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 10
th largest merchant fleet in the world and the 3
rd 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:
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No tax on income from shipping activity by an owner for a Cyprus ship
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Competitive ship registration costs and annual tonnage taxes
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No tax or withholding tax on dividends from profits arising out of the operation of a Cyprus ship
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No capital gains tax on the sale of the ship or shares of the ship owning company
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The legislation allows non EU/EEA vessels to enter TT regime if the fleet is composed of 60% or more EU/EEA vessels
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No estate duty on inheritance of shares of the ship owning company
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No stamp duty on ship mortgage deeds or security documents, whilst affording full protection to mortgagees
Advantages that Cyprus legislation offers to ship charterers include:
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Tax rate of 25% of the tonnage tax rates or 4.25% corporate tax, if the composition requirement is met (60% EU/EEA vessels)
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TT reduced to 10% if all vessels of the characters carry EU/EEA flags or are managed in the EU/EEA
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No tax on profits from the use of qualifying vessels
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No tax on dividends paid out at all levels
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No tax on interest6 income from qualifying activities
Advantages that Cyprus legislation offers to ship management companies include:
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Tax rates equivalent to 25% of the tonnage tax rates or 4.25% corporate tax
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No withholding tax dividends paid by ship management companies
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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
info@internetincorporate.com
More information:
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.