On 16 December 2019 the European Commission approved under EU state aid rules the Cyprus maritime transport scheme. The scheme is ultimately intended to encourage ship registration in Europe and contribute to the global competitiveness of the maritime sector without unduly distorting competition
Following assessment under its Guidelines on State aid to maritime transport (“Maritime Guidelines”), the Commission adopted a decision concerning the prolongation of a tonnage tax and seafarer scheme in Cyprus, which is in line with its interpretation of the Maritime Guidelines.
As regards the Cyprus tonnage tax scheme, the Commission established that it complies with the rules limiting tonnage taxation to eligible activities and vessels. Additionally, as regards taxation of dividends of shareholders, the Commission established that it ensures that shareholders in shipping companies are treated in the same way as shareholders in any other sector. In addition, as regards the Cyprus seafarer scheme, the Commission found that Cyprus agreed to apply the benefits of the scheme to all vessels flying the flag of any EU or EEA Member State.
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. In conclusion, the scheme aims to preserve Europe’s high social, environmental and safety standards, and ensure a level playing field in the industry.
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.
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.
Moreover, the Cyprus Alternative Investments Funds and the Cyprus Investment Programme regimes give way to investment in shipping activities.
Our firm advises on the appropriate legal structure and financing vehicle for shipping activities, and all ancillary matters.
Please do not hesitate to contact us if you require further information or support on such matters.