In the shipping sector, a Flag State refers to a nation where shipowners or shipping companies get their commercial ships or recreational vessels registered. Hence, the registered vessels have to carry the flag of that state. The vessel is then bound to the rules and regulations of the state’s maritime authority in terms of legal disputes, protections, tax payments and other benefits. In this article let us have a look at the largest flag states in the world. 1. Liberia International Ship and Corporate Registry The Liberian Registry has overtaken Panama to become the world’s largest ship registry. It has a prominent record of combining the highest safety standards for ships and crews with the highest levels of responsive service to owners, making it the fastest-growing Flag State with more than 271 million Gross Tons, giving Liberia 16.39% of the world’s market share. Image for representation purpose only There are over 5000 ships registered under the Liberian Flag. It also has the largest container ship fleet, with over 23.37% of the world’s container ships. Additionally, more than 15.25% of the world’s total oil tanker fleet (in terms of gross tons) flies the Liberian Flag. Even Clarkson’s World Fleet Monitor showed that from December 2020, Liberia outran all the open registries and grew at a pace of 8.6%, evident in the shipping market as it attracted many shipowners from Greece, Japan, China, Singapore and the United States. Hence, flag transfer tonnage accounted for 60% of its growth. The senior officer Alfonso Castillero attributed this tremendous success to their worldwide services and streamlined registration process. During the peak of the COVID pandemic, it was the first flag to offer remote vessel registrations, inspection and delivery services. New administrative offices were also opened in 2020 in cities like Oslo and Houston. Lastly, it also collaborated with Hyundai to construct a hydrogen-powered cargo ship. 2. Panama Marine Authority Panama is a small nation bordering the Caribbean Sea and the Pacific Ocean. Only one shipping company is operational in the country; however, it is the 2nd largest flag state in the world. Panama’s strategic location amidst crucial maritime trade routes connecting the Pacific and Atlantic oceans through the Panama Canal allows it to have an eminent position in the world trade network. Most commercial ships sailing under the Panamanian flag are owned by foreigners desiring to avoid the strict maritime trade regulations of their home countries. Since Panama has an open registry, the shipowners can register easily, avoid paying income tax, employ cheap labour and earn high profits. Image for representation purposes only Around 14.55% of the global shipping fleet is sailing under its flagship, more than the combined fleets of the US and China. The head of Panama’s merchant marine, Rafael Cigarruista reorganised the procedures, and compliance policies and strengthened cyber-security measures to offer the best services to shipowners and other stakeholders. He has also taken a strict attitude towards vessels breaching the established rules and regulations by deflagging them. 3. IRI Marshall Islands Registry The Republic of Marshall Islands lies close to the equator in the Pacific Ocean. Marshall Islands ship registry is placed among the top three largest ship registries in the world by gross tonnage, deadweight tonnage and the number of vessels operating under its authority, with a market share of