Registration of shipping companies
Ship-owners who wish to register a vessel under Cyprus flag should register a Cyprus Shipping Company which will acquire the vessel in its name. The Company should be registered as private limited liability company under the provisions of the Cyprus Companies Law, Chapter 113 of the Laws of Cyprus, as amended.
Our team can assist you with the registration of the Shipping Company and advise you accordingly for the transfer of the vessel under its name in a Tax efficient manner.
Ship registrations and deletions
In accordance with the Cyprus Merchant Shipping Law a vessel shall be considered to be a Cyprus Ship, if more than one half of the shares are owned by Cypriot Tax residents or by a company established and operating under the laws of Cyprus and having its registered office in Cyprus.
If the conditions are met, then an application should be submitted in order to request permission to register the Ship in the Cyprus Registry.
The application should include the following documents/information:
(a) Name of the Company. (b) Names of directors and shareholders. (c) Present name and present flag of the ship. (d) Name under which the ship is proposed to be registered. (e) Particulars of ship, year of built etc. (f) Previous names of ship, stating changes if any. (g) The part where the ship shall be at the time of the registration. (h) The intended trading area of the ship. (i) The Cyprus consulate abroad where the registration will take place. (j) The classification society of the vessel.
Under the Cyprus Merchant Shipping Law, there is an option of provisional Registration of a vessel that is not in a Cyprus port at the time of registration if ti meets the requirements for registration under the Cyprus flag. The provisional registration applies for a period of six months with an option of renewal for another three months. Parallel registration is also possible subject to conditions.
Vessels may also apply for deregistration under the Merchant Shipping Law.
Our team can assist you with the preparation and submission of the application to the department of Merchant Shipping for the registration or provisional registration or deregistration of the vessel and act as a liaison with the Cyprus Register.
Tax planning
Ship-owning companies, ship-management companies and chartering companies can benefit from the favourable Cyprus shipping Tax regime.
Cypriot companies with qualified shipping activities can opted to be taxed under the new Tonnage Tax System (TTS) instead to be subject to Cyprus income Tax at the rate of 12.5%. The modern and competitive TTS is based on net tonnage of the vessels owned, managed, and chartered and is paid annually.
For qualified ship-owning companies under the TTS the Tax is calculated based on the net tonnage of ships owned by these companies and only applies for an owner of a “qualified ship” that engages in a “qualified shipping activity”.
We set out below a summary of applicable rates for tonnage Tax (TT) calculations for a vessel:
| Net Tonnage (NT) Tax rates | ||||
|---|---|---|---|---|
| 0 - 1.000 | 1.001 - 10.000 | 10.001 - 25.000 | 25.001 - 40.000 | > 40.000 |
| €36.50 per 100 NT | €31.03 per 100 NT | €20.08 per 100 NT | €12.78 per 100 NT | €7.30 per 100 NT |
For qualified Ship Management Companies there is also an option to be taxed under the TTS at a rate equal to 25 per cent of the rates used to calculate the TT imposed on Cyprus registered ships instead to be subject under Cyprus income Tax at the rate of 12.5%. It should be noted that a ship management company which opts to be taxed under the TTS must remain in the system for at least 10 years.
A summary table of the applicable rates for TT calculations for a Ship Management Company is set out below:
| NT Tax rates | ||||
|---|---|---|---|---|
| 0 - 1.000 | 1.001 - 10.000 | 10.001 - 25.000 | 25.001 - 40.000 | > 40.000 |
| €36.50 per 400 NT | €31.03 per 400 NT | €20.08 per 400 NT | €12.78 per 400 NT | €7.30 per 400 NT |
Our team can assist you with the calculation of the TT liability and advice you accordingly of how you may Tax optimise your operations.
Business advisory services
For Companies with shipping activities, we can provide tailor made solutions for your business needs, and guide you through the implementation of your business plan.
Our team can provide among others the following services:
- Corporate finance.
- Valuations.
- Merger and acquisitions.
- Restructuring.
Full compliance services
Our experience team in the shipping industry can handle your compliance obligations including the following:
- Maintenance of registered office in Cyprus.
- Payroll and accounting services.
- Repatriation service for expatriates.
- Provident fund services.
- Communication with the Department of Merchant Shipping .
- Compliance and regulatory services.