It gives me great pleasure to address this special issue of Cyprus 4.0 dedicated to highlighting Cyprus’s shipping sector, says Marina Hadjimanolis
“Shipping is a business sector for which we are proud of. It represents an invaluable asset for our island with significant political and economic advantages. Cyprus is a leading maritime centre, and our vision is to further develop the maritime cluster so that the companies that choose Cyprus for their operations can enjoy a complete range of quality services from both the public and the private sector.
“We aim to enhance the cluster in every way we can, not only for the benefit of our economy but, more importantly to ensure that all the shipping companies feel part of an advanced sector which caters to its every need. High quality and expertise in specialised services are values which matter to us more than anything. As part of the public sector, we are determined to follow private sector standards in the provision of services in terms of speed and quality. By remaining close to the private sector, we aim to listen to our clients and ensure that we can change and adapt in ways that will add value to the industry.”
Cyprus offers a comprehensive package
“Cyprus offers a comprehensive package with economic and other incentives, directly or indirectly addressed to the shipping industry. The ultimate goal of all the incentives is to create a competitive and stable fiscal regime for the shipping entrepreneurs. Fiscal stability is in general an important factor for investments and certainly one of the main reasons shipping companies choose Cyprus for their international or regional headquarters.
“The foundation of our incentives is of course our tonnage tax system, a system fully aligned with the European Acquis in maritime transport, which ensures the Cyprus fleet´s worldwide competitiveness. Other important incentives include more than 60 double tax avoidance treaties and 25 Bilateral agreements on merchant shipping, no ship registration fees, low cost of establishment of companies, zero tax on dividends, significant relief for highly paid individuals taking up employment in Cyprus and many more.
“The stable fiscal and business friendly environment, as well as the richness of expertise that Cyprus shipping offers, has attracted a significant number of shipping companies to Cyprus. Over the last decade, the increase in the number of companies registered under our tonnage tax system has been remarkable, from 95 to about 400 at present.
“At the same time, Cyprus has a large resident shipping industry with over 250 shipping companies based in Cyprus covering the full range of shipping activities from ship owning, chartering and ship management to telecommunications, IT, marine insurance, finance, bunkering, spare parts, ship repairs and maintenance and many more.”
Our commitment to service and excellence
“It should also be pointed out that the Cyprus flag is consistently classified in the “White List” of the Paris and Tokyo MoUs on port state control, illustrating our commitment to excellence of service and effective implementation of international safety, security and environmental protection standards. Our top priority is to maintain and improve the exceptionally high quality for which the Cyprus flag is renowned. The recent rise from 13th place in 2022 to 8th place in the Paris MoU White List, proves that the Cyprus Register of Ships maintains high quality and safety standards for ships flying the Cyprus flag. This rise reflects the efforts Cyprus has made to improve its inspection and control practices, which enhances the reputation and credibility of the Cyprus Register of Ships and recognises the efforts made to ensure the safety and quality of ships. This year we are celebrating the 60 years since the enactment of the first legislation on the formation of the Register of Cyprus Ships which proves the long experience and legacy of excellence of the Cyprus flag.
“It is therefore evident that despite the discriminatory and illegal Turkish restrictive measures against Cyprus shipping (Turkish embargo), and its small size, Cyprus has developed over the last 60 years to be a significant power, by international standards, with a strong voice in the international fora, and in the decision-making processes.
“Cyprus has made significant progress to simplify all procedures, reduce bureaucracy and to have a paperless Maritime Administration. This, being an effort not only to improve our environmental footprint, but mainly to provide a more flexible, effective, efficient and customer-oriented service that will further increase the attractiveness of the Cyprus Ship Registry and its relevant services.”
A one-stop-shipping centre
“In this direction the Shipping Deputy Ministry is creating a one-stop-shipping centre framework, through the digital transformation of the Shipping Deputy Ministry, which will optimise the ministry’s business processes and its operational efficiency. Moreover, the implementation of the Shipping Limited Liability Company Law enacted in October 2022 will improve the competitiveness of the Cyprus flag in international shipping, as well as simplify the procedures and the operating regime of Cypriot shipping companies that own Cyprus ships.
“Undoubtedly, due to its international nature, in recent years shipping is facing many challenges and the consequences of the Covid pandemic, the continuing war situation in the Ukraine, decarbonisation and digitalisation has put shipping under extreme pressure. The Shipping Deputy Ministry has played a leading role in overcoming such challenges.
“One of the main challenges is meeting the emerging issues arising from the transition to a green and digital shipping. Cyprus acknowledges that our marine ecosystem is a valuable resource and therefore the protection of the environment is of crucial importance. As a leading maritime nation, we feel that we have a duty to accelerate the transition of shipping to a low carbon and climate resilient industry.
“We fully recognise that the maritime sector should contribute its fair share to the decarbonisation and energy transition of the shipping sector, while at the same time safeguarding the competitiveness of the maritime sector. As a member of the European Union, Cyprus is actively involved in the formation of the legislation related to the ambitious proposal of EC named Fit for 55 and has recently signed a Declaration on Zero Emission Shipping by 2050.”
Sustainable shipping
“Cyprus is a leading advocate for sustainable shipping, and we believe that a wide range of measures are required to achieve emissions reduction targets and a sustainable future. Such actions include the use of cleaner fuels, the deployment of the relevant fuel infrastructure, the electrification of ships and the use of energy efficiency technologies. Recognising the fact that a combination of such measures has the potential of improving the commercial and environment sustainability, the Shipping Deputy Ministry has adopted green incentives to reward vessels that demonstrate effective transmissions with a reduction of up to 30 per cent tonnage tax for Cyprus ships.
“The Shipping Deputy Ministry will continue its efforts to further enhance the shipping industry, improve and promote the services offered with an aim to attract even more companies joining the maritime cluster in Cyprus, while at the same time to continue offering excellent quality services.”
