07 Nov, 2013

Shipping

Categories: Uncategorized

Shipping is the process of transporting an item, by sea or other means. Shipping is a very basic, common way of getting an item from one place to another, or from one person to another.

Cyprus is an internationally well-known shipping centre, home to some of the world’s leading names of the global shipping industry. Cyprus entry to the European Union, in 2004, further improved the reputation and overall image of the Cyprus flag and the infrastructure of Cyprus’ shipping in general.

Cyprus has an excellent geographical position at the crossroads of three continents (Europe, Africa, and Middle East), an advanced infrastructure and services, as well as a very competitive shipping taxation and other strategic advantages, which makes Cyprus the perfect place for ship owing, ship management, ship chartering and ancillary shipping-related services.

Some Facts about Cyprus’ shipping sector:

More than 140 ship owning, ship management and shipping related companies controlling a merchant fleet of 2,200 vessels, with 50 million Gross Tonnage.

  • 10th largest merchant fleet in the world;
  • 3rd largest merchant fleet in the EU;
  • 2nd largest Ship Management Centre in the world;
  • Largest third party Ship Management Centre in the EU.

Cyprus has the only EU-approved “Open Registry” Regime with a very wide and legally endorsed Tonnage Tax System (TTS), which was introduced with the Merchant Shipping Law in 2010 and covers the three main “maritime transport” activities: ship owning, ship management (crew and technical management), and chartering.

In summary, advantages of the Cyprus TTS include:

  • No tax on shipping activities other than Tonnage Tax;
  • No tax on shipping profits including profits from the sale of ships;
  • No tax on dividends paid from shipping profits;
  • No estate duty or capital gains tax;
  • No income tax for seafarers on Cyprus-flagged ships;
  • No stamp duties on documents or mortgage deeds.

In addition to tax incentives and the country’s unique geographical position, Cyprus maintains its competitive advantages through a high quality maritime cluster, by offering efficient and quality services. Moreover, Cyprus has the following advantages:

  • Competitive ship registration fees.
  • Recognition of Competence Certificates from many countries.
  • Bilateral agreements of cooperation in merchant shipping with 23 countries.
  • Classification of the Cyprus flag on the “White List” of the Paris and Tokyo MoUs.
  • Beneficial owners’ protection through nominee or trustee shareholders.

Cyprus has adopted a maritime safety policy, which focuses on the effective control of ships and the improvement of the quality of the country’s merchant fleet. Cyprus Maritime Offices are located in Limassol (Cyprus), as well as Hamburg (Germany), New York (USA), London (UK), Athens (Greece), Rotterdam (Netherlands) and Brussels.

Shipping Tonnage Tax System

The European Union´s approval of a fully revised and upgraded Cyprus Shipping Taxation System in 2010 is a turning point for Cyprus and European Shipping. The new Shipping Taxation System covers the three basic Shipping activities in International Shipping, namely Ship owning, Ship management (including Crew Management) and the Chartering of vessels. The benefits of the new system may soon make Cyprus, the “Shipping Metropolis” of Europe. Ship owners are exempted from Income Tax and are automatically taxed under the Tonnage Tax System. Ship managers and Charterers can exercise their option to be taxed under the Tonnage Tax System.

Some of the world’s largest international ship management companies have headquarters in Cyprus, including:

  • Bernhard Schulte
  • Columbia Shipmanagement Ltd
  • Dartmonth Shipping Limited
  • Hanseatic Shipping Company Ltd
  • Ocean Challenge
  • OceanWide
  • Schoeller Holdings Ltd
  • Synergy

In sum, the advantages of Cyprus in the shipping sector are the following:

  • Unique geographical location at the crossroads of Europe, Africa and the Middle Eas.
  • “Open Registry”, allowing non-Cypriot citizens to register ships under the Cypriot flag.
  • Advanced maritime infrastructure (two deep sea multipurpose ports in Limassol and Larnaca).
  • Sound international relations.
  • Favourable taxation regime and other benefits for shipowners and crew members.
  • Low ship registration fees.
  • No income tax, estate duty or capital gains tax for Cyprus-registered ships.
  • No stamp duty on documents or mortgage deeds.
  • Anonymity of beneficial owners through nominee or trustee shareholders.
  • Recognition of Competence Certificates from many countries.
  • Easy deletion from the Cyprus Shipping Register.

Sources: investcyprus

For more information and/or advice, please contact us via email at info@finexpertiza.cy