The benefits of the Cyprus regime for shipping companies offer an unparalleled tax and regulatory framework for shipping companies. In combination with the number of other benefits of a Cyprus company, under Cyprus legislation there is a Tonnage Tax (TT) imposed as opposed to a corporate tax on profits. Specifically the option exists to pay TT at 25% of the rates applicable to ship owners and charterers, for all vessels under management or elect the 12,5% corporation tax on worldwide profits. The system applies to shipowners, charterers (bareboat, demise, time and voyage) and shipmanagers providing technical and/or crewing services where the qualifying criteria are met.
As for the value of the Cyprus flag in international waters there are a number of factors which will convince you to choose Cyprus, namely:
- Classification of Cyprus flag in the White List of the Paris and Tokyo MOUs and removal 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.
- 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 23 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
The above in combination with the benefits of an excellent infrastructure, well established legal framework, membership of the EU and a strategic location make Cyprus an ideal location for setting up your shipping company.