The major advantages of registering a vessel in Cyprus are the following:
- EU flag
- There is no tax on profits from the operation or management of a Cyprus-registered vessel or on dividends received from a vessel owning company
- No capital gains tax on the sale or transfer of a Cyprus-registered vessel or the shares of a vessel owning company
- No income tax on the wages of officers and crew
- Low registration costs
- Favourable tonnage tax scheme based on ship gross tonnage
- No stamp duty on ship mortgage deeds or other security documents
- Low set up and operating costs for companies.
A vessel may be registered in the Register of Cyprus Ships based on the following conditions:
- More than 50% of the shares of the ship are owned by Cypriot citizens or by citizens of other EU Member States (State of the European Union or other contracting party to the European Economic Area Agreement) without a permanent residence of Cyprus with an authorised representative in the Republic of Cyprus.
- All non-European owners who wish to register their ships under the Cyprus flag may incorporate a company in Cyprus, which will own the ship in its name, or bareboat charter the ship.
The three main types of vessel registration in Cyprus are:
Provisional registration (up to 9 months)
A ship may be provisionally registered under the Cyprus flag either in Limassol, by the Registrar of Cyprus Ships or at any diplomatic mission or consular post of the Republic of Cyprus abroad who will act on instructions issued by the Registrar of Cyprus Ships.
The permanent registration of a provisionally registered vessel must be effected within 6 months (or 9 months if the 3 month extension has been obtained) from the date on which she was provisionally registered.
Under Cypriot legislation parallel (bareboat) registration of vessels is possible. The legislation provides for the two forms of internationally accepted bareboat registration: ‘Parallel-in’ registration and ‘Parallel-out’ registration.
The application for registration must be accompanied by documents attesting ownership and compliance with the various conditions which need to be fulfilled at the time of the provisional registration, the direct permanent registration or the parallel-in registration, as the case may be.