agreement, which is generally for two years
Such dual registry system (Panama Bareboat charter agreement) enables a charterer, whom has entered into a leased of a ship registered in a country that doesn’t have an open registry based system , to benefit from the advantages of the Panama Registry without losing its status in its mother registry. Thus allowing the ship owner to maintain the original or main registration, which will remain in force , but suspended while the bareboat is under a status quo during the dual registration and shall regains its effective status upon termination of the charter.
Applying for the bareboat registration, the Charterer through his appointed counsel in Panama ( GERLI & COMPANY) must file at the Panama General Directorate of Maritime Affairs the following Panama maritime documentation :
The bareboat registered vessel shall be subject to the payment of the same registry fees payable by other vessels having a normal registration in Panama, as above outlined.
A bareboat charter registration will not serve the same rules and obligations as a normal registration, therefore property deed registration will not become necessary, neither will any encumbrances against the vessel be registered in Panama.