In light of the latest developments in the Greek economy and the strong maritime tradition of Cyprus, we put the spotlight on Cyprus as a maritime centre.
Cyprus is one of the most appealing maritime centers and is the only EU country with an EU approved tonnage tax (TT) system which fully complies with EU and OECD requirements against harmful tax practices. According to the Cyprus Shipping Chamber, Cyprus has the 10th
largest merchant fleet in the world and the 3rd
in the European Union with approximately 1000 ocean-going vessels of a gross tonnage exceeding 19 million. Additionally, around four per cent of the world’s fleet I managed from Cyprus and 87 per cent of the companies are controlled by EU interests.
According to Maritime Cyprus
, Limassol is considered as the largest third party ship management centre in the EU with more than 130 ship management and shipping companies maintaining offices and conducting international activities from Cyprus. Below, we present to you the advantages of using Cyprus as a maritime centre.
Advantages that Cyprus legislation offers for ship owning companies include:
Advantages that Cyprus legislation offers to ship charterers include:
No tax on income from shipping activity by an owner for a Cyprus ship
Competitive ship registration costs and annual tonnage taxes
No tax or withholding tax on dividends from profits arising out of the operation of a Cyprus ship
No capital gains tax on the sale of the ship or shares of the ship owning company
The legislation allows non EU/EEA vessels to enter TT regime if the fleet is composed of 60% or more EU/EEA vessels
No estate duty on inheritance of shares of the ship owning company
No stamp duty on ship mortgage deeds or security documents, whilst affording full protection to mortgagees
Advantages that Cyprus legislation offers to ship management companies include:
Tax rate of 25% of the tonnage tax rates or 4.25% corporate tax, if the composition requirement is met (60% EU/EEA vessels)
TT reduced to 10% if all vessels of the characters carry EU/EEA flags or are managed in the EU/EEA
No tax on profits from the use of qualifying vessels
No tax on dividends paid out at all levels
No tax on interest6 income from qualifying activities
Tax rates equivalent to 25% of the tonnage tax rates or 4.25% corporate tax
No withholding tax dividends paid by ship management companies
Crew earnings are exempt from Cyprus income tax or social security contributions
Cyprus’ unique benefits extend further than its tradition and sound infrastructure. Using Cyprus gives access to very low TT, competitive registration costs, beneficial owners protection, access to EU directives, recognition of competence certificates from many countries and exemption from controlled foreign corporations (CFC)/thin capitalization legislations. In essence, Cyprus offers tax exemption on profits and dividends from shipping operations.
We can assist you relocate your business base and we provide a “one stop shop” service which includes company formation, vessel registration, accounting, reporting, management, tax and legal etc. We would be pleased to discuss and tailor a solution for you. For more information please contact us at firstname.lastname@example.org
Do you want to establish a company in Cyprus? Our Cyprus company formation
page explains it all.
Interested in opening a bank account in Cyprus? Cyprus bank account opening
and Eurobank Cyprus online banking