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					2 CYPRUS GUIDE TO SHIPPING
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Guide to Shipping

Why
Cyprus
A Sovereign Flag - An International Maritime Centre

• European Union and European Monetary Union Member State.

• Strategic Location at the crossroads of three continents.

• Robust Credit Ratings.

• Lowest Corporate Tax Rate in the EU – 10% on profits.

• Liberal Foreign Direct Investment Regime
  allowing up to 100% foreign participation in most sectors of the economy.

• No Exchange Control and freedom of movement of foreign currency.

• Double Tax Treaties with 45 countries.

• Bilateral Agreements of Cooperation in Merchant Shipping
  with 23 countries including major labour supplying countries.

• Low Set Up and Operating Costs for companies.

• VAT exemption for international transport services
  when the effective use and enjoyment of the services takes place outside the EU.

• Special taxation for shipping companies: Shipowners, charterers and ship managers
  participating in the Cyprus tonnage tax system, are exempted from income tax and any other
  tax or levy on dividends paid to shareholders, on interest earned on working capital and on
  any profit made from the sale of a qualifying ship.

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

• No income tax on the emoluments of officers and crew on board of a Cyprus ship.

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

• Signatory to numerous international maritime conventions.

• Modern and Efficient Legal, Accounting and Banking Services based on English practices.

• Advanced Telecommunications Network and easy access by air and sea.

• Highly Educated, Qualified and Multilingual Personnel.

• Poised for Long Term Growth.

• Enviable Quality of Life.
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Guide to Shipping




Index
1. A Modern Business and Maritime Centre

2. The Cyprus Shipping Company

3. Administrative and Legal Framework

4. Registration of Ships
    4.1 Conditions of Ownership
    4.2 Government Policy on the Registration of Ships in the Cyprus Registry
    4.3 Specific Requirements
    4.4 Types of Registration     A. Provisional Registration
                                  B. Permanent Registration
                                  C. Parallel Registration
    4.5 Registry Transactions and Mortgages

5. Fees and Taxes
    5.1 Fees and Dues regarding Cyprus Ships
    5.2 Taxation of Cyprus Ships

6. Training, Certification and Registration of Seafarers

7. The Cyprus Tonnage Tax System

8. International Relations

9. Appendices
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 Chapter 1                                Geography, Population and Language

 A Modern                                 Cyprus is an island in the Eastern Mediterranean, which
                                          covers an area of 3.572sq miles (9.251 sq km) and stands
 Business                                 at the crossroads of Europe, Africa and Asia. It is the third
                                          largest island in the Mediterranean, smaller than Sicily and
 & Maritime                               Sardinia, but larger than Corsica and Crete. It has a varied and
                                          picturesque coastline of 848 miles (1.364 km) with long sandy
 Centre                                   beaches, and a rich variety of vegetation and fruit.

 The population of Cyprus is about 870.000. The capital of Cyprus is Lefkosia situated in the heart
 of the island with a population of approximately 315.000. The second largest city is Lemesos on
 the south coast with a population of approximately 230.000 and the island’s major port. Larnaca
 and Pafos are the third and fourth largest cities, each with a new airport, situated on the south
 west and south east coasts respectively.

 The native official languages are Greek and Turkish, but English is widely understood and
 extensively spoken. German and French are spoken at most hotels and shops as well.
 Local time is two hours ahead of GMT (Greenwich Mean Time), 7 hours ahead of New York and
 7 hours behind Tokyo.

 The climate is generally sunny and dry throughout the year. The sun shines for about 340 days a
 year. Winter is mild and the bathing season practically starts from April and only ends in November.

 Government and legal system
 Cyprus is a Democratic state. The Executive authority is vested in the President who is elected
 for a five year term by universal vote and exercised by the Council of Ministers appointed by the
 President.

 The Legislative authority of the Republic is exercised by the House of Representatives. House
 Members are elected by universal vote every five years.

 The administration of Justice is exercised by the Judiciary, which is a separate and independent body.

 On the 1st May 2004, Cyprus became a Member of the European Union.
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                                                            Economy
                                                            Cyprus has an open, free-market, services-based economy.

                                                            Cyprus’s major imports are raw materials, consumer and
                                                            capital goods, transport equipment and fuel, while major
                                                            exports are pharmaceutical products, cement, cigarettes,
                                                            paper products, plastic products, potatoes, citrus fruit,
                                                            wines, and furniture.

The tertiary sector of services is considered as the backbone of the Cyprus economy, accounting for
about 78% of GDP in 2009.

Below you will find statistical information regarding Cyprus GDP, Inflation Rates and registered
unemployment.

Cyprus Economic Indicators
    Indicator                                                          2007      2008        2009        2010
    Real GDP Growth (annual % change)                                  5,1       3,6          -1,7        1,0
    Inflation Rate                                                     2,4       4,7          0,3         2,4
    Registered Unemployed                                              4,0       3,6          5,3         6,5
    Source: Statistical Service of the Republic of Cyprus, Eurostat.


Cypriots enjoy a high standard of living. In terms of per capita income, estimated at EUR 21.171
in 2010, Cyprus is classified by the World Bank among the high-income economies.

As of January 1st 2008, the Cyprus Pound ceased to be legal tender and the new currency is now
the Euro (€).

Fiscal Incentives
Corporate Tax
A company is tax resident in Cyprus when its management and control is exercised in the Republic.
Its taxable income includes all income earned both in Cyprus and abroad. A non-Cyprus tax resident
is taxed only on income earned in Cyprus.

All companies are subject to a uniform tax rate of 10% which is the lowest corporate tax rate in the
European Union. A special tax regime applies for shipping companies.
Moreover, various tax exemptions apply for corporate tax such as:
•   exemptions in respect of dividends received from other companies;
•   exemption in respect of interest income under special conditions;
•   favourable tax treatment of losses;
•   no tax on profits earned from permanent establishments abroad under certain conditions;
•   no tax on capital gains derived from the disposal of securities;
•   no tax on profits from company reorganisations;
•   tax relief on foreign tax paid.
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 Personal Income Tax
 Individual tax resident of Cyprus is an individual who stays in the Republic for 183 days in the year of
 assessment. Cyprus tax residents are taxed on income earned both in Cyprus and abroad. On the
 contrary, non tax residents are taxed on income earned only from Cyprus sources.

 The rates for income tax currently applicable are listed in the table below.
    Taxable Income (€)            Tax Rate (%)
    0 - 19.500                           0
    19.501 - 28.000                     20
    28.001 - 36.300                     25
    36.301 - 60.000                     30
    > 60.000                            35

 Dividends are exempted from income tax. Subject to certain conditions, dividends are subject to
 special contribution for the defence at the rate of 15%, and interest income at the rate of 10%
 applicable only to residents.

 For the avoidance of double taxation, Cyprus concluded over 30 double tax treaties, covering 45
 countries (Appendix 1).

 Professional services
 Major international accounting companies and various local ones are represented by partners with
 in-depth knowledge of the local tax and accounting environment. Various law firms specialise in
 international work and assist foreign investors with both set-up and contractual formalities.

 Cyprus has a young, well-educated talent pool. The country is committed to education and is focusing
 on reforms to achieve sustainable growth. The island ranks among the leading countries of the world
 in terms of the proportion of university graduates.

 Foreign Direct Investment
 Cyprus is one of the most attractive locations for foreign investments, ranking among the frontrunners
 of the world, indicating both high FDI performance as well as high FDI potential, based on the latest
 data of the Central Bank of Cyprus in 2010.
 Foreign companies have the opportunity of investing and establishing business in Cyprus on equal
 terms with local investors; no distinction is being made between foreign and Cypriot companies.
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Ports and Airports
There are three commercial ports in Cyprus, which are open to international maritime traffic,
the largest of which is in Limassol. There are two Yachting marinas one in Larnaca and one in
Limassol.

There are two international airports, one located in Larnaca and the other in Paphos. The national
airline is Cyprus Airways, and there are over 28 other international airlines flying to and from
Cyprus.

Telecommunications
Cyprus has one of the best and cheapest telecommunication services in the world; it is connected
by ISD (Instant Self Dialling), which also offers fax facilities to any country in the world. The Internet
is also the modern day communication route in Cyprus, progressing with demands and providing
excellent gateways to the world.

Maritime Centre
Cyprus has over the years become one of the largest and widely known shipping centres in
the world, comprising both ship owning and ship management companies. Several of the ship
management companies which operate on the island rank among the largest of their kind in the
world and it is estimated that they manage about 20% of the world’s third party managed fleet.

The Cyprus Registry has shown phenomenal growth in the last thirty years. In the early eighties,
Cyprus ranked thirty-second on the list of leading maritime nations. It now ranks tenth in the
world with a merchant fleet exceeding 20 million gross tons. Also, the Cypriot merchant fleet
ranks third in the European Union with a percentage of about 11% of the total fleet of the 27 EU
Member States.

The classification of Cyprus flag in the ‘White List’ of the Paris and the Tokyo MOUs on Port State
Control, as well as its exclusion from the “List of Targeted Flag States” of the U.S. Coast Guard,
reveal Cyprus’s commitment to safety and quality.
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  Chapter 2                                Legal Status
                                           The first step to be taken by all non-European shipowners
                                           who wish to register a vessel under the Cyprus flag is to
  The Cyprus                               form a Cyprus Shipping Company (hereinafter referred to
                                           as ‘the company’) which will acquire the vessel in its name.
  Shipping                                 The company is registered as a private company with
  Company                                  limited liability (limited by shares) under the provisions of
                                           the Cyprus Companies Law, Chapter 113 of the Statute
                                           Laws of Cyprus, as amended.

  For the incorporation of the company, the filing of the memorandum and articles of association in
  Greek with the Registrar of Companies is required. The incorporation of the company is evidenced
  by the issue of a certificate of incorporation by the Registrar of Companies.

  The time required for incorporation is about 3 - 5 days from the filing of the incorporation documents.
  The present legislation contains provisions which facilitate the acceleration of the various procedures
  in urgent cases.

  Memorandum
  and Articles of Association
  The memorandum must contain the objects of the company, set out as widely as possible. These
  are the usual ones of a shipping company e.g. to own and operate vessels, borrow money, mortgage
  its vessel, etc.

  The articles usually adopt Table A of the Companies Law with a number of changes or additions as
  deemed necessary. The most usual departures from Table A are: pre-emption of the rights in case of
  transfer of shares; full borrowing powers of directors; lower quorum for meetings; simplified sealing
  provisions, appointment of alternate directors, etc.

  Name of the Company
  The name of the company must end with the word ‘limited’ or “Ltd”. Prior approval of the name by
  the Registrar of Companies is required. Very general or deceptive names are not accepted nor are
  names likely to lead to confusion with existing ones. It usually takes 2 days to obtain a name approval
  but the procedure may be expedited upon request.
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                                          Registered Office
                                          This, by law, must be in Cyprus. It is usually situated at
                                          the offices of either the lawyers who have incorporated
                                          the company in Cyprus or the accountants who act for the
                                          company in the island, unless the company has a more
                                          substantial presence in the island and operates from fully
                                          fledged offices or has a sister management company or
                                          affiliate here. The registers and minute-books are kept with
                                          the secretary of the company.


Share Capital
The share capital of the company may either be nominal (e.g. €100) or the actual amount to be
deposited by the promoters for the pursuit of the venture. It may be paid up in full or by calls, in cash
or for consideration other than cash and the shares may be allotted a par value. Any class of shares
e.g. ordinary or preference, and with different voting and dividend rights, are acceptable. All shares
must be nominative; bearer shares are unacceptable.

Shareholders
GENERAL
One shareholder is required for the incorporation and continued existence of a Cyprus private
company. The nationality of the shareholders is immaterial. Under Cypriot law all shareholders of
a shipping company may be foreigners residing outside the island. The transfer of shares from one
foreigner to another is allowed.

SECURITY OF
BENEFICIAL SHAREHOLDERS
The trust relationship is recognised under Cypriot law both by statute and in equity. The principles of
equity which apply under English law are applicable in Cyprus as provided by the Courts of Justice
Law, 1960. The security documentation of the beneficial owner (according to the practice followed
by law firms) comprises the following:

• the trust deed;
• the original share certificates which are issued in the names of the nominee shareholders;
• instruments of transfer of shares executed in blank;
• directors’ resolutions approving the transfer of shares (where nominee directors are appointed);
• undated letters of resignation of the nominee directors;
• irrevocable dividend mandates for payment of dividends to the beneficial owners or to an account
  designated by them.

MEETINGS
General meetings may be held abroad and, as a rule, written resolutions signed by all shareholders
will suffice in lieu of a meeting. Annual general meetings must be held every year, the first to be held
within 18 months from incorporation.
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                                           Directors
                                           One or more directors may be appointed. The nationality
                                           of directors is totally immaterial and does not affect the
                                           status of the company in any way. Thus, there is no
                                           obligation to have local directors, unless it is considered
                                           advisable to establish local management for tax or other
                                           reasons. Share qualifications are not required.

  The appointment and removal of directors are in the hands of the shareholders, and special rights
  may be given for this purpose to a specific class of shares.

  Board meetings may be held in any country of the world. Directors’ resolutions may be taken
  in one of two ways:

  • at a board meeting duly convened and held or
  • without a meeting provided that the resolution is signed by all the directors.

  The names of the directors should be disclosed to the Registrar of Companies by separate returns
  which are open to public inspection. Their names and nationalities (for foreigners) must by law appear
  on the letterheads but, in practice, this is not observed for shipping companies.

  Secretary
  A company secretary must be appointed by the directors and is removable by them. The
  nationality of the secretary is totally immaterial and does not affect the status of the company
  in any way. However, it is advisable that the secretary be a company or a person resident at the
  place where the directors reside and that an assistant secretary be appointed in Cyprus to attend
  to company annual formalities in the island. This will ensure that all company annual returns are
  promptly signed and filed with the Registrar of Companies by the secretary and recorded. A
  director (but not a sole director), unless the company has one shareholder, may also act as the
  company’s secretary.

  Returns
  Annual returns, must be filed. The names of the registered shareholders must appear in the annual
  returns filed with the Registrar of Companies. Any charges against the company must be filed and
  registered. Once filed the returns are open to public inspection.

  Procedure for Incorporation
  A limited liability company can be incorporated in one of the following ways:

  • by the actual shareholders appearing as subscribers to the memorandum and articles of
    association and signing the said documents;
  • by Cypriot nominees (usually members of the law firm who are acting for the formation of the
    company) subscribing to the memorandum and articles of association and later transferring their
    subscription shares to the actual shareholders by instruments of transfer.
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Required Particulars
In order to proceed with the formation of a Cyprus shipping company, law firms in Cyprus require
the following particulars:

• desired company name (more than one name should be given if time is of the essence);
• amount of authorised share capital;
• whether shareholders will subscribe to the memorandum and articles of association themselves
  or through Cypriot nominees;
• whether shares will be held in trust by Cypriot nominees;
• names, address, nationality and occupation of beneficial shareholders;
• name, address, nationality and occupation of directors;
• name and address of secretary;
• registered office.

Auditors and Accounts
Companies required to submit audited accounts must appoint approved auditors. Auditors are
appointed by the annual general meeting (or by the directors, until the convening of such a meeting)
and are thereby removable. Powers and duties of auditors are similar to those under English law
prior to 1967.

The books may be kept abroad and denominated in any currency.

Costs
The Companies (Fees and Dues Payable) Regulations provide that the fees payable on incorporation
are the Registration Fees, which are a fixed amount of €102,52 plus 0,6% on the nominal capital.
There are no annual official fees payable in order to keep the company in good standing and operative,
but there is a stamp duty of €17,09 for filing the annual returns.
Charges are levied for the registration of changes against the shipowning company, with the Registrar
of Companies.

Commencement of Trading
Upon the issue of the certificate of incorporation by the Registrar of Companies, the company may
commence its activities forthwith and register a vessel in its name.
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  Chapter 3                              Maritime Administration
                                         Responsibility for the development of maritime activities
                                         lies with the Ministry of Communications and Works.
  Administrative                         Its authority and jurisdiction are exercised through the
                                         Department of Merchant Shipping (DMS).
  and Legal                               The Department of Merchant Shipping was established
  Framework                               and started functioning as a distinct entity in the
                                          Ministry of Communications and Works, in 1977. The
  Department’s activities include: registration of ships, administration and enforcement of the
  merchant shipping legislation, control of ships and enforcement of international conventions,
  investigation of marine casualties, resolving labour disputes on board Cyprus ships, and training
  and certification of seafarers.

  Work is carried out towards quality assurance certification of the DMS according to the ISO
  9001: 2008 standard. The DMS Maritime Training and Certification Division, responsible for the
  implementation of the STCW Convention, has obtained the ISO certification since February 2004.

  Maritime offices are established in Piraeus, Hamburg, Rotterdam, London, New York and Brussels
  in order to extend the services provided by the Department of Merchant Shipping and to strengthen
  the presence of Cyprus abroad.

  A global network of inspectors of Cyprus ships is established by the Government of the Republic
  of Cyprus. The aim of the programme is the verification and enforcement of compliance of
  Cyprus ships with the applicable provisions of the national and international maritime legislation
  relating to safety, pollution prevention, the qualifications of the seafarers and the living and
  working conditions on board Cyprus ships. Fifteen inspectors carry out inspections of Cyprus
  ships in thirteen ports worldwide (Appendix 2). These Flag State inspections are carried out at
  no cost to the shipowners.

  The safety standards of the Cyprus fleet have been improved. The number of casualties and
  the rate of Port State Control detentions have been dramatically reduced. This is evident by the
  annual reports of the various PSC regimes. Cyprus is now permanently on the White List of the
  Paris and the Tokyo Memoranda of Understanding on Port State Control (Paris MOU and Tokyo
  MOU) and is also excluded from the “List of Targeted Flag States” of the US Coast Guard.
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                                       The International Ship and Port Security Code (ISPS Code)
                                       has been adopted and is being implemented. Already all
                                       ships under the Cyprus flag as well as all port facilities
                                       in Cyprus have been duly certified as complying with the
                                       requirements of this code.
                                       Instructions have been issued by the Department of
                                       Merchant Shipping on how to proceed in order to achieve
                                       compliance in time and include measures to enhance
                                       maritime security.

Legal Framework
The administration of the Register of Cyprus Ships is governed by the Merchant Shipping
(Registration of Ships, Sales and Mortgages) Laws, 1963 to 2005 (Law No 45 of 1963 as amended)
which are based on the British Merchant Shipping Acts, 1894 to 1954. The Merchant Shipping
(Masters and Seamen) Laws, 1963 to 2002 (Law No 46 of 1963 as amended) and the Merchant
Shipping (Fees and Taxing Provisions) Law of 2010 (Law No 44(I) of 2010) are the other principal
merchant shipping laws.

Cyprus has ratified the major international conventions on maritime safety and security, prevention
of pollution of the sea, training, certification and watchkeeping of seafarers and limitation of
shipowners’ civil liability and conventions on maritime labour. Appendix 3 provides a list of the
treaties to which the Republic is a contracting party and for which the International Maritime
Organization and the International Labour Organization are the depositories. Cyprus is also party
to the Convention on the High Seas, 1958 and the United Nations Convention on the Law of the
Sea, 1982.

Cyprus has also concluded a number of bilateral agreements on the avoidance of double taxation
and on co-operation in the field of merchant shipping (see Chapter 8, International Relations) which
provide, inter alia, fiscal advantages and incentives for effective tax planning and advantages in
the engagement of foreign seafarers on board Cyprus ships.

Please note that the latest applicable legislation
and circulars of the Department
may be found on www.shipping.gov.cy
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  Chapter 4


  Registration
  of ships
  4.1. Conditions of Ownership
  A vessel may only be registered in the Register of Cyprus Ships if:

  A) more than fifty percent (50%) of the shares of the ship are owned:
  • by Cypriot citizens or
  • by citizens of other Member States 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 are owned by one or more corporations, which have
     been established and operate:
  • in accordance with the laws of the Republic of Cyprus and have their registered office in the
    Republic, or
  • in accordance with the laws of any other Member State and have their registered office, central
    administration or principal place of business within the European Economic Area and which
    will have either appointed an authorised representative in Cyprus or the management of the
    ship is entrusted in full to a Cypriot or a Community shipmanagement company having its
    place of business in Cyprus, or
  •   outside Cyprus or outside any other Member State but controlled by Cypriot citizens or citizens
      of Member States and have either appointed an authorised representative in Cyprus or the
      management of the ship is entrusted in full to a Cypriot or a Community shipmanagement
      company having its place of business in Cyprus. The corporation is deemed to be controlled
      by Cypriots or citizens of any other Member States when more than fifty percent of its shares
      are owned by Cypriots or citizens of any other Member States or when the majority of the
      Directors of the corporation are Cypriot citizens or citizens of any other Member State.
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                                         An authorised representative may be a Cypriot citizen
                                         or a citizen of any other Member State, who is resident
                                         in the Republic, or a partnership / corporation / branch
                                         established in accordance with the laws of Cyprus, which
                                         has its place of business in the Republic and which employs
                                         permanent staff in the Republic.

                                     In view of the above requirements, it is common for owners
                                     wishing to register their ships under the Cyprus flag to
incorporate a company in Cyprus, which will either acquire the ship in its name, or bareboat charter
the ship.

Practice and custom have created a special type of Cyprus shipowning company (hereinafter
referred to as ‘the company’), which is limited by shares and has a nominal capital, usually €1.000
divided into 1.000 shares of €1 each.

In accordance with the Advocates Laws of Cyprus, only lawyers registered as practising advocates
in Cyprus are entitled to draft the necessary documents for the incorporation of Cypriot companies
as well as to carry out all registry transactions. Therefore, the first step to be taken by persons
interested in registering a vessel under the Cyprus flag is to engage the services of a local lawyer
(for further information visit the Cyprus Bar Association web site: www.cyprusbarassociation.org).

The main types of vessel registration in Cyprus are Provisional, Permanent and Parallel registration
(see Chapter 4.4).

4.2. Government Policy on the Registration of Ships
The Policy states the additional requirements or conditions for the registration of ships which are
deemed necessary for the achievement of safe, secure and efficient shipping on clean oceans and
should always be read in conjunction with the relevant provisions of the statutes of the Republic
of Cyprus.

The interpretation of the Policy is and remains the exclusive prerogative of the Director of the
Department of Merchant Shipping (the Director) and of the Registrar of Cyprus ships (the Registrar),
as the case may be.

The determination of the age and of the type of the ship for the purposes of the application of the
provisions of the Policy is and remains the exclusive prerogative of the Director and of the Registrar,
as the case may be.

The full text of the Government Policy on the Registration of Ships is available on the website of the
Department of Merchant Shipping www.shipping.gov.cy. The main provisions of the Government
Policy are as follows:

Eligibility for registration and related requirements

Ships of any type or size, other than those specified below, may be registered in the Register
of Cyprus Ships or the Special Book of Parallel Registration, provided the applicable age-related
requirements and the applicable type-related requirements are complied with.
18 CYPRUS GUIDE TO SHIPPING




  Ships which do not qualify for registration

  The Registrar of Cyprus Ships will not consider applications for the registration in the Register of
  Cyprus Ships or in the Special Book of Parallel Registration of ships which:

  (1) at the time of the application for their registration, are banned on port State control grounds by
      a State member of any one of the Memoranda of Understanding on port State control, from
      entering the ports of the States party to that memorandum or which have been banned by a
      State from entering its ports;

  (2) have been detained on port State control grounds on three (3) or more occasions during the
      two (2) years period prior to the date of application for registration by States members of the
      Paris or the Tokyo or the Mediterranean Memoranda of Understanding on port State control or
      by the United States Coast Guard; and

  (3) have been constructed for exclusive use on inland navigation or which are to be used exclusively
      on inland navigation (e.g. in internal waters, rivers, inland waterways, canals, natural or artificial
      lakes, water reservoirs or dams).


  Age-related requirements
  For the purpose of the Policy “age” means the age of the ship which is calculated by deducting the
  year in which the keel of the ship was laid from the year in which the application for its registration
  was filed with the Registrar of Cyprus Ships, provided its provisional, direct permanent or parallel-in
  registration is to take place during the same year. Otherwise, the age of the ship will be calculated
  from the year in which the provisional, direct permanent or parallel-in registration is to take place.

  In case a ship has undergone major conversion or reconstruction, the year in which the major
  conversion or reconstruction begun may be taken into account (in lieu of the year in which its keel was
  laid) for the calculation of the age of the ship, provided the ship, at the end of the major conversion
  or reconstruction, complied with all the requirements of the applicable international treaties to which
  Cyprus is a State Party, as if it was a new ship whose keel was laid in the year in which the major
  conversion or reconstruction begun. In such a case the application for the registration of the ship
  should be accompanied by documentation from the recognized organization which is surveying and
  certifying the ship on behalf of its flag State or from its flag State attesting so.
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The registration in the Register of Cyprus Ships or the Special Book of Parallel Registration of the
ships of the types specified in the table below may be allowed provided:

(1) the age of the ship does not exceed the maximum age limit corresponding to the type of the
    ship; and

(2) the related conditions corresponding to the type of the ship (i.e. entry inspection and additional
    inspection) are complied with.


Type-related requirements
The registration in the Register of Cyprus Ships or the Special Book of Parallel Registration of the
ships may be allowed provided the requirements set out in this section which relate to the type of
the ship are complied with.

Passenger and cargo ships

“Cargo ship” means a ship which has been constructed or adapted for the purpose of carrying cargo
in any form.

 “Passenger ship” means a ship which has been constructed or adapted for the purpose of carrying
fare-paying passengers.

Passenger ships, high speed passenger ships, cargo ships and high speed cargo ships engaged on
international voyages, including short international voyages, should engage for sea training cadets
who are permanent residents of the Republic of Cyprus, if requested by the Director.

Fishing vessels

For the purpose of the Policy “fishing vessel” means those ships, which are employed in fishing
operations or for the processing, storage or carriage of fish (fish is used as a collective term and
includes molluscs, crustaceans and any aquatic animal which is harvested) or in any operations
(including transhipment of fish) ancillary thereto, but it does not include any ship used for the transport
of fish or fish products as part of a general cargo.
20 CYPRUS GUIDE TO SHIPPING




  The Registrar will not consider applications for the registration of fishing vessels unless they are
  accompanied by an official communication from the Director of the Department of Fisheries and
  Marine Research of the Ministry of Agriculture, Natural Resources and the Environment, informing
  the Registrar of Cyprus ships that the registration of the fishing vessel in question is allowed.

  Fishing vessels which, in accordance with Article 1(1) of the Council Directive 97/70/EC of
  11 December 1997 setting up a harmonized safety regime for fishing vessels of 24 metres in length
  and over, as amended and as it may be amended and in force at the particular time, are outside the
  scope of the directive, are required, as the Director may in each case determine:

     (1) to be classed with one of the recognized organizations;

     (2) to comply with the codes, guidelines, recommendations and standards of the International
         Maritime Organization and/or of the International Labour Organization and/or of the Food
         and Agricultural Organization and/or of the European Union which are relevant to their type
         and to be surveyed and certified to that effect by one of the recognized organizations.

  Other types

  Ships other than those which are required to be surveyed and certified in accordance with the
  provisions of the international treaties to which Cyprus is a State Party or passenger ships or
  passenger high speed craft engaged on domestic voyages within the territory of Cyprus or fishing
  vessels or recreational craft, are required, as the Director may in each case determine:

     (1) to be classed with one of the recognized organizations;

     (2) to comply with the codes, guidelines, recommendations and standards of the International
         Maritime Organization and/or of the International Labour Organization and/or of the
         European Union which are relevant to their type and to be surveyed and certified to that
         effect by one of the recognized organizations.

  The entry inspection and the additional inspections specified in the table below are required to be
  carried out in case the age of the ship is equal or greater than the number of years indicated under
  the related conditions corresponding to the type of the ship.
                                                            CYPRUS GUIDE TO SHIPPING 21




                                                     RELATED CONDITIONS

     TYPE OF SHIP           MAXIMUM      ENTRY INSPECTION     ADDITIONAL INSPECTION
                            AGE LIMIT       REQUIRED                REQUIRED



CARGO SHIPS AND CARGO          Yes              Yes
   HIGH SPEED CRAFT                                                      No
                            ≤ 25 years     if ≥ 15 years


   PASSENGER SHIPS AND                                                     Yes
  PASSENGER HIGH SPEED                          Yes           if 2 years ≤ Age ≤ 10 years
    CRAFT ENGAGED ON           No          if ≥ 30 years                Biennial
INTERNATIONAL OR SHORT                                            if Age > 10 years
 INTERNATIONAL VOYAGES                                                 Annual

  PASSENGER SHIPS AND                                                      Yes
 PASSENGER HIGH SPEED                           Yes           if 2 years ≤ Age ≤ 10 years
   CRAFT ENGAGED ON            No                                       Biennial
                                           if ≥ 25 years
DOMESTIC VOYAGES WITHIN
THE TERRITORY OF A STATE,                                         if Age > 10 years
   OTHER THAN CYPRUS                                                   Annual

  PASSENGER SHIPS AND                                                    No
 PASSENGER HIGH SPEED                           Yes              In order to operate
   CRAFT ENGAGED ON            No          if ≥ 20 years       they are required to be
DOMESTIC VOYAGES WITHIN                                        inspected and certified
THE TERRITORY OF CYPRUS                                                annually

    FISHING VESSELS            Yes              Yes
                            ≤ 25 years     if ≥ 20 years                 No

  FLOATING PRODUCTION
  STORAGE OFFLOADING;
                               Yes              Yes
(FPSO) FLOATING STORAGE                                                  No
OFFLOADING VESSELS (FSO)    ≤ 25 years     if ≥ 15 years
  AND MOBILE OFFSHORE
     DRILLING UNITS

                                                                           Yes
                                                                 if the ship is carrying
    SHIPS OF TYPES                                           industrial or special purpose
   OTHER THAN THOSE            Yes              Yes             purpose personnel and
     LISTED ABOVE           ≤ 35 years     if ≥ 20 years
                                                               2 years ≤ Age ≤ 10 years
                                                                         Biennial
                                                                    Age > 10 years
                                                                       Annual
22 CYPRUS GUIDE TO SHIPPING




  4.3. Specific Requirements

  Language of Supporting Documentation
  Cypriot legislation provides that all documents which refer to Cyprus ships (i.e. including documents
  for their registration) are admissible provided that they are drawn up in a language comprehensible to
  the competent officers of the Department of Merchant Shipping. In practice, most of the documents
  are admissible in the English language. Such provision makes the registration of vessels faster and
  saves on translation expenses.

  Ownership
  The application for registration of a vessel 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.

  Entry and Additional Inspections

  The entry inspection and the additional inspections are carried out by the Surveyors at the expense
  of the registered owner or registered bareboat charterer as the case may be.

  The entry inspection of a ship should be carried out no later than three (3) months from the date of
  the provisional, or the parallel-in registration, or direct permanent registration.

  The additional inspection, where required, should be carried out within three (3) months before or
  after the anniversary of the date of the registration of the ship and should be held:

     (1) every other year when the ship is having an age equal or greater than two (2) years and
         equal or less than ten (10) years; and

     (2) every year when the ship is having an age greater than ten (10) years.

  In case the parallel out registration of a ship, which is required to undergo an entry and/or an
  additional inspection, is effected within three (3) months from the date of the provisional or direct
  permanent registration, the entry inspection and, where required, the additional inspections, are
  postponed for the duration of the period the ship is allowed to be registered in parallel in a foreign
  registry and should be carried out no later than three (3) month from the date of expiry or termination
  of the period parallel out registration.

  In case a ship, which is required to undergo an entry and/or an additional inspection, is laid up or is
  to be laid up within three (3) months from the date of the provisional or direct permanent or parallel in
  registration, the entry inspection and, where required, the additional inspections are postponed for
  the duration of the laid-up period and should be carried out no later than three (3) months from the
  date on which the lay-up period ended.

  Management and Operation of a Vessel
  The management and operation of a vessel is evidenced by the Joint Declaration on the Operation
  of a Ship (Form ISM.01Revision 3) (see Circular No. 27/2006).
                                                                         CYPRUS GUIDE TO SHIPPING 23




                                       A vessel is considered as managed and operated by a
                                       shipmanagement company if that company holds, or is
                                       to be issued, by or on behalf of the Government of the
                                       Republic of Cyprus, with a valid, for the type of the vessel,
                                       Document of Compliance (DoC) or Interim DoC and the
                                       vessel is to be issued with a Safety Management Certificate
                                       (SMC) or Interim SMC by or on behalf of the Government of
                                       the Republic of Cyprus, indicating that it is operated by the
                                       said company. Alternatively, the management of a vessel
shall be proved by an audit of the management company carried out to the satisfaction of the
DMS. Such audit shall be carried out, to the extent possible, in accordance with the requirements
of the ISM Code.

Conditions after Registration
The conditions under which a vessel is registered continue to be in force irrespective of any
subsequent amendments of the government policy. Registered owners or registered bareboat
charterers of a ship whose registration was allowed under the provisions of the 2009 Policy or of
earlier ones, as the case may be, may apply for substitution of the conditions which were imposed
at the time of the initial registration of the ship with those stipulated in the Policy for ships of the
same type and/or age. For this purpose, the age of the ship will be the age the ship had at the time
of its’ initial registration.

Request for Assessment and Certification in accordance
with the provisions of Chapter IX of SOLAS 74 as amended and the ISM Code

The International Safety Management Code (ISM Code) is mandatory for passenger vessels and self-
propelled cargo vessels, irrespective of type, of 500 gross tonnage and upwards.

The management companies must hold a valid interim or full term Document of Compliance (DoC)
issued by or on behalf of the Republic of Cyprus and each passenger vessel and cargo vessel of
500 gross tons and upwards, should be provided with an Interim Safety Management Certificate
(SMC).

Cyprus has already enacted the necessary legislation and the Department of Merchant Shipping
has issued several Guidance Notes since the introduction of the ISM Code. The latest consolidated
Guidance Note (Circular no. 27/2006), contains among other things:

   (1) The notification procedure to be followed by the owner of each Cyprus ship in order to
       identify the company to the Department;

   (2) Additional requirements on matters to be addressed by the Safety Management System
       (SMS);

   (3) Recognised organizations which the owner or the company may engage for the purpose
       of verification and certification of the SMS (List of the Recognised Organisations can be
       found in Appendix 5);

   (4) Mandatory rules and regulations which, as a minimum, must be addressed by the SMS.
24 CYPRUS GUIDE TO SHIPPING




  Document of Safe Manning
  Every Cyprus ship should be in possession of a valid document of safe manning specifying the
  number and composition of her complement. Owners of Cyprus ships should apply to the Department
  of Merchant Shipping requesting the issue of a document of safe manning.

  If the vessel is designed and constructed with unattended machinery spaces, or is provided with any
  other automated machinery or remote controls, on account of which the owner may seek reduced
  manning, then the owner should indicate these in his application and should request the vessel’s
  classification society to advise the Department on these, including the corresponding class notation
  and confirm the class position of the vessel, as far as this notation is concerned.

  If the vessel is to be engaged exclusively in trading in a particular geographical area and the owner
  seeks reduced manning on account of this, then he should indicate it by stating the names of the
  ports from which the vessel will be plying or by providing the geographical co-ordinates (latitude and
  longitude) and other appropriate information defining the geographical area in which the vessel will
  be sailing or by submitting an appropriately marked chart.

  4.4. Types of Registration
  A. Provisional Registration
  Administrative Procedures
  The Cypriot merchant shipping legislation allows for the provisional registration of a vessel and most
  owners usually opt to have their ship provisionally registered first. This will allow them time (up to 9
  months, including a 3 month extension) during which they will be able to complete the administrative
  formalities for permanent registration.

  The application for registration of a ship under the Cyprus flag must be made by a local lawyer
  to the Minister of Communications and Works through the Registrar of Cyprus Ships. In practice,
  the Registrar will also accept the submission of applications for registration of ships on behalf of
  companies under formation, so that the incorporation of the company and registration of the ship can
  progress simultaneously. However the company must be duly incorporated prior to the registration
  of the vessel.

  A ship may be provisionally registered under the Cyprus flag either in Limassol, by the Registrar
  of Cyprus Ships or by any officer at any diplomatic mission or consular post of the Republic of
  Cyprus abroad (hereinafter referred to as “consular officer”) who will act on instructions issued by
  the Registrar of Cyprus Ships.
                                                                         CYPRUS GUIDE TO SHIPPING 25




At the time of her provisional registration under the Cyprus flag a ship must be at a port so that she
can be surveyed and certified on behalf of the Cypriot Government. The presence of the ship at the
port or place where the provisional registration will be effected, is not necessary.

Application for Provisional Registration
In order to enable the Registrar of Cyprus Ships to initiate the procedure for the provisional
registration of a ship, the following information is required:

• name of the vessel and her flag at the time of the application;
• name of the person (legal or natural) applying for the registration of the vessel;
• name of the vessel under which she will be registered;
• particulars of the vessel (type, year of build, date the keel of the vessel was laid,
  gross and net tonnage);
• name of the classification society with which the ship is entered. If the owners of the vessel
  contemplate a change of the classification society on acquiring the vessel this should also
  be stated;
• Declaration of Particulars for ISM Code (Form ISM01/Revision03);
• intended trading area and activities of the vessel;
• place where the vessel will be at the time of her provisional registration, if known. This must
  be communicated to the Registrar of Cyprus Ships prior to the provisional registration;
• the consular office where the owners wish to effect the provisional registration of the
  vessel (in the case the provisional registration of the vessel will not be carried out in Limassol);
• name and address of the registered shareholders and directors of the company in whose
  ownership the vessel will be registered.

Change of Ship’s Name
If a change of the ship’s name is contemplated, 3 days must elapse between the date on which the
application is submitted to the Registrar of Cyprus Ships and the date on which the registration of
the ship or the proposed change in the name shall take place.

Recognised Classification Societies
It should be noted that the vessel must be classed with one of the classification societies that the
Cypriot Government recognises. These are listed in Appendix 5.

Recognised Radio Traffic Accounting Authorities
It should be noted that the vessel must be covered by one of the radio traffic accounting authorities
which the Cypriot Government recognises. These are listed in Appendix 6.

All maritime radio communications accounts must be paid by an accounting authority. Payments
made directly through land earth stations or international service providers are not allowed.

Point of Service Activation (P.S.A.)
For the purpose of activation/deactivation for maritime mobile earth stations, vessels should nominate
their preferred PSA that the Cypriot Government recognizes. These are listed in Appendix 7.
26 CYPRUS GUIDE TO SHIPPING




  Supporting Documentation/ Information
  The following documents/information must be forwarded to the Registrar of Cyprus Ships together
  with the application for the provisional registration of the vessel or must reach the Registrar on a
  later date soon thereafter but in any case prior to the dispatch of instructions for the provisional
  registration of the vessel under the Cyprus flag:
  All documents should be duly executed where applicable.
  • Memorandum and Articles of Association of the Cypriot Company*;
  • Certificates of Incorporation, Directors and Secretary, Shareholders and Registered Office of
    the Cypriot company*;
      In the case of companies established in the EU or EEA or established outside the EU or EEA but
      controlled by citizens of the EU or EEA, a Notarial Certificate issued by a Notary Public or the
      competent authority of the relevant State can be submitted instead of the documents mentioned above.*
  • 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/ Certificate of Ownership and freedom of encumbrances
    from the previous registry;
  • Confirmation of Radio Traffic Accounting Authority (where applicable);
  • Confirmation of Vessel’s Classification Society (where applicable);
  • Form ISPS C1 (Circular 18/2003) (where the International Ship and Port Facility Security Code
    is applicable);
    Continuous Synopsis Record (C.S.R.) (where applicable). The deletion CSR must be forwarded
    within three (3) months in the case of ships coming from a foreign registry.
  • Declaration of ownership (M.S. 3 or M.S. 2);
  • Form of Appointment of Authorised Representative (M.S. 57)**;
  • Registration Form of a Mobile Maritime Radio Station (M.S. 34) and copy of Shore Based
    Maintenance Agreement;
  • Registration Form of SAR Particulars (M.S. 45) (where applicable);
  • ISM forms (Circular No. 27/2006) (where applicable);
  • For vessels whose keel was laid before 1st October 1994, confirmation from the classification
    society stating that the ship is free from any quantity of HALON;
  • In the case of Parallel Registration in a foreign register, a Certificate of Parallel Registration
    from the foreign registry;
  • Customs Clearance Certificate/ Confirmation from the Customs Department (where applicable);
  • In the case of pleasure craft under 24 metres:
      (i)     Declaration of Conformity in accordance with Directive 94/25/EC, as amended;
      (ii)    EC Type Examination Certificate from a Notifying Body;
      (iii)   Owner’s Manual (Craft);
      (iv)    Declaration of Conformity for the engine in accordance with Directive 94/25/EC, as amended.
  * In the case of an individual, this is replaced with the Identity Card or Passport.
  ** In the case of a corporation established in the European Union (EU) or the European Economic
     Area (EEA) or outside the EU and the EEA but controlled by citizens of the EU or EEA.
                                                                         CYPRUS GUIDE TO SHIPPING 27




If the vessel falls within the ambit of the Government Policy for the Registration of vessels under
the Cyprus flag then the additional requirements and/or conditions imposed therein must be
satisfied prior to her registration.

If the provisional registration will take place at a diplomatic mission or consular post of the Republic
of Cyprus abroad, some of the required documents can be deposited there, upon the Registrar’s
written instructions.

Upon receipt of the required documents, the Registrar of Cyprus Ships, or the consular officer of
the Republic as the case may be, will then proceed with the provisional registration of the vessel.


Completion of Provisional Registration
Provided that the relevant fees have been paid and all the necessary documentation has been
deposited either with the Registrar of Cyprus Ships or with any diplomatic mission or consular officer
of the Republic, the Registrar or the consular officer who has been instructed to carry out the ship’s
provisional registration, will proceed to:

• issue a Provisional Certificate of the Cyprus Registry (M.S. 5), which is valid for 6 months from
  the date of issue;
• issue a provisional radio licence;
• advise the vessel’s classification society that it may proceed with the survey and certification of
  the vessel on behalf of the Cypriot Government.

The shipowner must ensure that the ship does not leave the port where she is lying unless and until
she has been duly surveyed and certificated by her classification society on behalf of the Cypriot
Government.


Extension of Provisional Registration
A 3 month extension of the ship’s provisional registration may be obtained, provided the Provisional
Certificate of Cyprus Registry has not expired and the appropriate extension fees have been
paid. For this purpose an application has to be made by the local lawyer acting on behalf of the
registered owner to the Minister of Communications and Works through the Registrar of Cyprus
Ships, requesting the extension of the ship’s provisional registration.
28 CYPRUS GUIDE TO SHIPPING




  In the said application, the consular officer of the Republic to whom the Provisional Certificate of
  Cyprus Registry will be presented for extension should be stated. The Registrar of Cyprus Ships
  will consider the application and will proceed and instruct the consular officer indicated above to
  effect the necessary endorsement of the Provisional Certificate of the Cyprus Registry.


  B. Permanent Registration
  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.

  Application and Documentation
  The following documents must be submitted to the Registrar of Cyprus Ships in addition to the
  documents required for the provisional registration:

  • Certificate of Deletion (if not submitted during the provisional registration);
  • Certificate of Survey (M.S. 1) and International Tonnage Certificate (M.S. 12);
  • Ship’s Carving and Marking Note (M.S. 32);
  • The International Certificates from a recognized Classification Society in accordance with the
    relevant international maritime conventions in force (where applicable);
  • Safety Management Certificate (SMC) (where applicable);
  • Application for permanent registration in accordance with Section 9 of Law 45/63 as amended.

  If the vessel falls within the ambit of the Government Policy for the Registration of vessels under the
  Cyprus flag then the applicable requirements or conditions under which her registration has been
  approved should be complied with.

  Measurement of the Ship’s Tonnages and Ship’s Carving and Marking
  The Certificate of Survey and the Cyprus Tonnage Certificate or International Tonnage Certificate
  may be prepared by any one of the classification societies recognised by the Cypriot Government or
  by the Department of Merchant Shipping.

  After receipt of the aforementioned forms, the Registrar of Cyprus Ships allots to the ship her official
  number (which for ships over 100 GT is identical to the IMO number) and issues the ship’s carving
  and marking note which is given to the owner. The owner should ensure that his ship is marked in
  accordance with the requirements of section 8 of the Merchant Shipping (Registration of Ships,
  Sales and Mortgages) Law, 45/63 as amended.

  The owner must then ask a surveyor of ships (surveyors of any of the recognised and authorized
  classification societies or of the Department of Merchant Shipping) to inspect the ship’s carving
  and marking. When the surveyor is satisfied that these have been made in accordance with the
  requirements of the aforesaid section, he will complete and sign the lower part of the note, verifying
  that these have been carried out and return it to the owner.

  The owner should forward the duly verified Ship’s Carving and Marking Note to the Registrar of
  Cyprus Ships in order to enable him to proceed with the permanent registration of the vessel.
                                                                           CYPRUS GUIDE TO SHIPPING 29




Certificate of Cyprus Registry
After receipt of all the documents set out in the previous section, and provided the appropriate fees
have been paid, the Registrar of Cyprus Ships will proceed with the permanent registration of the
vessel and the issue of the Certificate of Cyprus Registry (M.S. 4 or M.S. 4B).


C. Parallel Registration

Options
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. These two options offer some very interesting opportunities for
leaseback, hire purchase and finance arrangements.

The administrative practice of the Department of Merchant Shipping has confirmed that the parallel
(bareboat) registration of vessels under the Cyprus regime may be effected with more than 20 states
whose legislation is compatible with Cypriot legislation.

C.1. Parallel-in Registration
This form of registration offers the possibility to a foreign flag vessel on bareboat charter to a person
(legal or physical, qualified to own a Cyprus vessel) to be registered in ‘parallel’ under the Cyprus
flag for a period, usually 2 years, which is renewable.

Under this type of registration, the deletion of the registration in the foreign register is not required,
but the foreign nationality is suspended and the foreign registry is operative only with respect to the
ownership and encumbrance’s status of the ship.

The law of the country of the foreign registry must allow the parallel registration of the ships
registered in its register.

Age Limit
The Government policy on the age limit of vessels which may be registered in the Register of Cyprus
Ships is applicable to the parallel-in registration of vessels (see Chapter 4.2).
30 CYPRUS GUIDE TO SHIPPING




  Application and Documentation
  The application for the parallel-in registration of a vessel is submitted by the bareboat charterer
  who must be a person (legal or physical) qualified to own a Cyprus ship under the Cypriot merchant
  shipping legislation (see relevant section on Registration of Ships). The following documents (duly
  executed, where applicable) must be submitted to the Registrar of Cyprus Ships for this purpose:
  • application for parallel-in registration by a local lawyer acting on behalf of the bareboat
    charterer, to the Minister of Communications and Works through the Registrar of Cyprus Ships,
    requesting the parallel registration of the vessel in the Register of Cyprus Ships;
  • memorandum and articles of association of the company (bareboat charterer);
  • certificates of incorporation, directors and secretary, shareholders and registered office of the
    bareboat charterer;
  • Resolutions of Directors of the company resolving to bareboat charter the vessel and register
    her parallel-in in the Special Book of Parallel Registration;
  • Power of attorney authorising the person who will sign all the necessary documents in relation
    to the parallel registration;
  • Appointment of Authorised Representative (M.S. 57)*;
  • Tonnage Certificate of the vessel;
  • certified copy of the bareboat charter party;
  • certified written consent of the owner for the parallel-in registration;
  • certified written consent of the mortgagees, if any;
  • written consent of the foreign register with an official translation;
  • certificate of encumbrances from the foreign register;
  • Registration Form of a Mobile Maritime Radio Station (M.S. 34);
  • Registration Form of SAR particulars (M.S. 45) (where applicable);
  • Confirmation of Radio Traffic Accounting Authority (where applicable);
  • Confirmation of Vessel’s Classification Society (where applicable);
  • Form ISPS C1 (Circular No. 18/2003) (where the International Ship and Port Facility Security
    Code is applicable);
    Continuous Synopsis Record (C.S.R.) (where applicable). The deletion CSR must be forwarded
    within three (3) months in the case of ships coming from a foreign registry.
  *   In the case of a corporation established in the European Union or the European Economic Area.
                                                                          CYPRUS GUIDE TO SHIPPING 31




Tonnage and Name of the Vessel
For the parallel-in registration, a new measurement of the tonnage of the vessel is not required.

The Certificate of Survey and the Tonnage Certificate are issued on the basis of the corresponding
documents of the foreign registry. Ships registered parallel-in may keep the name of the foreign
registry, but this name must not be the same as the name of a ship already registered in the Register
of Cyprus Ships. Ships registered parallel-in may change their name under the same conditions
as those applicable to Cyprus ships registered provisionally or permanently. In such cases, the
application must be made by the bareboat charterer with the written consent of the shipowner and
of the mortgagees and the submission of the Master’s confirmation as to the change of name. The
change of name must be notified to the foreign registry.
Certificate of Cyprus Registry
After receipt of all the documents set out above and provided the appropriate fees have been paid,
the Registrar of Cyprus Ships will proceed with the parallel-in registration of the vessel in the Special
Book of Parallel Registration of the Cyprus Register and the issue of the Certificate of Cyprus Registry
(Form M.S. 4A).

Status of Vessels Registered Parallel-in
Vessels registered parallel-in in the Register of Cyprus Ships must hoist the Cyprus flag and are not
allowed to use the flag of the country of the foreign registry. The port of registry marked on the stern
of the ship must be LIMASSOL and not that of the foreign registry.

The transfer of ownership of a vessel registered parallel-in in the Special Book of Parallel Registration
of the Cyprus Register is effected in accordance with the law of the foreign register and not in
accordance with the provisions of the Cypriot merchant shipping legislation. The transfer of
ownership is only notified to the Registrar of Cyprus Ships who will make the necessary changes in
the Certificate of Cyprus Registry. Mortgages are created only by the shipowner, and in accordance
with the law of the country of foreign register in which they shall be recorded. The constitution of
such mortgages and other encumbrances is only notified to the Registrar of Cyprus Ships. Except
for matters relating to the transfer of ownership and mortgages and other encumbrances, all other
matters in relation to vessels registered parallel-in in the Register of Cyprus Ships are governed by
the Merchant Shipping (Registration of Ships, Sales and Mortgages) Law, 45/63 as amended.

The extension of the status of the parallel registration and the registration of the vessel parallel-in
is allowed, so long as the prerequisite conditions according to the law applicable at the time of the
initial registration continue to apply.

Termination of Parallel-in Registration
The termination of the status of a vessel registered parallel-in is effected in the following cases:
• where the foreign registry revokes its consent for the parallel-in registration in the Register of
  Cyprus Ships;
• in case of termination of the bareboat charter;
• upon the lapse of the period of time for which the Minister of Communications and Works has
  approved the parallel-in registration of the vessel;
• if there exists any reason for deletion which, under the Cypriot merchant shipping legislation,
  applies in cases of ships provisionally or permanently registered in the Register of Cyprus Ships.

Upon such a termination the vessel is deleted from the Special Book of Parallel Registration of the
Cyprus Register.
32 CYPRUS GUIDE TO SHIPPING




  C.2. Parallel-out Registration

  Under the Merchant Shipping (Registration of Ships, Sales and Mortgages) Law, 45/63 as amended,
  Cyprus ships may be bareboat chartered to a foreign person or company and registered ‘parallel-
  out’ in a foreign register for the duration of the charter party. This so called ‘Parallel-out’ registration
  allows the financing of a ship and her mortgaging under the Cyprus flag and her registration in a
  foreign registry through a bareboat charter arrangement.

  The parallel-out registration of a Cyprus ship is possible if she is bareboat chartered to a foreign
  individual or corporation and the law of the country of the foreign registry allows the parallel
  registration of vessels of another registry, under prerequisite conditions similar to those set out for
  the parallel-in registration of ships in the Register of Cyprus Ships.

  This type of registration is possible for Cyprus ships which are provisionally or permanently
  registered in the Register of Cyprus Ships. The parallel-out registration of a Cyprus ship must be
  approved by the Minister of Communications and Works.

  Application and Documentation
  The application for the parallel-out registration of a Cyprus vessel is effected by her owner. The
  following documents duly executed (where applicable) must be submitted to the Registrar of Cyprus
  Ships for this purpose:

  • application for parallel-out registration by a local lawyer acting on behalf of the registered
    owner, to the Minister of Communications and Works through the Registrar of Cyprus Ships,
    requesting the parallel-out registration of the vessel;
  • resolutions of the directors of the shipowning company resolving to bareboat charter the ship;
  • power of attorney if a third person is signing the bareboat charter party on behalf of the owners;
  • certified copy of the bareboat charter party;
  • certified written consent of the bareboat charterer for the parallel-out registration;
  • original certificate of Cyprus Registry;
  • written consent of the foreign registry confirming also that the law of the country allows the
    parallel registration of the Cyprus ship in its register with an official translation;
  • certified written consent of the mortgagees, if any;
  • confirmation from a recognised radio traffic accounting authority that they will continue to settle
    the vessel’s radiomaritime accounts;
  • common declaration by the shipowner and charterer that they undertake to produce to the
    Registrar within one month, a certified copy of the foreign certificate of parallel registration
    and to notify every alteration which takes place regarding the name or other particulars of the
    ship, during the period the status of parallel registration of the ship in the foreign register is
    in force.
                                                                         CYPRUS GUIDE TO SHIPPING 33




                                          Approval of Parallel-out Registration
                                          Provided that the appropriate fees have been paid and all
                                          the necessary documentation has been deposited with the
                                          Registrar of Cyprus Ships, the Minister of Communications
                                          and Works may allow the parallel-out registration of the
                                          vessel for a period not greater than 3 years. Such a period
                                          is renewable if the conditions imposed on first registration
                                          continue to apply. Upon the approval by the Minister of the
parallel-out registration of the vessel, the Cypriot nationality of the vessel is suspended and the
Cyprus Certificate of Registration must be delivered to the Registrar of Cyprus Ships.

Status of Vessels Registered Parallel-out
Cyprus vessels registered parallel-out must hoist the flag of the foreign registry and cannot use the
Cyprus flag. Also, the port of registry marked on the stern of the vessel must be that of the foreign
registry.

Transfers of ownership and any transactions affecting mortgages (i.e. creation, registration, transfer
and discharge) on Cyprus ships registered parallel-out are exclusively governed by Cypriot legislation
and no action in relation to these matters may be taken by the foreign registry.

Entries made in the Register of Cyprus Ships regarding transfers of ownership or mortgages on
Cyprus ships registered parallel-out, are only notified by the Registrar of Cyprus Ships to the
foreign registry.

Termination of Parallel-out Registration
The status of the vessels registered parallel-out continues to be in force for the duration of the
charter party, if the approval of the Minister and the consent of the foreign registry are in force, but
in any case for a period not greater than 3 years, unless it is renewed. The Certificate of Cyprus
Registry is returned to the shipowner as soon as the parallel-out registration is terminated.
34 CYPRUS GUIDE TO SHIPPING




  4.5. Registry Transactions and Mortgages

  The Register of Cyprus Ships
  Transfers and transmissions of ownership, as well as registrations, discharges, transfers and
  transmissions of mortgages, must be recorded in the Register of Cyprus Ships. The relevant
  application must be submitted to the Registrar and the relevant documents may be deposited with
  the Registrar or a consular officer on the instructions of the Registrar.

  Change of Ship’s Name
  A change of the ship’s name may be effected by submitting an application to the Registrar. When the
  change of name is approved, a period of 3 days must lapse from the date of application before the
  new name can be marked on the ship and the ship’s documents be endorsed to this end. It should
  be noted that no two ships registered under the Cyprus flag may have either the same or closely
  similar names.

  Deletion
  A Cyprus ship must be deleted from the Register of Cyprus Ships as soon as the ownership is
  transferred to a person (legal or natural) not qualified to own a Cyprus ship under the merchant
  shipping legislation.

  In the alternative, a Cyprus ship may be deleted from the Registry upon the submission of an
  application by the owner of the ship in order for the same to be registered in a foreign registry.

  No export license is required for the deletion of a vessel from the Register of Cyprus Ships. A deletion
  certificate or a Closed Transcript of Registry is issued as soon as the registered mortgages and
  other encumbrances are discharged and all matters pending with the Registry, including financial
  obligations, are settled.

  Mortgages
  Once a ship has been registered under the Cyprus flag, a mortgage can be created thereby securing
  a loan or other financial obligations on conditions agreed to by the parties, without the need for
  exchange control permission. The creation of a mortgage under Cypriot laws is not allowed on
  vessels registered parallel-in in the Register of Cyprus Ships.

  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 time 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.
  Transfer of a mortgage may be effected by completing the statutory form of transfer and submitting
  it to the Registrar of Cyprus Ships or to a consular officer.

  In order to discharge a mortgage, a memorandum of discharge will need to be duly executed by
  the mortgagee. It will then have to be attested and delivered to the Registrar of Cyprus Ships or a
  consular officer on the instructions of the Registrar.
CYPRUS GUIDE TO SHIPPING 35
36 CYPRUS GUIDE TO SHIPPING




  Chapter 5                                  5.1 Fees and Dues regarding Cyprus Ships
                                             Registration Fees
                                             Although Cyprus has much to offer in terms of infrastructure
                                             and maritime administration ultimately the bottom line is
                                             costs. In terms of registration fees and taxes, Cyprus is
  Fees                                       considered to be among the most competitive shipping

  and Taxes                                  centres in the world. The fees listed below are lower than
                                             those of Cyprus’s main competitors.

  The fees are expressed in EURO
  The registration fees are calculated as follows:

  FOR VESSELS OTHER THAN PASSENGER SHIPS

                                                                                             EURO
      For each gross unit up to 5.000                                                       0,170860
      For each additional gross unit between 5.001-10.000                                   0,136688
      For each additional gross unit over 10.000                                            0,068344
  The minimum fee is EURO 213,58 and the maximum fee is EURO 5.125,80



  FOR PASSENGER SHIPS

                                                                                             EURO
      For each gross unit                                                                   0,256290
  The minimum fee is EURO 427,15

  Cyprus Registry Maintenance Annual Fee
  An annual fee in the amount of EURO 300,00 is payable by the registered owner of every Cyprus
  ship. This fee is payable in advance on registration of the ship in Cyprus Register and for subsequent
  years shall be payable together with the tonnage tax of the ship (see Chapter 5.2) on 31st March of
  each year.

  The annual fee is not refundable in case the ship is deleted from the Cyprus Register before the
  lapse of the year for which the annual fee was paid.

  Fees for the Recording, Transfer, Transmission or Discharge of Mortgages
  A. For the recording or transfer of a mortgage the fees payable are calculated as follows:

                                                                                             EURO
      For each gross unit up to 10.000                                                      0,034172
      For each additional gross unit over 10.000                                            0,017086
  The minimum fee is EURO 51,26
                                                                            CYPRUS GUIDE TO SHIPPING 37




B. Transmission of a mortgage:

                                                                                               EURO
    Fees                                                                                       85,43

C. No fee is payable for the discharge of mortgages.

Fees for the Transfer or Transmission of Ships
For the transfer or transmission of a ship, the fees payable are calculated as follows:

                                                                                               EURO
    For each gross unit up to 10.000                                                         0,034172
    For each additional gross unit over 10.000                                               0,017086
The minimum fee is EURO 51,26


Deletion of a Ship from the Register of Cyprus Ships
No fee is payable for the deletion of ships. However, all other statutory fees and taxes due or in
arrears at the time of the ship’s deletion should be paid.

Other Fees

                                                                                               EURO
    Examination of an application for the
    registration of a vessel in the Register of Cyprus Ships                                   34,17
    Examination of an application for change of the vessel’s name                              34,17
    Approval and change of the vessel’s name                                                   136,69
    Issue or replacement of a provisional,
    permanent or parallel certificate of registration                                          17,09
    Granting of ship’s carving and marking note                                                17,09
    Issue of transcript of registry                                                            25,63
    Radio licence installation                                                                 17,09
    Radio licence renewal                                                                      17,09
    Issue of Continuous Synopsis Record                                                        34,17
    Safe Manning Certificate                                                                   42,72
    Issue of a Certificate under the 1992 Civil Liability Oil
    Pollution Damage Convention (CLC Certificate)                                              51,26
    Issue of a Certificate under the 2001 Bunkers Convention (Bunkers Certificate)             51,26
    Re-inspection of a ship after detention (Port State Control)                               683,44

For various other services or for the issue of certain certificates for which minor fees are also payable,
please refer to the First Schedule of the repealed Merchant Shipping (Fees and Taxing Provisions)
Laws, 1992-2007 (Law 38(I)/1992 as amended), which is still in force until its full repeal and replacement.
38 CYPRUS GUIDE TO SHIPPING




  5.2. Taxation of Cyprus Ships
  On 24th March 2010 the European Commission approved the new Tonnage Tax System for Cyprus
  merchant shipping. The new Tonnage Tax System (Law 44(I)/2010) is applicable as from the fiscal
  year 2010 (for more information see Chapter 7).

  Under the new Tonnage Tax System, qualifying owners of Cyprus ships are not liable to pay tax
  under the provisions of the Income Tax Law in force, but are subject to an annual tax referred to as
  tonnage tax, which is calculated on the basis of the net tonnage of the ships they own as prescribed
  in the table below.

                                                   NET TONNAGE
        0 - 1.000            1.001 - 10.000          10.001 - 25.000         25.001 - 40.000    > 40.000

        € 36,50                 € 31,03                 € 20,08                    € 12,78       € 7,30
       per 100 NT              per 100 NT              per 100 NT                 per 100 NT   per 100 NT

  Sample calculation of the annual tonnage tax for a 19.538 net tonnage vessel:
  1.000 NT : 1.000/100 = 10           x   €36,50    = €365,00
  9.000 NT : 9.000/100 = 90           x   €31,03    = €2.792,70
  9.500 NT : 9.500/100 = 95           x   €20,08    = €1.907,60
     38 NT :    38/100 = 0,38         x   €20,08    =     €7,63

  Annual tonnage tax due                            = €5.072,93


  Eligibility Requirements
  Eligible for the Tonnage Tax System is an Owner of a Cyprus ship, that is a qualifying ship engaged in
  a qualifying shipping activity.

  Qualifying ship:
  Is any seagoing vessel certificated under the applicable international or national rules and
  regulations and registered in the Cyprus Register.
  The new tonnage tax system specifically excludes certain types of ships such as:

  • Fishing and fish factory vessels;
  • Vessels used primarily for sport or recreation;
  • Inland Waterway navigation vessels;
  • Harbour, estuary and river ferries and tug boats;
  • Fixed Offshore Installations (not used for maritime transport);
  • Non self-propelled Floating Cranes;
  • Floating Hotels, Restaurants, Casinos.

  Qualifying shipping activity:
  Any commercial activity that constitutes maritime transport is considered a qualifying shipping activity.
  The definition of maritime transport includes the traditional carriage of goods and passengers, by sea,
  outside the territorial waters of Cyprus, including Towage & Dredging activities (under Conditions)
  and Cable-Laying activities.
                                                                           CYPRUS GUIDE TO SHIPPING 39




The definition of maritime transport includes also ancillary activities to maritime transport such as all
hotel, catering, entertainment and retailing activities on board a qualifying ship, as well as the loading
and unloading of cargo, the operation of ticketing facilities and passenger terminals.

Owners who do not qualify shall be liable to pay tax in accordance with the provisions of the Income
Tax Laws in force.


Exemption from Income Tax of a Qualifying Owner
Notwithstanding the provisions of the Income Tax Laws (Law 118 (I) of 2002 as amended) or any
other Law in force in the Republic, no tax shall be charged, levied or collected upon the:

• Income derived from the operation of a qualifying ship in a qualifying shipping activity;
• Profit dividends paid to shareholders directly or indirectly
  • from the operation of a qualifying ship, or
  • from the sale of a qualifying ship;
• Bank Interest earned on working capital or shipping revenue (provided said working capital or
  shipping revenue is used to pay expenses for the financing and/or operation and/or maintenance
  of ship);
• Income or Profit from the sale of a qualifying ship or from the sale of any shares in a qualifying
  owner entity that is the owner of a qualifying ship.

Terms of Payment
The tonnage tax is payable on 31st March each year. In case of deletion of a ship before this date
the tonnage tax is payable on the date of deletion.

Late payment results in an additional annual fee of ten percent (10%) on the chargeable and leviable
amount of tonnage tax for every year of the delay or part thereof, until the final discharge of the
chargeable and leviable tax.

In case of deletion of the ship from the Cyprus Register before the expiration of the year for which
tonnage tax has been paid for, the amount paid in excess shall not be reimbursed to the owner.
40 CYPRUS GUIDE TO SHIPPING




  Reduction of Tonnage Tax
  Reduction of the tonnage tax is granted in the cases listed below:

  LAID-UP SHIPS
  If the ship is laid up for a period of at least 3 consecutive months the tonnage tax payable is reduced
  by 75 % for the period during which the vessel is laid-up, provided that the Department of Merchant
  Shipping is duly notified not later than 3 months from the commencement of the lay-up period.

  INOPERATIVE SHIPS
  If the ship is rendered inoperative for a period of at least three months due to its judicial arrest, or
  by act of piracy, or armed robbery, or by force majeure, then the tonnage tax payable is reduced by
  75 % for the period during which the vessel is inoperative.

  Fees and Taxes Payable on Provisional Registration
  The following fees and taxes are payable at the time of the provisional registration of a vessel:

  • registration fees;
  • tonnage tax for 6 months;
  • fees for obtaining a licence to install and operate a wireless telegraphy and/or telephony station;
  • fee for the issue of the provisional certificate of Cyprus Registry;
  • fees for the issue of any other certificates requested (i.e. Safe Manning Certificate, Bunkers
    Certificate etc).
  These should be paid not later than the date on which the provisional registration of the vessel will
  be effected.

  Fees and Taxes Payable for the Extension of the Period of Provisional Registration
  For extending the period of the provisional registration of a vessel under the Cyprus flag for a
  maximum period of 3 months, the following fees and taxes are payable:

  • one half of the registration fees;
  • tonnage tax for 3 months.
  These should be paid prior to the expiry date of the period of provisional registration.
                                                                               CYPRUS GUIDE TO SHIPPING 41




Fees and Taxes Payable on Permanent Registration
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, then no other fees and taxes are levied for
the permanent registration of a vessel apart from:

• fee for the issue of the certificate of Cyprus Registry;
• payment of any other statutory fees and taxes due or in arrears at the time of the permanent
  registration of the vessel.

No other fee is payable if the permanent registration takes place before the expiry of the provisional
registration period. Otherwise the fees payable on provisional registration are payable anew.

In case of a direct permanent registration of the ship, there shall be charged, levied and collected
the tonnage tax corresponding to the non-expired part of the year, during which the permanent
registration of the ship takes place.

Fees and Taxes Payable on Parallel (Bareboat) Registration
The initial registration fees for the parallel registration of a foreign vessel under the Cyprus flag (parallel-
in registration) are 20 % higher than those applicable to the provisional or permanent registration of
the vessel. If the foreign vessel under the Cyprus flag is deleted and thereafter re-registered and the
chartering is effected to the benefit of the same charterer prior to the deletion, the re-registration fees
are reduced by 50%. There is no increase in the tonnage tax or other dues payable and the vessel is
subject to the same financial obligations as other Cyprus ships.


A Cyprus ship registered in parallel in a foreign register (parallel-out registration) has the same
financial obligations as all other Cyprus ships, with the exception of the fees for the issue or renewal
of the radio licence. If the vessel is deleted from the Cyprus Registry prior to the termination of her
status of parallel-out registration, the fraction of the tonnage tax which is proportional to the period
from her deletion until the termination of her status of parallel registration is not reimbursed.

The financial obligations of ships registered in parallel are payable in advance for the entire period
of the parallel (bareboat) registration and are not reimbursed even if the parallel registration is
terminated earlier.

Fees and Taxes Payable Annually
The following fees and taxes are payable each year:


• Cyprus Registry Maintenance Annual Fee;
• tonnage tax;
• fees for the renewal of the licence to install and operate a wireless telegraphy and/or telephony
  station.
42 CYPRUS GUIDE TO SHIPPING




  Chapter 6                               Legislation

  Training,                               The training, certification and manning of Cyprus flag
                                          vessels are mainly regulated by the following legislation:
  Certification                           • Merchant Shipping (Masters and Seamen) Laws,
  & Registration                            1963 to 2002 [Part II - Composition of Personnel
                                            of a Ship (Safe Manning) - Certificates of Maritime
  of Seafarers                              Competency];
  • International Convention on Standards of Training, Certification and Watchkeeping for Seafarers,
    1978 and 1995 (Ratification) and for Matters Connected Therewith Laws, 1985 and 1998;
  • Merchant Shipping (Safe Manning, Hours of Work and Watchkeeping) Law of 2000
    (Law 105(I)/2000 as amended);
  • Merchant Shipping (Criminal and Disciplinary Liability of Seafarers, Suspension or Cancellation
    of Certificates) Law of 2000 (Law 106(I)/2000 as amended);
  • Merchant Shipping (Medical Examination of Seafarers and Issue of Certificates) Law of 2000
    (Law 107(I)/2000);
  • Merchant Shipping (Registration of Seafarers and Seafarers Registry) Law of 2000
    (Law 108(I)/2000);
  • Merchant Shipping (Issue and Recognition of Certificates and Marine Training) Law 2008
    (Law 27(I)/2008);
  • Merchant Shipping (Official Logbooks, Ship’s Articles and Six Month List) Regulations 2001
    (P.I. 297/2001).

  Over the years a number of circulars were issued by the Department of Merchant Shipping to help
  the industry to conform to the above mentioned legislation. The major circulars are listed on our
  website: www.shipping.gov.cy under the section «Training and Certification».

  Under the Merchant Shipping (Masters and Seamen) Laws 1963-2002, the master of a Cyprus ship
  is required to enter into an employment agreement with the shipowner. Furthermore, every seaman
  on board must enter into an agreement with the master.

  Certificates of Competency for Officers and Ratings
  Officers and ratings serving on board Cyprus flag vessels are not required to hold certificates
  of competency issued by the Government of the Republic of Cyprus, however they must hold
  valid and recognized certificates of competency for the post they hold on board. Officers serving
  on board Cyprus flag vessels are required to hold, in addition to their non-Cyprus certificate of
  competency, a Cyprus endorsement attesting the recognition of their certificate in accordance
  with the STCW 1978 Convention as amended.

  A list of States whose certificates of competency are presently recognized by Cyprus is found in
  Appendix 8. This list is updated regularly. Thus, kindly visit our website for the latest list.

  As mentioned in Chapter 4, Registration of Ships, passenger ships, high speed passenger ships, cargo
  ships and high speed cargo ships engaged on international voyages, including short international
  voyages, should engage for sea training cadets who are permanent residents of the Republic of
  Cyprus, if requested by the Director.
                                                                       CYPRUS GUIDE TO SHIPPING 43




Seafarer’s Identification and Sea-Service Record Book
All registered seamen shall apply for a Seafarer’s Identification and Sea Service Record Book (SISRB)
which is issued by the Department of Merchant Shipping.
The Seafarer’s Identification and Sea Service Record Book is valid for a period of ten years from the
date of its issue, after which a new one is issued by the Department of Merchant Shipping.
The engagement and discharge of the seafarer, as well as the entries relating to the training of
familiarization with the ship, are made and signed by the Master.


Nationality of Crew
Crew members may be of any nationality provided they are holders of certificates of competency
issued by one of the countries on the IMO white List. Officers 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 recognized and have also applied for Cyprus endorsement of their
certificates of competency in accordance with the STCW 1978 Convention as amended.

In order to facilitate the manning of ships flying its flag, the Cypriot Government has concluded a
number of bilateral agreements in the field of merchant shipping with labour supplying countries (see
Chapter 8, International Relations).

    FEES AND TAXES                                                                       EURO
    Seafarers Identification and Sea Service Record Book                                  51,26
    Endorsement Attesting the Recognition of a Non Cyprus Certificate                     34,17
    Cyprus Certificate of Competency                                                      51,26

For the period ending 31st December 2019, no income tax is charged levied or collected upon the
salary or other benefits from the employment of the master, the officers and other crew members of
a qualifying Cyprus ship, engaged in a qualifying shipping activity.
44 CYPRUS GUIDE TO SHIPPING




  Chapter 7                                 The new tonnage tax system for Cyprus merchant shipping
                                            was approved by the European Commission on 24th March
                                            2010, as compatible with the requirements of the EU
                                            acquis, in accordance with the relevant guidelines on State
  The Cyprus                                Aid to Maritime Transport.

  Tonnage                                 The new system is applicable as from the fiscal year

  Tax System                              2010. Full text of the Law (Law 44(I)/2010) in an English
                                          unofficial translation and all the subsidiary legislation issued
  thereunder are available on our website www.shipping.gov.cy

  The main provisions of the new tonnage tax system are described below.

  Beneficiaries
  The tonnage tax system is available to any owner, charterer or ship manager who owns, charters or
  manages a qualifying ship in a qualifying shipping activity. The tonnage tax is calculated on the net
  tonnage of the ship according to a broad range of bands and rates prescribed in the legislation. The
  rates applicable to ship managers are 25% of those applied for ship owners and charterers.

  Qualifying ship
  A qualifying ship is any seagoing vessel certified under applicable international or national rules
  and regulations and registered in the ship register of any member of the International Maritime
  Organization and the International Labour Organization, which is recognised by Cyprus.

  The new tonnage tax system specifically excludes certain types of ships, such as fishing vessels,
  ships used primarily for sports or recreation, river vessels, non-self propelled floating cranes and
  non-ocean going tug boats, among others.

  Qualifying shipping activity
  Any commercial activity that constitutes maritime transport, crew management and/or technical
  management is considered a qualifying activity.

  The definition of maritime transport includes the traditional carriage of goods and passengers, as
  well as ancillary services such as all hotel, catering, entertainment and retailing activities on board
  a qualifying vessel, the loading and unloading of cargo, the operation of ticketing facilities and
  passenger terminals. Towage, dredging and cable laying are also eligible for tonnage tax.

  Ship owners
  Ship owners of Cyprus flag ships automatically fall within the scope of the tonnage tax system (see
  Chapter 5.2 above).

  Ship owners of foreign flag ships may opt to be taxed under the tonnage system. They must comply
  with certain requirements, such as the requirement that a share of their fleet be comprised of EU flag
  ships, which share must not be reduced in the three-year period following the exercise of the option
  (flag-share requirement) and that the commercial and strategic management of the fleet be carried
  out from the EU/European Economic Area.
                                                                         CYPRUS GUIDE TO SHIPPING 45




                                         Any ship owner opting for the tonnage tax system must
                                         remain in the system for 10 years. Early withdrawal will
                                         result in penalties, calculated as the difference between the
                                         amount paid during the period the ship owner was under the
                                         tonnage tax system and the amount that would have paid
                                         had it been subject to corporation tax in the same period. In
                                         addition, the ship owner will lose the right to opt for tonnage
                                         taxation until expiration of the 10-year period from the date
                                         the option was first exercised.

The tonnage tax system covers profits from shipping operations, dividends paid directly or indirectly
out of such profits, profits on the sale of the ship and interest earned on funds used as working
capital or for the financing, operation and/or maintenance of the ship.

Charterers
Any charterer who charters a ship under bareboat, demise, time or voyage charter is eligible for the
tonnage tax system provided the tonnage of the ships under time and/or voyage charters do not
exceed 75% of the total tonnage of ships chartered and owned, for more than three consecutive
years. This eligibility percentage increases to 90% if the ships chartered are EU/EEA ships or
their crew and technical management are carried out from the EU/EEA. The charterers of a fleet
comprising EU and non-EU flag ships must also comply with the flag-share requirement.

An eligible charterer may opt to be taxed under the tonnage tax system, but once the option is made,
it must remain in the system for 10 years. Early withdrawal will result in the penalties outlined above
for ship owners.

The tonnage tax system covers profits from shipping operations, dividends paid directly or indirectly
out of such profits and interest earned on funds used as working capital or for the payment of
expenses arising out of the charter party.

Ship managers
A ship manager who provides crew and/or technical ship management services is eligible for
the tonnage tax system provided it satisfies certain criteria. These include the maintenance of a
fully fledged office in Cyprus, the employment of a sufficient number of qualified personnel
46 CYPRUS GUIDE TO SHIPPING




  (51% of whom should be EU/EEA citizens) and at least 2/3 of the management is carried out from
  the territory of the EU/EEA. Further, a share of his fleet must be comprised of EU flag ships, which
  share must not be reduced in the three-year period following the exercise of the option (flag-share
  requirement). All ships and crews under management must comply with relevant international
  standards and EU law requirements must be fulfilled, in particular those relating to maritime
  security, safety, training and certification of seafarers, environmental performance and on-board
  working conditions.

  Other specific criteria must be complied with, depending on the ship management service provided
  (i.e. full implementation of the 2006 Maritime Labour Convention for crew managers and the ISM Code
  certification for technical managers).

  The tonnage tax system covers profits from the provision of crew and/or technical ship
  management services, dividends paid directly or indirectly out of such profits and interest earned
  on funds used as working capital or for the payment of expenses relating to the management of
  the ships. The 10-year option rule also applies to eligible ship managers and the same penalties
  apply for early withdrawal.

  Tonnage Tax Rates
  The following table summarises the applicable rates for the tonnage tax calculation:

                                              NET TONNAGE
        0 - 1.000          1.001 - 10.000      10.001 - 25.000    25.001 - 40.000         > 40.000
        € 36,50              € 31,03              € 20,08            € 12,78               € 7,30
       per 100 NT           per 100 NT           per 100 NT         per 100 NT           per 100 NT

  Note: The rates applicable to ship managers are 25% of the above.
  Sample calculation of the annual tonnage tax for a 19.538 net tonnage vessel:

  1.000 NT : 1.000/100 = 10      x   €36,50    = €365,00
  9.000 NT : 9.000/100 = 90      x   €31,03    = €2.792,70
  9.500 NT : 9.500/100 = 95      x   €20,08    = €1.907,60
     38 NT :    38/100 = 0,38    x   €20,08    =     €7,63
  Annual tonnage tax due                       = €5.072,93
                                                                       CYPRUS GUIDE TO SHIPPING 47




                                        The Republic of Cyprus is a member of many international
Chapter 8                               organisations including the European Union, the United
                                        Nations, the Council of Europe, the World Trade
                                        Organization, the Commonwealth, the World Bank, and the
                                        International Monetary Fund. Cyprus is represented through
                                        diplomatic missions in over 40 countries.
International                         Furthermore Cyprus participates actively in the different
Relations                             shipping related international fora such as the International
                                      Maritime Organization (IMO), the International Labour
Organization (ILO) and the European Maritime Safety Agency (EMSA).

Cyprus has concluded a number of Bilateral Agreements on Merchant Shipping and a number of
Double Tax Treaties.

Double Tax Treaties
Cyprus has concluded a number of treaties whose main purpose is the avoidance of double taxation
of income earned in any of the countries concerned.
The treaties also include articles on “non-discrimination”, “mutual agreement procedures” and
“exchange of information”.

A list of the countries with which Cyprus has concluded double tax treaties is found in Appendix 1.

Merchant Shipping Agreements
The aim of these agreements is to promote friendly relations between Cyprus and other countries,
explore areas of cooperation related to shipping which could benefit the economic development of
both countries, and facilitate seaborne trade and employment of seamen.

These agreements contain provisions for the employment on Cyprus ships of properly qualified
seamen from these countries. The terms of employment of these seamen are those approved by the
competent authorities and / or seamen’s unions of their country and any disputes regarding these,
may be resolved exclusively by the competent courts or Authorities of either Cyprus or their country.

Cyprus signed a number of Bilateral Agreements on Merchant Shipping with a number of countries.
These are listed in Appendix 9.
48 CYPRUS GUIDE TO SHIPPING
                                              CYPRUS GUIDE TO SHIPPING 49




Chapter 9




Appendices
1. Double Tax Treaties

2. Inspectors of Cyprus Ships

3. International Conventions

4. Policy on Ship Registration

5. Classification Societies,
   Recognised Organisations and Recognised Security Organisations

6. Radio Traffic Accounting Authorities

7. Point of Service Activation

8. Certificates of Competency

9. Bilateral Αgreements
50 CYPRUS GUIDE TO SHIPPING




  Appendix 1                    Double Tax Treaties
          State                                 Date of Signature         Date of entry       Date of Publication in the Official Gazette
                                            Treaty/Protocol/ Note            into force             of the Republic (Number and date)
    1     Austria                                      20 Mar 1990         10 Nov 1990                               2500 27 Apr 1990
    2     Bulgaria                                      30 Oct 2000         3 Jan 2001                              3461 30 Dec 2000
    3     Belarus                                      29 May 1998         12 Feb 1999                                3273 9 Oct 1998
    4     Belgium                                      14 May 1996          8 Dec 1999                               3365 19 Nov 1999
    5     Canada                                        2 May 1984          3 Sep 1985                              2053 31 May 1985
    6     China                                         25 Oct 1990         5 Oct 1991                              2578 22 Feb 1991
    7     Denmark                                      26 May 1981         10 Aug 1981                                1704 17 Jul 1981
          Treaty Notes New Agreement                    11 Oct 2010        10 Apr 1982                              2034 24 Sep 1982
    8     Egypt                                        18 Dec 1993         14 Mar 1995                              2865 11 Mar 1994
    9     France                                       18 Dec 1981          1 Apr 1983                                 1468 9 Jul 1982
   10     Germany                                       9 May 1974         11 Oct 1977                               1199 27 Jun 1975
   11     Greece                                       30 Mar 1968         16 Jan 1969                               651 10 May 1968
   12     Hungary                                      30 Nov 1981         24 Nov 1982                                 862 7 May 1982
   13     India                                         13 Jun 1994        21 Dec 1994                                2921 4 Nov 1994
   14     Ireland                                       24 Sep1968          12 Jul 1970                              726 19 May 1969
   15     Italy                                         24 Apr 1974         9 Jun 1983                                1586 5 Sep 1980
          Treaty Protocol                                 7 Oct 1980                                                        4 Jun 1982
          (Additional Protocol)                           4 Jun 2009                                                  4125 4 Jun 2010
   16     Kuwait                                       15 Dec 1984          25 Sep 1986                              2026 18 Jan 1985
          (New Agreement)                                 5 Oct 2010
   17     Lebanon                                      18 Feb 2003          14 Apr 2005                              3976 8 Apr 2005
   18     Malta                                         22 Oct 1993         11 Aug 1994                             2860 25 Feb 1994
   19     Mauritius                                     21 Jan 2000         12 Jun 2000                              3410 2 Jun 2000
   20     Norway                                         2 May 1951          1 Jan 1955                                  11 Jun 1956
   21     Poland                                          4 Jun 1992          9 Jul 1993                             2735 4 Sep 1992
   22     Romania                                      16 Nov 1981           8 Nov 1982                             1757 26 Feb 1982
   23     Russia                                         5 Dec 1998         17 Aug 1999                             3306 26 Feb 1999
          (Amendment Protocol)                           7 Nov 2010
   24     South Africa                                 26 Nov 1997           8 Dec 1998                             3214 16 Jan 1998
   25     Sweden                                        22 Oct 1988         14 Nov 1989                             2377 20 Jan 1989
   26     Syria                                        15 Mar 1992          22 Feb 1995                              2863 4 Mar 1994
   27     Singapore                                    24 Nov 2000           8 Feb 2001                             3641 30 Dec 2000
   28     Thailand                                      27 Oct 1998          4 Apr 2000                             3394 17 Mar 2000
   29     United Kingdom                                20 Jun 1974          1 Nov 1974                               1107 5 Jul 1974
          Treaty Protocol                                 2 Apr 1980
   30     USA                                          19 Mar 1984          31 Dec 1985                              1944 4 Apr 1984
   31     Serbia*                                       29 Jun 1985          8 Sep 1986                             2073 23 Aug 1985
   32     Montenegro*                                   29 Jun 1985          5 Nov 2008                             2073 23 Aug 1985
   33     Slovenia*                                     29 Jun 1985          8 Sep 1986                             2073 23 Aug 1985
          (new agreement)                               12 Oct 2010
   34     Slovakia**                                    15 Apr 1980        30 Dec 1980                               1599 3 May 1980
   35     Czech Republic**                              15 Apr 1980        30 Dec 1980                               1599 3 May 1980
          (new agreement)                               28 Apr 2009        26 Nov 2009                              4114 13 Nov 2009
   36     Azerbaijan***                                 29 Oct 1982        26 Aug 1983                                   26 Nov 1982
   37     Armenia***                                    29 Oct 1982        26 Aug 1983                                   26 Nov 1982
   38     Kyrgyzstan***                                 29 Oct 1982        26 Aug 1983                                   26 Nov 1982
   39     Moldavia                                      28 Jan 2008        03 Sep 2008                              4098 29 Aug 2008
   40     Tanzikistan***                                29 Oct 1982        26 Aug 1983                                   26 Nov 1982
   41     Uzbekistan***                                 29 Oct 1982        26 Aug 1983                                   26 Nov 1982
   42     Ukraine***                                    29 Oct 1982        26 Aug 1983                                   26 Nov 1982
   43     Seychelles                                    28 Jun 2006         27 Oct 2006                                   25 Oct 2006
   44     San Marino                                    27 Apr 2007          18 Jul 2007                             4088 13 Jul 2007
   45     Qatar                                        11 Nov 2008          20 Mar 2009                             4099 14 Nov 2008

  Notes
  * The treaty between Cyprus and the Socialist Federal Republic of Yugoslavia is still in force.
  ** The treaty between Cyprus and the Czechoslovak Socialist Republic is still in force. The said treaty has ceased to apply between
      Cyprus and Chech Republic as from 1.1.2010, date of application of the provision of the new agreement.
  *** The treaty between Cyprus and the Union of Soviet Socialist Republics is still in force.
                                      CYPRUS GUIDE TO SHIPPING 51




Appendix 2        Inspectors of Cyprus Ships
      APPOINTED
      BY PORT:
 1    Brisbane, Australia                                 2
 2    Buenos Aires, Argentina                             2
 3    Durban, S.Africa                                    1
 4    Fremantle, Australia                                1
 5    Gdynia, Poland                                      1
 6    Houston, USA                                        1
 7    Kobe – Osaka, Japan                                 1
 8    La Coruna, Spain                                    1
 9    New Orleans, USA                                    1
 10   Paranagua, Brazil                                   1
 11   Quebec, Canada                                      1
 12   Singapore, Singapore                                1
 13   Vancouver, Canada                                   1

      TOTAL                                              15


      BY COUNTRY:
 1    Argentina                                           2
 2    Australia                                           3
 3    Brazil                                              1
 4    Canada                                              2
 5    Japan                                               1
 6    Poland                                              1
 7    Singapore                                           1
 8    South Africa                                        1
 9    Spain                                               1
 10   USA                                                 2

      Total                                              15



      APPOINTED
      No. of Inspectors                                  15
      No. of Ports                                       13
      No. of Countries                                   10
52 CYPRUS GUIDE TO SHIPPING




  Appendix 3              International Conventions
  International Conventions for which the International Maritime Organization performs
  Depository Functions and to which the Republic of Cyprus is a Contracting Party
  • International Convention for the Safety of Life at Sea, 1974 as amended (SOLAS 74 as amended)
  • Protocols to the International Convention for the Safety of Life at Sea, 1974, as amended (SOLAS PROT
    1978 as amended SOLAS PROT 1988)
  • Convention on the International Regulations for Preventing Collisions at Sea, 1972, as amended
    (COLREG 72 as amended)
  • International Convention for the Prevention of Pollution from Ships, 1973 as modified by the Protocol of
    1978 thereto (MARPOL 73/78 as amended) (Annexes I, II, IV, V, and VI)
  • International Convention on Load Lines, 1966 (LL 1966)
  • Protocol of 1988 relating to the International Convention on Load Lines, 1966 (LL PROT 1988)
  • International Convention on Tonnage Measurement of Ships, 1969 (TONNAGE 1969)
  • International Convention on Civil Liability for Oil Pollution Damage, 1969 (CLC 1969)
  • Protocols to the International Convention on Civil Liability for Oil Pollution Damage, 1969 (CLC PROT
    1976, CLC PROT 1992)
  • Special Trade Passenger Ships Agreement, 1971 (STP 1971)
  • Protocol on Space Requirements for Special Trade Passenger Ships, 1973 (SPACE STP 1973)
  • International Convention on the Establishment of an International Fund for Compensation for Oil Pollution
    Damage, 1971 (FUND 1971)
  • Protocols to the International Convention on the Establishment of an International Fund for
    Compensation for Oil Pollution Damage, 1971 (FUND PROT 1976, FUND PROT 1992)
  • International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW),
    1978 as amended
  • Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matters, 1972, as
    amended (LDC 1972)
  • Convention on the International Maritime Satellite Organization (INMARSAT) as amended (INMARSAT C)
  • Operating Agreement on the International Maritime Satellite Organization (INMARSAT) as amended
    (INMARSAT OA)
  • International Convention on Maritime Search and Rescue, 1979 (SAR 1979)
  • International Convention for Safe Containers, 1972 (CSC 1972)
  • Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation and its
    Protocol, 1988 (SUA 1988)
  • Convention on Facilitation of International Maritime Traffic of 1965 (FAL 65 as amended)
  • The International Convention on Liability and Compensation for Damage in Connection with the Carriage
    of Hazardous and Noxious Substances by Sea of 1996 (HNS)
  • The International Convention on Civil Liability for Bunker Oil Pollution Damage of 2001 (BUNKERS)
  • International Convention on the Control of Harmful Anti-Fouling Systems on Ships of 2001 (AFS)
  • Convention on Limitation of Liability for Maritime Claims of 1976 and its Protocol of 1996 (LLMC)

  International Maritime Labour Conventions for which the International Labour Organization
  performs Depository Functions and to which the Republic of Cyprus is a Contracting Party
  • Convention Concerning the Compulsory Medical Examination of Children and Young Persons Employed
    at Sea, 1992 (Convention No. 16)
  • 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) and the
    relevant Protocol
  • Convention Concerning Occupational and Health (Dock Work), 1979 (Convention No. 152)
                                                                                             CYPRUS GUIDE TO SHIPPING 53




Appendix 4                   Policy on Ship Registration
                                                                                  RELATED CONDITIONS

         TYPE OF SHIP                       MAXIMUM                ENTRY INSPECTION              ADDITIONAL INSPECTION
                                            AGE LIMIT                 REQUIRED                         REQUIRED


CARGO SHIPS AND CARGO                          Yes                          Yes
   HIGH SPEED CRAFT                         ≤ 25 years                 if ≥ 15 years                          No


    PASSENGER SHIPS AND                                                                                      Yes
   PASSENGER HIGH SPEED                                                     Yes                 if 2 years ≤ Age ≤ 10 years
     CRAFT ENGAGED ON                           No                     if ≥ 30 years                      Biennial
 INTERNATIONAL OR SHORT                                                                               if Age > 10 years
  INTERNATIONAL VOYAGES
                                                                                                           Annual

   PASSENGER SHIPS AND                                                                                       Yes
  PASSENGER HIGH SPEED                                                                          if 2 years ≤ Age ≤ 10 years
                                                                            Yes
    CRAFT ENGAGED ON                            No                                                        Biennial
 DOMESTIC VOYAGES WITHIN                                               if ≥ 25 years
 THE TERRITORY OF A STATE,                                                                            if Age > 10 years
    OTHER THAN CYPRUS                                                                                      Annual

   PASSENGER SHIPS AND                                                                                      No
  PASSENGER HIGH SPEED                                                      Yes                     In order to operate
    CRAFT ENGAGED ON                            No                     if ≥ 20 years              they are required to be
 DOMESTIC VOYAGES WITHIN                                                                          inspected and certified
 THE TERRITORY OF CYPRUS                                                                                  annually

      FISHING VESSELS*                         Yes                          Yes
                                            ≤ 25 years                 if ≥ 20 years                          No

   FLOATING PRODUCTION
   STORAGE OFFLOADING;
     FLOATING STORAGE                          Yes                          Yes
                                                                                                              No
    OFFLOADING VESSELS                      ≤ 25 years                 if ≥ 15 years
   AND MOBILE OFFSHORE
       DRILLING UNITS

                                                                                                             Yes
                                                                                                   if the ship is carrying
      SHIPS OF TYPES                                                                           industrial or special purpose
     OTHER THAN THOSE                          Yes                          Yes                   purpose personnel and
       LISTED ABOVE                         ≤ 35 years                 if ≥ 20 years
                                                                                                 2 years ≤ Age ≤ 10 years
                                                                                                           Biennial
                                                                                                       Age > 10 years
                                                                                                          Annual

  “Cargo ship” means a ship which has been constructed or adapted for the purpose of carrying cargo in any form.
  “Passenger ship” means a ship which has been constructed or adapted for the purpose of carrying fare-paying passengers.
* The Registrar will not consider applications for the registration of fishing vessels unless they are accompanied by an official
  communication from the Director of the Department of Fisheries and Marine Research of the Ministry of Agriculture, Natural
  Resources and the Environment, informing the Registrar of Cyprus ships that the registration of the fishing vessel in question is
  allowed. Additional requirements for registration are requested.
54 CYPRUS GUIDE TO SHIPPING




  Appendix 5              Classification Societies,
                          Recognised Organisations and
                          Recognised Security Organisations

  • American Bureau of Shipping (ABS)

  • Bureau Veritas (BV)

  • China Classification Society (CCS)

  • Det Norske Veritas (DNV)

  • Germanischer Lloyd (GL)

  • Korean Register of Shipping (KRS)

  • Lloyd’s Register of Shipping (LRS)

  • Nippon Kaiji Kyokai (NKK)

  • Polski Rejestr Statkόw (PRS)

  • Registro Italiano Navale (RINA)

  • Russian Maritime Register of Shipping (RS)
                                                               CYPRUS GUIDE TO SHIPPING 55




Appendix 6       Radio Traffic Accounting Authorities
AAIC             NAME
Code No
BE02             MARLINK S.A

DP02             MCG MARLINK COMMUNICATIONS GMBH

NL02             STICHTING MARLINK

US03             MARLINK INC

CY02             AZORES RADIO COMMUNICATIONS SERVICES LTD

CY03             TELACCOUNT OVERSEAS LTD

CY05             SATLINK (MARITIME SERVICES) LIMITED

CY06             CYPRUS TELECOMMUNICATIONS AUTHORITY

CY07             UNICOM MANAGEMENT SERVICES (CYPRUS) LIMITED

CY08             ONE NET LIMITED

CY09             NAPATEL LTD

DP03             VIZADA CUSTOMER CARE EMEA & ASIA

DP05             DH- INTERCOM GMBH & CO. KG

EE02             AS RSTA

GB01             A-N-D GROUP PLC

GB08             SELEX COMMUNICATIONS LTD

GB11             NSSL LIMITED

GR01/GR12        OTESAT - MARITEL

GR03             HECOSAR

GR05             HELLENIC RADIO SERVICES S.A.

GR14             NAVARINO TELECOM S.A.

IU03             COMPANIA GENERALE TELEMAR

JP03             KYORITSU RADIO SERVICE CO LTD

RS06             MARITIME COMMUNICATIONS SERVICES PTE LTD

SU04             V/O MORSVIAZSPUTNIK

US09/CAO3/GB14   STRATOS GLOBAL
56 CYPRUS GUIDE TO SHIPPING




  Appendix 7         Point of Service Activation (PSA)
   PSA                COMPANY
   CODE
   1431               Singapore Telecommunications Limited
   1510               Morsviazsputnik
   3001               Satlink Maritime Services Ltd
   3026               DH Intercom
   3035               Sait Communications S.A.
   3008               Hellenic Radio Services S.A.
   3004               Peninsular Electronics Ltd
   3000               Nera Satellite Services Limited
   1180               OTESAT SA
   3014               Marconi Mobile Limited
   3013               Marine Radio Systems Limited
   3040               MORCOM
   1060               Navigation Maritime Bulgare
   2480               Societatea Nationala de Radiocomunicatii S.A.
   3051               Teleservices Pitaoulis Philip Co.
   3038               AS RSTA
   1470               Telia Mobile AB
   3050               Telaccount Overseas Ltd
   3056               Hanse Marine Communication
   3029               Atlas
   1020               Xantic BV
   3064               ANDTELCO Ltd
   1242               Compagnia Generale Telemar SPA
   3054               Sela Technologies
   3057               Mackay Communications Inc
   3047               Societe Internationale De Telecommunications (SITA)
   3306               Maritime Communications Services PTE Ltd (MCS)
   1170               France Telecom Mobile Satellite Communications GmbH
   1070               Stratos
   3022               Globe Wireless LLC
   3104               Cyprus Telecommunications Authority (CYTA)
   3098               J. Finos Co “Telefinos Co”
   3101               Island Net Ltd
   3105               KSC (Krul Satellite Communications)
   3113               World Link Communications, Inc.
   3134               Radio Holland Greece (SRH Marine Electronics S.A.)
                                                                                                   CYPRUS GUIDE TO SHIPPING 57




Appendix 8                     Certificates of Competency
Certificates of Competency Recognised by the Government of the Republic of Cyprus

• Algeria                          • Hong Kong                       • Peru

• Argentina                        • Hungary                         • Philippines

• Australia                        • Iceland                         • Poland

• Bangladesh*                      • India                           • Portugal

• Belgium                          • Indonesia                       • Republic of Korea

• Brazil                           • Iran                            • Republic of Montenegro

• Bulgaria                         • Ireland                         • Republic of Serbia

• Canada                           • Israel                          • Romania

• Cape Verde*                      • Italy                           • Russian Federation

• Chile                            • Jamaica                         • Singapore

• China                            • Japan*                          • Slovakia

• Croatia                          • Latvia                          • Slovenia

• Cuba                             • Lithuania                       • South Africa

• Czech Republic                   • Malta                           • Spain

• Denmark                          • Mexico                          • Sri Lanka

• Egypt*                           • Morocco                         • Sweden

• Estonia                          • Myanmar                         • Turkey

• Finland                          • Netherlands                     • Ukraine

• France                           • New Zealand                     • United Kingdom

• Germany                          • Nigeria*                        • United States

• Ghana*                           • Norway                          • Viet Nam

• Greece                           • Pakistan




NOTE: Cyprus Maritime Administration requires verification of the validity and authenticity of non Cyprus certificates prior to the issue
      of Cyprus recognition endorsement.
      Not withstanding the above, seafarers holding non - national certificates of competency are subject to “expanded” verification
      procedure and assessment of their qualifications.


        *Countries which are in the process of being assessed by the European Commission.
58 CYPRUS GUIDE TO SHIPPING




  Appendix 9            Bilateral Agreements
  Bilateral Agreements on Merchant Shipping
  between the Government of the Republic of Cyprus and Governments of other States:

  • Algeria

  • Bulgaria

  • China

  • Cuba

  • Egypt

  • India

  • Iran

  • Israel

  • Latvia

  • Lithuania

  • Malta

  • Philippines

  • Poland

  • Romania

  • Russia

  • Republic of Korea

  • Sri Lanka

  • Syria

  Agreements with Belgium/Luxembourg, Greece, Italy, Pakistan and Antigua & Barbuda have been
  signed and will enter into force soon.
  Agreements with Estonia, Germany, Hungary, Libya, Slovenia, Lebanon, Thailand and South Africa
  have been initialled and their signature is pending.
CYPRUS GUIDE TO SHIPPING 59
60 CYPRUS GUIDE TO SHIPPING




                                             Ownership requirements:

  CYPRUS                                     A) More than half of the shares (50%) of the ship must be
                                                owned by Cypriot citizens or by citizens of Member
  SHIP                                          States of the EU or of the European Economic Area

  REGISTRY                                      who in the instance of not being permanent residents
                                                of the Republic will have to appoint an authorised
  AT A GLANCE                                   representative in the Republic of Cyprus, or

  B) The total (100%) of the shares of the ship must be owned by corporations, which operate in
     accordance with the laws of the Republic and have their registered office in the Republic of
     Cyprus, or they operate in accordance with the laws of any other EU or EEA Member State
     and have their registered office, central administration or principal place of business within
     the European Economic Area or by corporations registered outside the EU or the EEA but
     controlled by Cypriot citizens or citizens of a Member State. 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 Community shipmanagement company in Cyprus.
  • Applications for registration of ships must be made through Cypriot lawyers.

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

  Types of Registration:
  Provisional, Permanent, Parallel (Parallel in, Parallel out)

  Registration fees:
  There is a fee payable on provisional registration between a minimum of €213,58 and a maximum of
  €5.125,80 depending on the Gross Tonnage (GT) of the ship. The tariff differs for passenger vessels.
  No other fee is payable on permanent registration provided this takes place before the provisional
  registration expires.
  A Cyprus Registry Maintenance Annual Fee in the amount of €300,00 is payable by the registered
  owner of every Cyprus ship.

  Tonnage Tax:
  An annual tonnage tax is payable according to the Net Tonnage (NT) of the ship.

  Government Policy for the Registration of Cyprus ships:
  Vessels of any size and type may be registered in the Cyprus Register of Ships or the Special Book of
  Parallel Registration as long as they comply with the provisions contained in the merchant shipping
  legislation and the circulars of the Department of Merchant Shipping (DMS) and satisfy certain
  conditions according to their age and type.

  Approved Classification Societies:
  ABS, LRS, DNV, BV, GL, RINA, NKK, KRS, CCS, RS, PRS.

  Crew Nationality:
  Crew members may be of any nationality provided they are holders of certificates of competency
  issued by one of the countries on the IMO white List. Officers 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 recognized and have also applied for Cyprus endorsement of their
  certificates of competency in accordance with the STCW 1978 Convention as amended.
                                                                         CYPRUS GUIDE TO SHIPPING 61




International conventions adopted:
SOLAS, MARPOL, LL, CLC, INMARSAT, STCW, COLREG, TONNAGE, FUND, LDC, CSC, SUA, STP,
SAR, HNS, BUNKERS, LLMC, FAL, AFS, ILO.

Advantages:
Economic benefits

• No tax on income derived from the operation of a qualifying Cyprus registered vessel.

• No tax on dividends paid to shareholders of a qualifying Cyprus registered vessel, out of
   profits made from the operation or from the sale of the ship.
• No tax on interest earned on working capital of a qualifying Cyprus registered vessel.

• No tax on the income, or profit made from the sale of a qualifying Cyprus registered vessel.

• No tax on the wages or other benefits of officers and crew members of a qualifying Cyprus
   registered vessel.
• Competitive ship registration costs and fees.

• Favourable tonnage tax scheme approved by the EU.

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

• Full protection for financiers and mortgagees.

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

• Double tax treaties with 45 countries.

• No exchange control and freedom of movement of foreign currency.

• Full protection for financiers and mortgagees.

• Low set up and operating costs for companies.


Other advantages:
• EU flag.

• Classification of Cyprus flag in the “White List” of the Paris and Tokyo MOUs and exclusion
   from the “List of Targeted Flag States” of the U.S. Coast Guard resulting in fewer inspections
   of the ships and less delays at the ports of both MOUs and of the U.S.A.
• Maritime offices in New York, London, Rotterdam, Piraeus, Brussels and Hamburg offering
   services to Cyprus ships.
• A network of local inspectors of Cyprus ships, covering important ports worldwide in order
   to ensure efficient and effective control of Cypriot vessels and to avoid detentions by port
   state control.
• Signatory to all international maritime conventions on safety and pollution prevention.

• Bilateral agreements on merchant shipping with 23 countries, through which Cyprus ships
   receive either national or favoured nation treatment in the ports of other countries.
• Efficient and qualitative provision of services by the Department of Merchant Shipping.
62 CYPRUS GUIDE TO SHIPPING




  FOR
  FURTHER
  INFORMATION
  Department of Merchant Shipping
  Kyllinis Street, Mesa Geitonia
  4007 Lemesos,
  P.O.Box 56193,
  3305 Lemesos,
  CYPRUS
  Tel: + 357 25 848100
  Fax: + 357 25 848200
  e-mail: maritimeadmin@dms.mcw.gov.cy

  OFFICES HEADED BY STAFF
  OF THE DEPARTMENT OF MERCHANT SHIPPING

  Maritime Section,                             Maritime Office, Belgium
  Cyprus Embassy in Greece                      Permanent Representation of Cyprus to the EU
  96 Iroon Polytechniou Ave., 6th Floor,        Avenue de Cortenbergh 61
  GR 185-36 Piraeus,                            1000 Brussels,
  GREECE                                        BELGIUM
  Tel: + 30 210 4536371 / 2                     Tel: + 32 2 7395155
  Fax: + 30 210 4536373                         Fax: + 32 2 7354552
  e-mail: dmspiraeus@dms.mcw.gov.cy             e-mail: gchristophi@dms.mcw.gov.cy


  Maritime Section, UK                          Cyprus Consulate in Rotterdam
  Cyprus High Commission                        Weena 248 (Tower C, 11th Floor)
  13 St. James Square                           3012 NJ Rotterdam,
  London, SW1Y 4LB,                             THE NETHERLANDS
  UNITED KINGDOM                                Tel: + 31 10 404 7901
  Tel: + 44 207 321 4100                        Fax: + 31 10 404 7899
  Fax: + 44 207 321 4171                        e-mail: dms.rot@worldonline.nl
  e-mail: dmslo@tiscali.co.uk


  Cyprus Maritime Office, USA                   Cyprus Consulate General in Hamburg
  Consulate General of the Republic of Cyprus   Rothenbaumschaussee 3, 2nd Floor,
  13 East 40th Street, New York                 D- 20148 Hamburg,
  N.Y. 10016,                                   GERMANY
  USA                                           Tel: + 49 40 410 7497
  Tel: + 1 212 6866016 (ext. 42)                Fax: + 49 40 410 7246
  Fax: + 1 212 4471988                          e-mail: cyconsulate-hamburg@t-online.de
  e-mail: tenusa@aol.com
                                                                 CYPRUS GUIDE TO SHIPPING 63




CONSULAR POSTS HEADED
BY HONORARY CONSULAR OFFICERS

Cyprus Consulate - General in Buenos Aires   Cyprus Consulate in Oslo
Rafael Hernandez 2766                        Stovnerbakken 9B
C1428CFF                                     0980 Oslo,
Capital Federal                              NORWAY
Buenos Aires,                                Tel: +47 90150582
ARGENTINA                                    Mob: + 47 90150582
Tel: +54114 5117920/7                        Fax: +47 22109772
Mob: +549114 4143794                         e-mail: j.ulrich@online.no
Fax: +54114 5117926
e-mail: consuladochipre@fibertel.com.ar
        nik@faroshipping.com.ar

Cyprus Consulate in Arhus                    Cyprus Consulate - General in Panama
Oldrupvej 57                                 Via Porras Edificio Thalass no. 139
8350 Hundslund,                              Panama,
DENMARK                                      PANAMA
Tel: +45 40680538                            Tel: +507 2261255/2261316
Fax: +45 86550940                            Mob: +507 66171217
e-mail: zoewinding@gmail.com                 Fax: +507 2265275
                                             e-mail: pthalass@cableonda.net

Cyprus Consulate in Genova                   Cyprus Consulate in Singapore
Medov S.R.I.                                 c/o One Raffles Quay
Via Scarsellini, 119                         Level #19-01 North Tower
16149 Genova,                                Singapore 048583
ITALY                                        SINGAPORE
Tel.: +39010 54901                           Tel: +656 5079100/5078125
Mob: +393357661580                           Mob: +658 1251025
Fax: +39010 5490272                          Fax: +656 5978111
e-mail: consolatociproge@libero.it

Cyprus Consulate in Naples                   Cyprus Consulate in Hong Kong
Via G. Melisurgo 15                          11/F, 22 Kai Cheung Road,
80133 Napoli,                                Kowloon Bay,
ITALY                                        Kowloon,
Tel: +390 81 5510501                         HONG KONG
Mob: +39 335 7735120                         Tel: +852 2798 1565
Fax: +390 81 5523878                         Fax: +852 2111 9470
e-mail: Michele.pappalardo@tin.it            e-mail: cyprus@kader.com.hk

Cyprus Consulate in Sicily                   Cyprus Consulate - General in Tokyo
Via X Ottobre, 89                            Hibiya – Marine Bldg, 7th Floor
96011 Augusta (SR), Sicily,                  1-5-l, Yuraku-cho, Chiyoda-Ku
ITALY                                        Tokyo 100-0006
Tel: +39 0931 978733                         JAPAN
Mob: +39 334 3060400                         Tel.: +813 3592-0611/ +81 90 33151828
Fax: +39 0931 209820                         Fax: +813 3592-0618
e-mail: cyconsul@gbella.it                   e-mail: info@cypus-hcg.jp
64 CYPRUS GUIDE TO SHIPPING
                                                       CYPRUS GUIDE TO SHIPPING 65




INDEX
                                                                       Pages

A modern business and maritime centre                                     6-9
Administrative procedures (Provisional Registration)                      24
Age Limit                                                                 29
Age - related requirements                                                18
Appendices                                                              49-58
Application and documentation:
- parallel – in registration                                              30
- parallel – out registration                                             32
- permanent registration                                                  28
Application for provisional registration                                  25
Approval of parallel-out registration                                     33
Auditors and accounts (Cyprus Shipping Company)                           13
Beneficiaries (Cyprus Tonnage Tax System)                                 44
Cargo ships                                                               19
Certificate of Cyprus Registry
- Permanent Registration                                                  29
- Parallel in Registration                                                31
Certificates of Competency for officers and ratings                       42
Change of ship’s name                                                  25, 34
Charterers (Cyprus Tonnage Tax System)                                    45
Commencement of trading (Cyprus Shipping Company)                         13
Completion of provisional registration                                    27
Conditions after registration                                             23
Conditions of ownership                                                   16
Costs (Cyprus Shipping Company)                                           13
Cyprus Registry Maintenance Annual Fee                                    36
Cyprus Ship Registry at a glance                                        60-61
Cyprus Tonnage Tax System, The                                          44-46
Deletion of ships                                                         34
Directors (Cyprus Shipping Company)                                       12
Document of safe manning                                                  24
Double tax treaties                                                       47
66 CYPRUS GUIDE TO SHIPPING




    Economy, The                                                                7
    Eligibility for registration and related requirements                      17
    Eligibility requirements (Taxation of Cyprus ships)                        38
    Entry and additional inspections                                           22
    Exemption from Income tax of a qualifying owner                            39
    Extension of provisional registration                                      27
    Fees and taxes payable:
    - annually                                                                 41
    - for the extension of the period of provisional registration              40
    - on parallel (bareboat) registration                                      41
    - on permanent registration                                                41
    - on provisional registration                                              40
    Fees and taxes (Training, Certification and Registration of Seafarers)     43
    Fees for the:
    - deletion of a ship from the register of Cyprus ships                     37
    - recording, transfer, transmission or discharge of mortgages              36
    - transfer or transmission of ships                                        37
    Fiscal incentives                                                           7
    Fishing vessels                                                            19
    Foreign direct investment                                                   8
    Further information                                                      62-63
    Geography and population                                                    6
    Government and legal system                                                 6
    Government policy on the registration of ships                           17-21
    International relations                                                    47
    Language of supporting documentation (Registration of Ships)               22
    Legal framework                                                            15
    Legal status (Cyprus Shipping Company)                                     10
    Legislation (Training, Certification and Registration of Seafarers)        42
    Management and operation of a vessel                                       22
    Maritime administration                                                    14
    Maritime centre                                                             9
    Measurement of the ship’s tonnages and ship’s carving and marking          28
    Memorandum and articles of association (Cyprus Shipping Company)           10
    Merchant Shipping Agreements                                               47
    Mortgages                                                                  34
    Name of the company                                                        10
    Nationality of crew                                                        43
    Options (Parallel Registration)                                            29
    Other fees                                                                 37
    Ownership (Registration of Ships)                                          22
                                                                    CYPRUS GUIDE TO SHIPPING 67




Passenger ships                                                                        19
Parallel-in registration                                                             29-31
Parallel-out registration                                                            32-33
Permanent registration                                                               28-29
Point of Service Activation (P.S.A.)                                                   25
Ports and airports                                                                      9
Procedure for incorporation (Cyprus Shipping Company)                                  12
Professional services                                                                   8
Provisional Registration                                                             24-28
Qualifying ship (Cyprus Tonnage Tax System)                                         38, 44
Qualifying shipping activity (Cyprus Tonnage Tax System)                            38, 44
Recognised Classification Societies                                                    25
Recognised Radio Traffic Accounting Authorities                                        25
Reduction of tonnage tax                                                               40
Register of Cyprus ships, The (Registry Transactions and Mortgages)                    34
Registered office (Cyprus Shipping Company)                                            11
Registration fees                                                                      36
Request for Assessment and Certification (ISM Code)                                    23
Required particulars (Cyprus Shipping Company)                                         13
Returns (Cyprus Shipping Company)                                                      12
Seafarer’s Identification and Sea-Service Record Book                                  43
Secretary (Cyprus Shipping Company)                                                    12
Share capital (Cyprus Shipping Company)                                                11
Shareholders (Cyprus Shipping Company)                                                 11
Ship owners (Cyprus Tonnage Tax System)                                                44
Ship managers (Cyprus Tonnage Tax System)                                              45
Status of vessels:
- registered parallel-in                                                               31
- registered parallel-out                                                              33
Supporting documentation / information (Provisional Registration)                      26
Taxation of Cyprus ships                                                               38
Telecommunications                                                                      9
Terms of payment (Taxation of Cyprus ships)                                            39
Termination of registration:
- parallel-in                                                                          31
- parallel-out                                                                         33
Tonnage and name of the vessel (Parallel Registration)                                 31
Tonnage tax rates                                                                      46
Type related requirements                                                              19
Why Cyprus?                                                                             3
68 CYPRUS GUIDE TO SHIPPING




                                               Edited and Published :
                              Department of Merchant Shipping
                                           Kyllinis Street, Mesa Geitonia
                                                           4007 Lemesos,
                                                           P.O.Box 56193,
                                                           3305 Lemesos,
                                                                 CYPRUS
                                                     Tel: + 357 25 848100
                                                    Fax: + 357 25 848200
                                 e-mail: maritimeadmin@dms.mcw.gov.cy
                                          website: www.shipping.gov.cy

                                                               Design:
                                                  Monogramme Design


                                                              Printing:
                                      Kailas Printers and Lithographers

				
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