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Benefits for shipping companies in Cyprus – presented by our Cypriot company formation team
Cyprus is an ideal location to base a shipping company not only because of its geographical position but also because the country has a favourable legislation for these types of businesses.
The Merchant Shipping Legislation offers benefits for investors who want to open a company in Cyprus. The country has a very attractive tonnage taxation system. This means that shipping companies have a different taxation system: instead of being subject to the usual corporate tax on profits they are taxed according to the net tonnage of the vessels.
Setting up a Cypriot shipping company
A shipping company in Cyprus is incorporated as any other type of company, by observing the regulations regarding the minimum share capital and registration with the Trade Registry. Our Cypriot company formation experts can help you throughout the incorporation procedure.
Cyprus allows for tax exemption on all profits and dividends at a distribution level. According to law, ship-owners are allowed an exemption from all profits taxes and they are taxed according to the tonnage tax on the net tonnage of their vessels. These rates are between 36,50 and 7,30 according to a pre-set net tonnage unit.
Ships that do not qualify for this taxation system according to tonnage will need to pay corporate tax on profits. The tonnage tax system applies to ship-owners, charterers and ship managers.
Businessmen interested in investing in Cyprus in this sector, should know that any shipping company in the country will need to register its vessels. Provisional vessel registration or permanent registration is possible. Ship registration is made at the Department of Merchant Shipping. This is also the Cypriot authority in charge with vessel safety, security and pollution prevention. If you need help in registering your vessels, our Cypriot company formation experts are ready to assist you in this matter.
The shipping industry in Cyprus
The number of double tax treaties aid the development of the local shipping industry and they also allow the country to expand its influence as a shipping centre.
A good maritime infrastructure along with a good taxation regime and anti-piracy laws guarantee the protection and prosperity of investors in this business field. Specialised shipping companies, either local or international, manage a large proportion of the commercial vessels in Cyprus.
For detailed information about the laws and requirements for shipping companies you can contact our company registration consultants in Cyprus.