Cyprus: Cyprus Ship Registry

Cyprus administers a major international registry within the European Union and controls one of the world's largest merchant fleets. This presently comprises 1,084 ocean going ships of total gross tonnage 21,283,373.¹

The Cypriot registry is governed by the Merchant Shipping Laws, 1963-2004 (Registration of Ships, Sales, and Mortgages); the Merchant Shipping Laws, 1992-2004 (Fees and Taxes); and the Merchant Shipping Laws, 1963-2002 (Masters and Seamen).

A) More than half of the shares of the ship must be owned by Cypriot citizens or by citizens of Member States of the EU or the European Economic Area who in the instance of not being permanent residents of the Republic will have appointed an authorised representative in the Republic of Cyprus, or

B) The total (100%) of the shares of the ship must be owned by corporations established and having their registered office in the Republic of Cyprus, or in Member States of the EU having their registered office in the EU or the European Economic Area, or by corporations registered outside Cyprus but controlled by Cypriot citizens or citizens of Member State and in both the latter cases they must have either appointed an authorised representative in Cyprus or the management of the ship must be entrusted in full to a Cypriot or a Community shipmanagement company in Cyprus.

Applications for registration of ships must be made through local lawyers.

At the time of its registration, the ship must be surveyed by an approved classification society.

4.1 Provisional registration of a ship may be effected at any place abroad where Cyprus has a Diplomatic Mission or an Honorary consulate. The provisional registration may remain in force for six months. Thereafter, it may be renewed once, for a further three months.

The Registrar of Cyprus ships may send written instructions by telex or fax to any Embassy or Consulate of the Republic of Cyprus named by the applicant, to proceed with the provisional registration of the vessel.

4.2 Permanent registration of a provisionally registered vessel must be effected within 9 months from the date on which she was provisionally registered.

4.3 Parallel (Bareboat) Registration: The Cyprus legislation provides for the two forms or bareboat registration internationally accepted e.g. the "Parallel-in" registration and the "Parallel-out" registration of vessels, provided certain prerequisites are fulfilled.

The Parallel-in registration offers the possibility to a foreign flag vessel on bareboat charter to a Cyprus Shipping company to be registered in parallel under the Cyprus flag for a period, usually of 2 years.

The Parallel-out registration offers the possibility to owners of Cyprus ships to bareboat charter them to a foreign person or company and to effect a "Parallel" registration in a foreign register for the duration of the charter party.

All documents should be duly signed and certified.

• Memorandum and Articles of Association of the Company*

• Certificates of Incorporation, Directors and Secretary, Shareholders and Registered Office the Company*

• Resolutions of the Directors of the Company for the purchase of the vessel and its registration in the Cyprus Registry

• Power of attorney authorising the person who will sign all the necessary documents on behalf and on account of the Company*

• Bill of Sale/ Builder’s Certificate

• Certificate of Deletion of the vessel from the previous register

• Continuous Synopsis Record (C.S.R.)** (Only forms submitted with initial application)

• Declaration of ownership (M.S.3 or M.S.2)

• Appointment of Authorised Representative ***

• Memorandum as to Registration of Managing Owner /Ship’s Husband (M.S.10)

• Form M.S.34 (Application for Licence to install wireless telegraphy) and copy of Shore Based Maintenance Agreement

• Form with particulars of ship and shipowner in case of emergency (M.S.45)**

• ISM forms (Circular 13/2002) where this is required**

• In the case of Parallel Registration in a Foreign Register, a Certificate of Parallel Registration from the foreign registry.

• (i) Declaration of Conformity (ii) EC Type Examination Certificate from a Notifying Body (iii) Owner’s Manual-in the case of pleasure craft under 24 metres.

• Certificate of Survey (form MS.1) and Tonnage Certificate (form M.S.12 or M.S.12A or M.S.12B depending on the type of vessel) from a recognized Classification Society.

• Ship’s Carving and Marking Note (M.S.32)

• The following International Certificates from a recognized Classification Society

• International Load Lines Certificate

• Cargo Ship Safety Equipment Certificate

• Cargo Ship Safety Construction Certificate

• Cargo Ship Safety Radio Certificate

• International Oil Pollution Prevention Certificate

• International Safety Security Certificate

• Confirmation of Radio Traffic Accounting Authority

• Safety Management Certificate (SMC) where this is required

• Confirmation of the Customs Department on the payment of V.A.T. in the case of yachts which are outside the E.U..

* In the case of an individual, ie. a Cypriot national, this is replaced with the Cypriot Passport

** Do not apply to small vessels (yachts)

*** In the case of a corporation established in the European Union or the European Economic Area

Crew members may be of any nationality provided they are holders of certificates of competency issued by one of the countries, whose certificate of competency Cyprus has recognised. Officers have to apply for endorsement of their certificates of competency in accordance with the STCW 1978 Convention as amended.

Vessels of any size and type having an age not exceeding 15 years, except fishing vessels, may be registered in the Cyprus Register of ships as long as they comply with the provisions contained in the Merchant Shipping legislation and the circulars of the Department of Merchant Shipping.

For vessels exceeding 15 years of age the conditions listed below apply:

For the conditions that apply to fishing vessels, fish factory vessels, auxiliary vessels and pleasure craft please contact the Department of Merchant Shipping.

Cyprus is a member of the IMO and the ILO, and has ratified or adopted the following maritime conventions:

• SOLAS Convention 1974, 1978 and 1988 Protocols as amended

• Load Lines Convention 1966, 1988 Protocol

• Tonnage Convention 1969

• ColRegs Convention 1972 as amended

• Safe Containers (CSC) Convention 1972

• STCW Convention 1978 and 1995 amendments

• Search and Rescue Convention 1979

• Special Trade Passenger Ships Agreement 1971, 1973 Protocol

• INMARSAT Convention 1976, 1994 and 1998 amendments

• MARPOL 1973/78, Annex I/II, Annex V

• London Dumping Convention 1972

• Civil Liability Convention (CLC) 1969 (denounced), 1976, 1992 Protocols

• FUND Convention 1971 (denounced), 1976, 1992 Protocols

• Suppression of Unlawful Acts (SUA) Convention 1988, 1988 Protocol

• Space Requirements for Special Trade Passenger Ships, 1973 (SPACE STP 1973)

• Convention Concerning the Repatriation of Seamen, 1926 (Convention No. 23)

• Convention Concerning Crew Accommodation on Board Ships, Revised 1949 (Convention No. 92)

• Convention Concerning Minimum Standards in Merchant Ships, 1976 (Convention No. 147).

ABS, BV, CBS, CCS, DNV, GL, HRS, KRS, LRS, NKK, RINA, MRS,

A mortgage once created must be deposited with the Registrar of Cyprus Ships or with a consular officer on the instructions of the Registrar. Whether deposited with the Registrar or with a consular officer, the mortgage is recorded thereafter in the Register as from the date and hour of its deposit and remains an encumbrance on the vessel until discharged by the mortgagees. A mortgage may be created independently of whether the ship is provisionally or permanently registered.

If the ship on which a mortgage was created belongs to a Cypriot company, the mortgage will also have to be registered with the Registrar of Companies within a maximum period of 42 days after its creation. The mortgagee’s security is protected in the case of liquidation of the shipowning company.

- The minimum fee is CH£125
- The maximum fee is CY£3,000

No other fees and taxes are levied for the permanent registration of a vessel if the relevant registration fees have been paid at the time of the provisional registration of the vessel and the period of provisional registration has not expired.

The fees for the parallel registration of a ship are 20 percent higher than those applicable to the provisional or permanent registration of a vessel.

For registration or transfer of a mortgage with the registrar of ships the fees payable are as follows:

2 cents per gross ton up-to 10,000 tons
1 cent per gross ton for each additional ton

The minimum fee is CY£ 30.
No fee is payable for the discharge of mortgages.

5. Fees for the transfer and deletion of ships For the transfer of a ship to the ownership of another Cypriot Company the fees payable are as follows:

2 cents per gross ton up-to 10,000 tons
1 cent per gross ton for each additional ton
The minimum fee is CY£ 30.

No fee is payable for deletion of ships.

The Radio station installation licence fee is paid at the provisional registration of the ship and is CY£10.

The radio licence renewal fee is CY£10 per year.

The annual tonnage tax is calculated as follows:

A fixed amount of CY£100 plus:

The resulting figure from the above calculation is then multiplied by the corresponding rate shown below:

For passenger ships the annual tonnage tax is double the amount resulting from the above calculations.

There is a 30% discount on the tonnage tax when the vessel’s crew and technical management is carried out by a Cypriot or Community Shipmanagement Company, which has an office in the Republic of Cyprus stuffed with sufficient in number and qualifications personnel.

If a ship is laid up for a period of more than three consecutive months in any one year only 25% of her tonnage tax is payable for that period.

Vessels, which are less than 10 years old, enjoy a 30% discount on tonnage tax.

1. Shipmanagement companies have the option, subject to the satisfaction of some requirements, to be taxed either according to the corporate rate of 4.25% or to a special tax, which is levied on the basis of the tonnage of ships, for which shipmanagement services have been rendered.
2. Other tax benefits are:

• No tax on profits from the operation 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.

• Double tax treaties with 34 countries.

• No estate duty on the inheritance of shares in a shipowning company.

• No stamp duty on ship mortgage deeds or other security documents.

Cyprus has the third largest fleet within the European Union with a percentage of 16% of the total fleet of the 25 EU member states.

Footnotes