Maritime Cyprus

IT has been said that there are more ships managed from Limassol than from any other place in the world. In fact, the members of the Cyprus Shipping Council, most of whom are based in Limassol, manage as many as 1,300 vessels with a total of 21 million gross tons. So why do all these shipowners and shipmanagers flock to Cyprus?

Perhaps the first reason is the favourable fiscal regime. For example, for shipowners there is no income tax, only a tonnage tax. If the owner has a ship registered in Cyprus and fully manages that ship from the island, there is also a substantial discount on the tonnage tax payable.

For shipmanagers, there have been some very recent changes. They now also pay a tonnage tax, and there is no further tax liability on the profits they make. In addition, there are incentives given to the foreign employees of shipping companies, such as income tax at half the normal Cypriot rate, and the facility to buy certain items, such as cars, at duty-free prices. These incentives help attract the right calibre of professional maritime people from outside Cyprus, needed to run high-quality shipping companies.

But tax advantages alone do not create a thriving maritime centre. There is also the local infrastructure. Cyprus offers highly competent lawyers and auditors, all operating under an administration system based on English law. The Cypriot workforce is well-educated, allowing shipping companies to employ high-quality local personnel to help run their operations. There is a good choice of office accommodation available, and then there is the expertise readily available to manage the latest technology and communications systems, which are so important to the efficient running of complex international operations.

The local telephone authority also offers an efficient and reliable network, including the provision of ISDN lines and a GSM mobile telephone network which has service agreements with most European countries and many others around the world. The geographic location of Cyprus also helps greatly with communications. The time zone is such that it enables communication with the Far East and Australia first thing in the morning, and the west coasts of North and South America at the end of the day. Travelling is also easy from Cyprus, with excellent connections and daily flights to many destinations in Europe and the Middle East, along with onward flights to any other part of the world.

All in all, the infrastructure of Cyprus can offer firm foundations to any shipping company wanting to do business here. This has led to Cyprus being regarded as one of the world's leading shipping centres, and some of the biggest names in shipping setting up offices on the island, creating a close-knit maritime community.

Co-operation between various shipping companies is very close, being much enhanced by the local shipping organisation, the Cyprus Shipping Council. The council organises a number of committees and working groups to deal with issues currently affecting the industry. These committees and working groups allow persons from different companies to exchange views and share problems, and it has also been internationally recognised that there is a tremendous pool of expertise resident on Cyprus.

Members of the Cyprus shipping community are often found on the committees and boards of organisations such as the International Chamber of Shipping, International Shipping Federation, the Baltic and International Maritime Council, the International Group of P&I Clubs and the International Association of Classification Societies. In addition, there are active branches of both the Nautical Institute and the Institute of Marine Engineers in Limassol.

There is also co-operation between the commercial shipping organisations based in Cyprus and the government department responsible for maritime matters. They work together on many issues, including amending and adding to the local shipping legislation enhancing the quality of ships flying the Cyprus flag and improving the reputation of those operating from Cyprus, as well as the country itself.

It is predicted that Cyprus will continue to grow as a maritime centre. Many of the early problems encountered by the flag state administration in controlling its fleet have now been addressed, and a gradual improvement in port state control statistics is being seen. This will certainly help with the application of Cyprus to be in the next wave of countries to join the European Union.

In September 2001 the biennial conference, Maritime Cyprus, will take place. This year, it is expected to be attended by more than 1,000 delegates. The programme helps draw them in, of course, but it is not without significance that Cyprus offers a very agreeable climate, friendly people, a high quality of life, and good food and wine at reasonable prices.