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:

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.