What are all the benefits a cruise line gains by registering cruise ships in small or insignificant countries?

Question

Most of our cruise ships are registered in countries like Bermuda or Nigeria, etc. Does this make them exempt from U.S. laws and taxes? How about benefits, etc.?

Answer 1

The reason is exactly that.  It is MUCH cheaper to register in places like Panama and Bahamas and the laws are much more lenient.

Answer 2

It is mainly for money reasons.  where the ship is registered will affect taxes.  Also it can affect labor laws, such as if a ship is US registered and visits US Ports the crew has to be American and follow US labor laws such as paying overtime

Answer 3

The main reason is financial. Because owners pay tonnage taxes for the ships registered as above posters mentioned. Like Malta,Marshall Islands,Panama,Bahamas.. These countries doesn't have much other income,therefore they keep the taxes low and attract owners.

Also another point is, these small countries doesn't have political issues with other countries. So the vssl's will not be restricted to call certain locations.

Answer 4

One of the main benefits is taxation.

The operations and income associated with Bahamas Flag vessels are entirely tax-free, as are capital gains on the sale of vessels. Foreign-owned vessels of more than 150 GRT are also exempt from Bahamas customs duties and documentary stamp taxes, whether they call at local ports or not.

and another benefit is legal liability

Many cruise lines have chosen to incorporate their base in countries where the laws are less strict than in the United States.

Tickets normally state that all passenger lawsuits be brought to the local court where the cruise line is headquartered. You can be in U.S waters, but if the ship is registered in Panama, Panama has  jurisdiction in the event of legal problems, or you file a civil lawsuit.

Answer 5

You nailed it on the head.  If a ship is registered in the Good'Ol USofA they have to comply with US Labor Laws and pay additional US taxes.  The cost of operating a ship registered in another country is considerably less and they can utilize a labor force from around the world.

NCL is currently the only large cruise line that has ships registered in the US, and those are registered with an exception.  The exception allows NCL to operate these ships only in Hawaii, if NCL wants to operate these ships on any other itinarary they will have to reflag them in another country.

In order to be properly registered in the US they have to be built in the US as well and we no longer have shipyards that can handle these superships.  

Being flagged in another country does present other, in their opinion, lesser problems for the cruise lines that are imposed by laws like the Passenger Services Act of 1885, which has a lot of rules about when and where they can operate.