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Cyprus Shipping Advantages

A Sovereign Flag - An International Maritime Centre

 

·  Member of the European Union

·  Democratic country with a free market economy.

·  Strategic location at the crossroads of three continents.

·  Modern and efficient legal, accounting and banking services based on English practices.

·  Liberal Foreign Direct Investment regime allowing up to 100% foreign participation in most sectors of the economy.

·  No exchange control and freedom of movement of foreign currency.

·  Double Tax Treaties with 43 countries.

·  No tax on profits from the operation or management of a Cypriot registered vessel or on dividends received from a shipowning company.

·  No capital gains tax on the sale or transfer of a Cypriot registered vessel or the shares of a shipowning company.

·  No estate duty on the inheritance of shares in a shipowning company.

·  No income tax on the emoluments of officers and crew.

·  No stamp duty on ship mortgage deeds or other security documents.

·  Signatory to numerous international maritime conventions.

·  Bilateral agreements with 29 countries, through which Cyprus ships receive either national or favoured nation treatment in the ports of other countries.

·  Competitive ship registration costs and annual tonnage taxes.

·  Full protection for financiers and mortgagees.

·  Favourable tax regime for ship management.

·  Low set up and operating costs for companies.

·  Excellent telecommunications and easy access by air and sea.

·  Highly qualified managerial, clerical and technical staff available.

Cyprus’s location and tax advantages has led to its flag becoming one of the most popular in the world

 

Cyprus recognised, as early as 1963, the political, economic and social importance of shipping. Since then, successive governments implementing the correct policy, despite the political turmoil which has vexed Cyprus, managed to attract shipping entrepreneurs and to develop the island into a fully-fledged shipping centre combining both a sovereign flag and a resident shipping industry, which is renowned for its high quality services and standards of safety. The island΄s strategic location, which is at the crossroads of three continents (Europe, Asia, Africa) enabled Cyprus to play a prominent role in its success as an international shipping centre.

Cyprus, combines a legal system based on the English model, an efficient civil service, good labour relations, an outstandingly high level of professionalism in the legal and accounting sectors, an excellent banking system, telecommunications and airlinks to all important destinations, that form solid foundations for entrepreneurs to set up their business.

A number of fiscal and economic advantages are also available, such as the competitive ship registration costs and annual tonnage taxes, the favourable tax regime for shipmanagement and other international business enterprises, the availability of competent local employees and the generally low operation and construction costs, which prompted the establishment by many European entrepreneurs of local companies with fully fledged offices in the island.

The Cyprus registry today, ranking tenth among international fleets - with 1,857 ocean going vessels of a gross tonnage exceeding 21 million- is continuously upgrading its services in order to offer a high standard of support to international shipping and a reputation of a “Flag of Progress”.

Cyprus is a major shipmanagement centre worldwide with a total of around 60 shipmanagement companies operating in its territory. Several of these companies rank among the largest of their kind in the world. Cyprus appears to be among the top five countries and territories in the world with the largest number of third party shipmanagement companies on its territory.

Among the shipmanagement companies established and operating from the Republic of Cyprus, 87% are controlled by Cypriot and EU interests. Such companies employ almost 40.000 seafarers out of whom 5.000 are EU nationals.The share occupied by the fleet managed from Cyprus in the world shipmanagement market constitutes another interesting aspect. According to recent governmental estimates, the total fleet managed from Cyprus represents 20% of the world third–party shipmanagement market (out of 10.000 ships in the world shipmanagement market under a wide approach).

 

 


CYPRUS AND THE INTERNATIONAL MARITIME ORGANISATION



Cyprus has been a member of the International Maritime Organisation since 1978 and a member of its Council since 1987.

Cyprus has always been a keen supporter of the IMO as the principal international regulatory body on matters of maritime safety, security and the protection of the marine environment and remains a fervent supporter of its aims and objectives.

The supportive attitude of Cyprus towards the IMO, can be easily traced to the fact that the Government of the Republic of Cyprus maintains a permanent Mission at the IMO and has ratified almost all International Conventions developed by the Organisation on maritime safety and security the protection of the marine environment and legal matters.

In addition, Cyprus participates actively in all Committees and Subcommittees of the Organisation, either through its High Commission in London or through well organised expert Delegations from Cyprus, mainly from the Department of Merchant Shipping which is the competent Department of the Ministry of Communications and Works on matters pertaining to ship safety, security and prevention of pollution from ships.

In particular, Cyprus has been a fervent supporter of and a contributor to the development of the new strategy of the Organisation and played a leading role in the formulation of the 2002 amendments of the SOLAS΄74 (Safety of Life at Sea) Convention, for the incorporation of security issues, by chairing the drafting Committee of the Diplomatic Conference.

Cyprus΄ commitment to the work of the Organisation in general may also be traced to the fact that between the years 2001 and 2003, it was holding the chair of the subcommittee on Ship Design and Equipment and since 2003 to date it has been successively elected to the chair of the Marine Environment Protection Committee.

Although the IMO is at the moment dealing with a variety of issues, it may be highlighted that Cyprus is very supportive of the ongoing work on Goal Based Standards, the drafting of the new International Convention of ship recycling, the review of MARPOL Annex VI and the Voluntary Member States Audit and as far as the latter is concerned Cyprus has undergone the voluntary audit with great success in October 2006 .

Last but not least, Cyprus is very supportive of the educational Institutions of the IMO, namely the World Maritime University (WMU) in Malmoe, Sweden, the IMO-International Maritime Academy (IMA) in Trieste, Italy and the International Maritime Law Institute (IMLI), by having students participating whenever the need arises, in the case of the WMU, Cyprus participates with a member of the board of Governors and supports it financially.


DOUBLE TAX TREATIES

Cyprus has concluded a number of treaties whose main purpose is the avoidance of double taxation of income earned in any of the countries concerned.
The treaties also include articles on "non-discrimination", "mutual agreement procedures" and "exchange of information".

A list of the countries with which Cyprus has concluded double tax treaties shown in the following table:

State

Date of
Signature
Treaty/Protocol/
Note

Date of entry
into force

Date of Publication in the Official Gazette
of the Republic
(Number and date)

1

Austria

20 Mar 1990

10 Nov 1990

2500 27 Apr 1990

2

Bulgaria

30 Oct 2000

3 Jan 2001

3461 30 Dec 2000

3

Belarus

29 May 1998

12 Feb 1999

3273 9 Oct 1998

4

Belgium

14 May 1996

8 Dec1999

3365 19 Nov 1999

5

Canada

2 May 1984

3 Sep1985

2053 31 May 1985

6

China

25 Oct1990

5 Oct 1991

2578 22 Feb 1991

7

Denmark
Treaty Notes

26 May 1981

10 Aug 1981
10 Apr 1982

1704 17 Jul 1981
2034 24 Sep 1982

8

Egypt

18 Dec1993

14 Mar1995

2865 11 Mar 1994

9

France

18 Dec1981

1 April 1983

1468 9 Jul 1982

10

Germany

9 May 1974

11 Oct 1977

1199 27 Jun 1975

11

Greece

30 Mar1968

16 Jan 1969

651 10 May 1968

12

Hungary

30 Nov1981

24 Nov 1982

862 7 May 1982

13

India

13 Jun 1994

21 Dec 1994

2921 4 Nov 1994

14

Ireland

24 Sep1968

12 Jul1970

726 19 May 1969

15

Italy
Treaty Protocol

24 April 1974
7 Oct 1980

9 June 1983

1586 5 Sep 1980
4 Jun 1982

16

Kuwait

15 Dec 1984

25 Sep 1986

2026 18 Jan 1985

17

Lebanon

18 Feb 2003

14 Apr 2005

3976 8 Apr 2005

18

Malta

22 Oct 1993

11 Aug 1994

2860 25 Feb 1994

19

Mauritius

21 Jan 2000

12 Jun 2000

3410 2 Jun 2000

20

Norway

2 May 1951

1 Jan 1955

11 Jun 1956

21

Poland

4 Jun 1992

9 Jul 1993

2735 4 Sep1992

22

Romania

16 Nov 1981

8 Nov 1982

1757 26 Feb 1982

23

Russia

5 Dec1998

17 Aug 1999

3306 26 Feb 1999

24

South Africa

26 Nov 1997

8 Dec1998

3214 16 Jan 1998

25

Sweden

22 Oct 1988

14 Nov1989

2377 20 Jan 1989

26

Syria

15 Mar 1992

22 Feb 1995

2863 4 Mar 1994

27

Singapore

24 Nov 2000

8 Feb 2001

3641 30 Dec 2000

28

Thailand

27 Oct 1998

4 April 2000

3394 17 Mar 2000

29

United Kingdom
Treaty Protocol

20 Jun1974
2 Apr 1980

1 Nov1974

1107 5 Jul 1974

30

USA

19 Mar 1984

31 Dec 1985

1944 4 April 1984

31

Serbia and Montenegro*

29 Jun1985

8 Sep1986

2073 23 Aug1985

32

Slovenia*

29 Jun1985

8 Sep 1986

2073 23 Aug1985

33

Slovakia**

15 April 1980

30 Dec 1980

1599 3 May1980

34

Chech Republic**

15 April1980

30 Dec 1980

1599 3 May1980

35

Ajerbaizan***

29 Oct 1982

26 Aug 1983

26 Nov 1982

36

Armenia***

29 Oct 1982

26 Aug 1983

26 Nov 1982

37

Kyrgyzstan***

29 Oct 1982

26 Aug. 1983

26 Nov 1982

38

Moldavia***

29 Oct 1982

26 Aug. 1983

26 Nov 1982

39

Tanzikistan***

29 Oct 1982

26 Aug. 1983

26 Nov 1982

40

Uzbekistan***

29 Oct 1982

26 Aug. 1983

26 Nov 1982

41

Ukraine***

29 Oct 1982

26 Aug. 1983

26 Nov 1982

42

Seychelles

28 Jun 2006

27 Oct 2006

25 Oct 2006

43

San Marino

27 Apr 2007

18 Jul 2007

4088 13 Jul 2007


Notes
* The treaty between the Republic of Cyprus and the Socialist Federal Republic of Yugoslavia is still in force.
** The treaty between the Republic of Cyprus and the Czechoslovak Socialist Republic is still in force.
***The treaty between the Republic of Cyprus and the Union of Soviet Socialist Republics is still in force.




MERCHANT SHIPPING AGREEMENTS



The aim of these agreements is to promote friendly relations between Cyprus and other countries, explore areas of cooperation related to shipping which could benefit the economic development of both countries, and facilitate seaborne trade and employment of seamen.

These agreements contain provisions for the employment on Cyprus ships of properly qualified seamen from these countries. The terms of employment of these seamen are those approved by the competent authorities and / or seamen’s unions of their country and any disputes regarding these, may be resolved exclusively by the competent courts or Authorities of either Cyprus or their country.

Cyprus signed a number of bilateral Agreements on Merchant Shipping with a number of countries. These are listed below:

  • Algeria
  • Bulgaria
  • China
  • Cuba
  • Egypt
  • India
  • Iran
  • Latvia
  • Lithuania
  • Malta
  • Philippines
  • Poland
  • Romania
  • Russia
  • Sri Lanka
  • Syria


Agreements with Belgium/Luxembourg, Greece, Italy, Pakistan, Antigua & Barbuda and South Korea have been signed and will enter into force soon.

Agreements with Estonia, Germany, Hungary, Libya, Slovenia, Lebanon, Thailand and South Africa have been initialled and their signature is pending.
 
The above information was obtained from the Department of Merchant Shipping of Cyprus.

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