Maritime

The Cyprus flag has had unprecedented success in the last few years, rising to a position of prominence in world shipping.

The maritime administration in Cyprus belongs to the Department of Merchant Shipping which was established in 1977. At the present time the authority has offices in Hamburg, Rotterdam, London, New York, Piraeus and Brussels.

In view of the harmonization with the EU Directives, Cyprus has ratified the extensive range of international conventions on maritime security, safety etc. Cyprus has also concluded a number of bilateral treaties for the avoidance of double taxation.

Under the Cyprus Merchant Shipping Legislation, enacted in 1963, a vessel can be registered under the Cyprus flag on the following conditions:

- More than half of the shares of the vessel must be owned by Cypriot citizens or by citizens of Member States of the EU who in the instance of not being permanent residents of the Republic will have appointed an authorized representative in Cyprus

- The total (100%) of the shares of the ship must be owned by corporations which operate in accordance with the laws of the Republic and have their registered office in the Republic of Cyprus, or they operate in accordance with the laws of any other Member State and have their registered office, central administration or principal place of business within the European Economic Area or by corporations registered outside Cyprus but controlled by Cypriot citizens or citizens of a Member State. In both the latter cases they must have either appointed an authorized representative in Cyprus or the management of the ship must be entrusted in full to a Cypriot or Community ship management company in Cyprus.

At the time of its registration the ship must be surveyed by an approved classification society.

In accordance with the legislation only lawyers are entitled to prepare the statutory documents for the registration of the vessel.

In respect to the Cyprus legislation the types of registration of the vessel are: Provisional, Permanent, Parallel (Parallel in, Parallel out).

The initial fee on the registration of the vessel fluctuates between a minimum of CYP 125 and a maximum of CYP 3.000 depending on the tonnage of the vessel.

The annual fee is estimated depending on the tonnage and the age of the ship.

The incorporation of the shipping company is governed by the Cyprus Companies Law, Chapter 113 and follows the same procedure as the incorporation of International Business Company (IBC).

Advantages:

• Cyprus has concluded double tax treaties with 34 counties
• No tax on profits from the operation or management of a Cyprus-registered vessel or on dividends received from a vessel owning company.
• No income tax on the emoluments of officers and crew
• Cyprus imposes no stamp duty on ship mortgage deeds or other security documents
• It has low set up and operating costs.