Cyprus has established itself as one of the leading maritime centers of the world. The number and tonnage of the ships on the Cyprus Register until 2002 was 2.153 and 24,9 million respectively.
The firm provides a wide spectrum of services in this field, from conducting searches in ships files kept with the Department of Merchant Shipping to ship registration under the Cyprus flag. We advise owners, managers, charterers, freight forwarders and their respective insurers and help to resolve commercial and legal problems in Cyprus and abroad.
Reasons and advantages for a ship-owner or a ship manager in using Cyprus as a base: · A well organized shipping community with most of the related services available on the island.
· A first class telecommunications system with direct connections to approximately 200 countries.Connection with ships at sea is on a 24 hours basis.
· Frequent air connections through the two airports of Cyprus in Larnaca and Paphos which handle about 400 scheduled air flights each week, operated by 33 scheduled international airlines from Europe and the Middle East.
· Excellent banking services with very strong correspondent networks. Most of the banks in Cyprus subscribe to SWIFT, Reuters, Monitor, Telerate and other services.
· Cyprus Shipping Council. The establishment of the Council has helped the industry in the improvement of the services available to shipowners and managers and furthered the recognition of Cyprus as a truly international maritime centre.
· Shipmanagement companies. Perhaps the biggest strength of the Cyprus shipping industry is the existence of well established shipmanagement companies offering top services to shipowners throughout the world.
Taxation
Shipowners, managers and their expatriate employees can take advantage of the taxation incentives that are offered not only by the domestic legislation, but also through the wide and increasing network of Double Tax Treaties of Cyprus. These are: Shipowners
· Exemption from any Cyprus income tax on :
a. The income of a shipowner of a Cyprus ship from the operation of such ship in any shipping enterprise between Cyprus and ports abroad or between foreign ports (the operation of ship includes the chartering of a ship).
b. Dividends that are paid directly or indirectly from profits of ships.
c. Profits or other benefits received from rendering of services on board Cyprus ships by the captain, officers and members of the crew.
· No withholding taxes on dividends paid by shipowning companies.
· No capital gains tax on the sale of the ship or on the sale or transfer of the shares of a shipowning company.
· Reductions on tonnage taxes where the ship is managed by a Cyprus shipmanagement company.
· Exemption from estate duty (death taxes) of the shares of the shipowing companies. Shipmanagers
· Income tax is paid at either the rate of 4, 25% on the profit of shipmanagement companies or as a tonnage tax according to the relevant legislation, at the option of the shipmanager.
· No withholding taxes on dividends paid by shipmanagement or their related companies.
· No capital gains tax on the sale of shares of these companies.
· Exemption from estate duty (death taxes) on the shares of these companies. Crew earnings
The earnings of the crew of Cyprus ships are exempt from Cyprus income tax or social security payments. In addition, because of the Double Taxation Treaties of Cyprus or because of domestic legislation in their countries, foreign crew may enjoy up to total freedom from taxation in the countries of their nationality or residence.
How to register a ship
Categories of registration
Application for the registration of a ship is made to the Ministry of Communications, through the Department of Merchant Shipping. In order to qualify the applicant must be a Cypriot legal entity, consequently it is usual for a Cypriot registered limited liability company to be formed.
The procedure for registering a shipping company is straightforward and can usually be completed within two weeks through our office.
A minimum of one shareholder and a paid-up share capital of CYP 1,000 is required. There are exceptions for parallel registration.
Once it is established that the majority of the shares in the ship are held by a Cypriot legal entity, the registration of the ship can go ahead.
There are three categories of registration available: provisional registration, permanent registration, and parallel registration. A ship may be provisionally registered with the Cyprus Registry by any Cyprus Consul abroad without the need for the ship to be physically present. Because of this, almost all ships are provisionally registered to begin with.
Provisional Registration is valid for six months, after which time the ship must be permanently registered, though it is possible to extend the provisional registration for a further three months if necessary. Parallel registration
Ships under a foreign flag which are bareboat chartered to Cyprus shipowning companies may be parallel registered into the Cyprus Registry for the period of the charter. At the same time, Cyprus ships may be parallel registered into a foreign registry.
The advantages of the parallel registration into the Cyprus Registry are:
· No Cyprus income tax on the profits of the ship.
· Lower running costs as a result of flying the Cyprus flag. Ship mortgages The Cyprus law relating to ship mortgages is, with certain exceptions, similar to the English law, as such it affords full protection to the mortgagees and has become one of the deciding factors in attracting ships from all over the world and also from Eastern European countries including the Federation of Russian Republic. Fees & taxes payable by Cyprus ships Fees and taxes payable by Cyprus ships compare very favorably with those payable under other well known international flags; in many instances they are well below those demanded under the Liberian or Panamanian flags. In accordance with recent legislation there are reductions on the annual tonnage taxes payable on ships whose management is by a Cyprus Shipmanagement company.
|
