Why merchant ships use flags of convenience

Why did flags of convenience become widespread after the Second World War?

Tax incentives were central, because flags of convenience commonly offered shipowners lower-tax registration regimes.

Tax incentives offer a concise economic explanation for the postwar growth of flags of convenience. Shipowners can register vessels under states whose tax regimes reduce operating costs. That choice separates the flag shown by a merchant ship from the owner's home country or the routes it serves. Legal registration and commercial incentives therefore shape the apparent national composition of merchant fleets.