Important developments constantly reshape the shipping industry, which ultimately adapts to the new requirements. Particularly given the uncertainty of the future, the relevant players need custom-made, long-term solutions for their commercial operations. Cyprus maintains its leading position in the shipping industry, having the 11th largest fleet globally and the 3rd largest fleet in Europe.
The Cyprus flag adheres to the safety and security standards, and is on the “White List” of the Paris and Tokyo Memoranda of Understanding in relation to effective port State control to eliminate substandard shipping and promote maritime safety, protect the marine environment and safeguard working conditions on board ships. Cyprus also has a substantial input in maritime for a and international organisations, including the International Maritime Organisation, International Labour Organisation and the European Union. Cyprus has long been a fundamental, geostrategic location as the third largest island in the Mediterranean crossroads of Europe, Asia and Africa. Organisations ranging from private or family businesses, startups and multinationals establish headquarters in Cyprus.
The coastal business centre of Limassol is still a well-regarded and long-established ship registration, finance and management centre. It is home to numerous prestigious shipping companies, agents, distributors and managers. Limassol has a long history as a trustworthy hub for shipping business between Europe, Asia and Africa. In fact, Limassol caters for more than 200 companies related to shipping ranging from ship ownership, management, insurance, finance, brokerage, bunkering, chartering and maritime training, amongst others.
As regards ship registration, the Merchant Shipping (Registration of Ships, Sales and Mortgages) Law of 1963, as amended, along with the provisions of the Government Policy on the Registration of Ships, regulate the registration of ships and related transactions in the Register of Cyprus Ships (or in the Special Book of Parallel Registration). On 23 May 2019 the Shipping Deputy Ministry of Cyprus announced via Circular No. 10/2019 the new government policy on the registration of vessels in the Cyprus Register of Ships. The new policy concerns registered owners and bareboat charterers as well as managers and representatives of ships under the Cyprus flag. It has immediate effect as of 23 May 2019.
With respect to taxation, the favourable EU-approved tonnage tax regime for shipping activities in Cyprus contributes to its appeal as an international maritime centre. In addition, the Cyprus Yacht VAT and leasing scheme applies to pleasure yachts accordingly.
Moreover, the recent amendments to the Cyprus Alternative Investments Funds and the Cyprus Investment Programmer regimes give way to investment in shipping activities.
Importantly, as of 1 January 2020, the highly debated limit for sulphur in fuel oil used on board ships operating outside designated emission control areas will be reduced to 0.50% m/m, which will substantially reduce the amount of sulphur oxides from ships, toward health and environmental benefits, especially for coastal cities.
Our firm advises on the appropriate legal structure and financing vehicle for shipping activities, and all ancillary matters, as follows:
Please do not hesitate to contact us if you require further information or support on such matters.