Advantages Of Registration – Significant Reasons Why To Use The Cyprus Flag

Economic benefits
  • No tax on profits from the operation or management of a Cyprus-registered vessel or on dividends received from a vessel owning company.
  • No income tax on the wages of officers and crew.
  • Low registration costs.
  • Favourable tonnage tax scheme based on ship net tonnage.
  • No stamp duty on ship mortgage deeds or other security documents.
  • Double tax treaties with 43 countries.
  • No exchange control and freedom of movement of foreign currency
  • Full protection for financiers and mortgagees.
  • Low set up and operating costs for companies.
  • U flag
  • Classification of Cyprus flag in the White List of the Paris and Tokyo MOUs and exclusion from the “List of Targeted Flag States” of the US Coast Guard resulting in fewer inspections of the ships and less delays at the ports of both MOUs and of the US.
  • Maritime offices in New York, London, Rotterdam, Piraeus, Brussels and Hamburg offering services to Cyprus ships.
  • A network of local inspectors of Cyprus ships, covering important ports worldwide in order to ensure efficient and effective control of Cypriot vessels and to avoid detentions by port state control.
  • Signatory to all international maritime conventions on safety and pollution prevention.
  • Bilateral agreements with 26 countries, through which Cypriot ships receive either national or favoured nation treatment in the ports of other countries. Those agreements with labour supplying countries provide for specific terms of employment which are beneficial to both the shipowners and the seafarers.
  • Efficient and qualitative provision of services by the Department of Merchant Shipping

OWNERSHIP REQUIREMENTS

  • More than half of the shares (50%) of the ship must be owned by Cypriot citizens or by citizens of Member States of the EU or of the European Economic Area who in the instance of not being permanent residents of the Republic will have to appoint an authorised representative in the Republic of Cyprus, or
  • The total (100%) of the shares of the ship must be owned by corporations, which operate in accordance with the laws of the Republic and have their registered office in the Republic of Cyprus, or they operate in accordance with the laws of any other EU or EEA Member State and have their registered office, central administration or principal place of business within the European Economic Area or by corporations registered outside the EU or the EEA but controlled by Cypriot citizens or citizens of a Member State. In both the latter cases they must have either appointed an authorised representative in Cyprus or the management of the ship must be entrusted in full to a Cypriot or Community shipmanagement company in Cyprus.
  • Applications for registration of ships must be made through law firms in Cyprus.
  • At the time of its registration, the ship must be surveyed by an approved classification society.

TYPES OF REGISTRATION

Provisional registration of a ship may remain in force for six months. Thereafter, it may be renewed once, for a further three months.

Permanent registration. The permanent registration of a provisionally registered vessel must be effected within 6 months (or 9 months if the 3 month extension has been obtained) from the date on which she was provisionally registered.

Parallel (Bareboat) Registration: The Cyprus legislation provides for the two forms or bareboat registration internationally accepted e.g. the “Parallel-in” registration and the “Parallel-out” registration of vessels, provided certain prerequisites are fulfilled.

The Parallel-in registration offers the possibility to a foreign flag vessel on bareboat charter to a Cyprus Shipping company to be registered in parallel under the Cyprus flag for a period, usually of 2 years.

The Parallel-out registration offers the possibility to owners of Cyprus ships to bareboat charter them to a foreign person or company and to effect a “Parallel” registration in a foreign register for the duration of the charter party.

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