Shipping facts in Cyprus


In the latest annual review of Maritime Transport by UNCTAD in 2013, the Cypriot Registry was classified as the 10th largest merchant fleet worldwide. Currently there are approximately 1030 ocean going vessels flying the Cypriot flag and Cyprus is the 2nd largest fleet in terms of deadweight tonnage in the European Union with a deadweight tonnage exceeding 31 million coming only second to Greece. Even more notable is the increase of 7.61% in deadweight tonnage from 2012 which shows that even in times of financial depression shipowners continue to show their trust by flying the Cypriot flag.


Cyprus is considered to be the largest third party shipmanagement centre in the European Union, and one of the largest in the world as around 130 shipowning, shipmanagement and shipping related companies have their offices and conduct their activities from Cyprus. Another interesting fact is that approximately 4% of the world’s fleet is managed from Cyprus.


According to the most recent official statistical data issued by the Central Bank in 2013, the financial contribution of Shipmanagement companies alone to the economy of Cyprus stands at 4.9% of the Gross Domestic Product with €424 million. Also the total number of gainfully employed persons by Cyprus Shipping ashore is approximately 4,500 which represents about 2% of the total gainfully employed population.


Tax regime applicable to shipping activities


Cyprus has a corporate tax of 12.5%, one of the lowest in the European Union, but when it comes to shipping activities Cyprus has enacted a tonnage tax system which was approved by the European Commission on the 24th March 2010 as being in accordance and compatible with the EU acquis.

This new tonnage tax is applicable to shipowners, charterers and shipmanagers provided of course they have a qualifying vessel which is in a qualifying shipping activity as provided by Cyprus law.  This is a unique advantage as the taxation under the tonnage tax system means that profits are irrelevant and only the tonnage of the vessel is taken into account. The calculation is based on a scale and depends on the total net tonnage of the vessel.

Net Tonnage

0 – 1000 NT

1.001 – 10.000 NT

10.001 – 25.000 NT

25.001 – 40.000 NT

> 40.000 NT



per NT


per NT


per NT


per NT


per NT


Using as an example a vessel of 55,000NT registered under the Cypriot flag which made a net profit of €1 million last year.

Tonnage tax calculation

First 1000 tonnes at €0,3650 = € 365

Next 9000 tonnes at €0,3103 = € 2792.70

Next 15000 tonnes at €0,2008 = €3012.00

Next 15000 tonnes at €0,1278 = €1917.00

Next 15000 tonnes at €0,0730 = €1095


                                                               € 9181.70

Tax does not depend on how much profit a vessel is making as under the tonnage tax system the amount will always be the same.

Other tax exemptions

The tonnage tax system exempts qualifying vessels from income tax and corporation tax but also many other forms of Cyprus tax such as:

a) Profits from the operation of vessels;

b) Dividends received from a shipowning company;

c) Capital gains tax from the sale of a vessel flying the Cypriot flag or the shares of a shipowning company;

d) Stamp duty on vessel mortgage deeds;

e) Earnings of crew on board Cypriot vessels ;

f) Inheritance tax when one of the shareholders passes away.


Conditions of ownership

Cyprus as a closed registry imposes some ownership requirements in order for the vessel to be eligible for registration under the Cyprus Ship Registry.

a) Where the ownership of the vessel lies with a physical person and not through a company, 50% of the shares of the vessel must be owned by a Cypriot citizen or citizens of other EU member states which have appointed Cypriot citizens as authorised representatives in Cyprus.

b) Where a company is involved in the ownership of the vessel 100% of the shares must be owned by a company that is registered in accordance with the provisions of Cyprus Companies Law Cap.113. In this instance it does not matter what nationality the shareholders of the company are.

c) A company which was formed in any EU member state country can register its vessels provided that it has appointed a Cypriot representative

d) A company registered outside the EU but is controlled by EU citizens and has appointed a representative in Cyprus or the management is provided by a shipmanagement company based in Cyprus

This means that shipowners do not need to be physically present in Cyprus in order to have their vessels registered in Cyprus. In addition it is not uncommon to see shipowners taking up Cypriot nationality in order to circumvent the requirements as to the ownership of the vessel imposed by the law. How can someone obtain Cypriot nationality?  click here

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Provisional Registration

Under Cypriot Merchant shipping legislation a provisional registration is provided to shipowners which will allow them time to complete the administrative formalities of permanent registration.  This is very helpful when a company under formation wants to proceed with the registration of the vessel as then both incorporation and registration will progress simultaneously.

Once the provisional registration has been approved and the fees and taxes for the provisional period are fully paid a Provisional Certificate of the Cyprus Registry will be issued.

Permanent Registration

If there was first a provisional registration then the period for which Permanent registration must be effected is within 9 months unless an extension is granted. All the relevant documents must be submitted to the Cyprus Ship Registry in order for the Certificate of Cyprus Registry to be issued and the vessel be permanently registered under Cyprus flag.

Parallel Registration

A unique feature of Cyprus Merchant shipping law is that it allows for the parallel or bareboat registration of vessels. A bareboat charter transfers the whole of the vessel to the charterer for an agreed period of time which means that the charterers are in possession and full control of the vessel along with the legal and financial responsibility for it. They must also pay for all operating expenses, including fuel, crew, port expenses and P&I and hull insurance. Under Cyprus law it is possible for such a vessel to be registered with the Cyprus Ship Registry but without deleting the vessel from the foreign registry but merely suspending that nationality for the duration of the charter. The same applies for Cypriot vessels which are chartered on a bareboat basis.


The age of a vessel in Cyprus is calculated by deducting the year in which the keel of the vessel was laid from the year in which the application for registration was filled provided that provisional, direct permanent or parallel-in registration will take place in the same year. 

Otherwise the age will be calculated from the year the provisional, direct permanent or parallel-in registration takes place.

a) Cargo vessels =   25 years maximum age limit

b) Passenger vessels = No maximum age limit

c) Yachts = No maximum age limit

d) Fishing vessels =  25 years maximum age limit

Registration fees

Gross Tonnage (GT)

Passenger Vessels

All other vessels

> 1  GT

1 - 5000 GT

5.001 - 10.000 GT

> 10.000 GT




per GT



per GT



per GT



per GT



Registration fees for passenger vessels are calculated on a separate basis. Pleasure yachts are encompassed in the definition of a passenger vessel but it is important to note that there is a minimum fee of €427,15 for the registration of a passenger vessel regardless of its Gross Tonnage.

As for all other vessels the registration fees are subject to a scale as the annual tonnage tax. Again there is a minimum fee of €213,58 for the registration of a vessel other than a passenger vessel regardless of its Gross Tonnage and a maximum fee of €5.125,80.


Cyprus as a shipping centre has a vast network of professionals that are capable of catering to the everyday needs of a shipowner. From shipmanagement companies, lawyers, accountants, underwriters, port agents, commercial banks and maritime security representatives all of whom are actually and physically based in Cyprus.

Furthermore Cyprus is an EU flag which is classified in the White List of the Paris and Tokyo MOUs and is a signatory to all international maritime conventions on safety and pollution prevention such as SOLAS, MARPOL, LL, CLC, INMARSAT, STCW, COLREG, TONNAGE, FUND, LDC, CSC, SUA, STP, SAR, HNS, BUNKERS, LLMC, FAL, AFS, ILO.

All these together with an extensive double taxation treaty network with 45 countries makes Cyprus a very attractive jurisdiction for owners who want to operate their vessels under a closed registry yet enjoy benefits offered in open registries.


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