Shipping companies in Cyprus benefit from the Republic under a legislation that has placed the country as an established and one of the major registries not only in Europe but also globally.
The Cyprus ship registry is one of the two “open” registries within the European Union and is estimated that holds the 15% of the total merchant fleet in the region. The country has an established maritime infrastructure which includes the Naval Chamber of Commerce. It has also the Department of Merchant shipping which operates under the Transportations Ministry and provides high value services to the maritime industry.
A significant percentage of vessels in Cyprus registry today is managed by specialized management companies well known and established due to their expertise in the field. The main force however behind the rapid expansion of the shipping industry in Cyprus for more than half a century is the tax law.
The legislation allows non community vessels to enter the tonnage tax regime provided the fleet is composed by at least 60% community vessels. If this requirement is not met, then non community vessels can still qualify if certain criteria are met.
The Cyprus Merchant Shipping Legislation, fully approved by the EU provides for exemption from all direct taxes and taxation under tonnage tax regime of qualifying ship owners, charterers and ship managers, from the operation of qualifying community ships (ships flying a flag of an EU member state or of a country in the European Economic Area) and foreign (non-community) ships (under conditions), in qualifying activities.
The legislation includes an “all or nothing” rule, meaning that if a ship-owners/ charterer/ ship manager of a group elects to be taxed under the tonnage tax regime, all ship owners/ charterers/ ship managers of the group should elect the same. Exemption is also given in relation to the salaries of officers and crew aboard a Cyprus ship.