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SHIPPING & MARITIME

Cyprus is a leading modern international shipping and maritime centre with a proven success story for decades – a number of its characteristics and accreditations include:

  • 1st ship management centre in Europe;
  • 3rd largest ship management centre in the world, managing more than 20% of the worlds’ third party managed fleet;
  • 3rd largest merchant fleet in Europe;
  • European Union (EU) Open Registry;
  • EU-approved Tonnage Tax System (TTS);
  • In the “White list” of Paris and Tokyo MoU’s for safety;
  • Prominent role in the International Maritime Organisation (IMO) and International Labour Organization (ILO) organisations and the EU;
  • Deputy Ministry of Shipping; and
  • Modern and effective maritime infrastructure.

Shipping in Cyprus started to evolve hundreds of years ago, with the island gaining a lot of expert knowledge in sailing and trading by its many different conquerors such as the Egyptians, the Greeks, the Romans, the French, the Venetians and the British.

Following its independence in 1960 Cyprus has been established as a strategic and significant international business centre, due to the considerable increase of commerce, trade, offshore activities and rapid expansion of the economy. Key factors that further contributed to the island’s success are its ideal, strategic geographical location, at the crossroads of the European, the Asian and the African continents, the reopening of the Suez Canal, the importance of the Arab oil in the global economy and the prosperous Middle Eastern financial region.

In 1963 Cyprus realised the political, economic and social importance of shipping and began to expand and diversify all possible avenues of shipping activity, build-up and perfect the shipping sector, attract shipping entrepreneurs, ultimately turning the island into the fully-fledged shipping and maritime centre that we all see today, home to some of the world’s leading names of the global shipping industry and renowned for its high-quality services and standards of safety.

The country’s excellent shipping infrastructure was developed over the years by the Maritime Administration (the Ministry of Communications and Works, the Department of Merchant Shipping, and the Ports Authority), the Government authority for shipping in Cyprus and the Cypriot Shipping Industry, which is represented by the Cyprus Shipping Chamber.

Cyprus has been a member of the IMO since 1978 and a member of IMO’s Council since 1987. Cyprus is an active participant in the IMO, the ILO and the European Maritime Safety Agency (EMSA).

Tonnage Tax System

For the first time for an EU Member State with an Open Registry, the new and simplified Tonnage Tax System (TTS) for Cyprus merchant shipping was approved by the European Commission on 24 March 2010, as per the requirements of the EU guidelines on State Aid to Maritime Transport. The fully revised and upgraded TTS covers the three basic shipping activities in International Shipping: Ship Owning, Ship Management (including Crew Management) and Chartering of Vessels.

As of 2010, with the introduction of the new TTS, Cyprus has most certainly gained a competitive advantage and is well on its way of becoming the Shipping Capital of Europe. In 2020 the EU has reapproved the TTS until 31 December 2029, thereby maintaining the island’s prominent position in Europe and the rest of the world.

Based on the TTS, owners of Cypriot and foreign ships, charterers and ship managers are subject to an annual tax referred to as tonnage tax calculated on the basis of the net tonnage of the qualifying ships they own, charter or manage.

Cyprus Tonnage Tax System benefits include:

  • No taxation of shipping activities, other than Tonnage Tax (TT);
  • No taxation of shipping profits or profits from the disposal of ships;
  • No tax on dividends paid from shipping profits;
  • No estate duty or capital gains tax;
  • No income tax for crew members on Cyprus-flagged ships;
  • Wide range of qualifying activities and wide range of qualifying vessels; and
  • No stamp duties on documents or mortgage deeds.
The Department of Merchant Shipping

The Department of Merchant Shipping (DMS) has been established in 1963 with its headquarters situated in Famagusta but, following the Turkish invasion in 1974, the coastal town of Limassol replaced Famagusta as the port of registration of Cyprus ships. The DMS was established and started functioning as a distinct entity in the Ministry of Transport, Communications and Works of the Republic of Cyprus in 1977.

The establishment of the DMS created a whole new chapter for the Cyprus Shipping sector and the department set out to establish a safe, sound and well-rounded infrastructure which would successfully facilitate not just ship registrations but also ship-management and other shipping related activities on the island. The Cypriot Registry has shown tremendous growth in the last two decades currently ranking among the top 10 on the list of leading maritime nations.

The DMS activities include registration of ships, administration and enforcement of the merchant shipping legislation, control of ships and enforcement of international conventions, investigation of marine casualties, resolving labour disputes on board Cypriot ships, and training and certification of seafarers.

The Cyprus Shipping Chamber

The Cyprus Shipping Chamber (CSC) was established in January 1989 and is the trade association of the Shipping Industry in Cyprus. The CSC currently comprises all the major ship-owning, ship-management, chartering and shipping related companies based in Cyprus. The CSC’s member companies collectively employ approximately 4,500 persons ashore and more than 55,000 seafarers from all over the world on-board their vessels.

The CSC’s purpose is to promote the interests of the Cypriot Shipping Industry and further the reputation of the Cyprus flag, whilst promoting and safeguarding of the legitimate interests of its professional member-companies, both nationally and internationally.

The CSC has evolved to become a very influential body, and major policy decisions concerning shipping matters are only taken after consulting with the CSC. One of its primary objectives is to help the Government of the Republic of Cyprus adapt new laws, policies and procedures to the needs of the Cyprus fleet and the resident Shipping Industry in order to remain highly competitive, meanwhile raising quality, improving safety and sustaining an environmentally conscious point of view.

LET’S WORK

TOGETHER.

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T: +357 22 021100
F: +357 22 757566
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[email protected]
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1 Kinyras Street, Kinyras Tower,
3rd Floor, 1102 Nicosia, Cyprus
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