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Shipping Companies

\"Cyprus The island’s development into an international maritime centre began in 1963 when the Government offered the first incentives aimed at the encouragement of ship ownership and the registration of vessels under the Cyprus flag.

In the early 80’s the Cypriot merchant fleet ranked 32nd on the list of maritime nations. Today it ranks 6th with over 2.600 ships exceeding 26 million gross tonnage. This achievement is due to the cost competitiveness of the Cypriot Ship Registry, the island’s well-developed maritime infrastructure as well as the high standard of services offered to international shipping.

There are many reasons why Cyprus has become one of the most attractive places in the world for locating or carrying out shipping activities. Apart from the friendliness, hospitality, competence of its business community and the ability to combine business with sightseeing, pleasure, etc the main favourable factors that have made the island attractive to the shipping community or other investors is that of taxation. Ship owners, managers and their expatriate employees can take advantage of the taxation incentives that are offered not only by the domestic legislation, but also through the wide and increasing network of Double Tax Treaties of Cyprus.

The main taxation provisions available for the shipping industry are:

Ship owners

Exemption from any Cyprus income tax on:
  • the income of a ship owner of a Cyprus ship from the operation of such ship in any shipping activity between Cyprus and ports abroad or between foreign ports (the operation of ship includes the chartering of a ship)
  • dividends that are paid directly or indirectly from profits of ships
  • salaries and other benefits paid to master, officers and the crew
  • no withholding taxes on dividends paid by ship owning companies
  • no capital gains tax on the sale of the ship or on the sale or transfer of the shares of a ship owning company
  • reductions on tonnage taxes where the ship is managed by a Cyprus ship management company
  • no estate duty (death duties) on the shares of the ship owning companies
Ship managers
  • tax is paid at rates equal to 25% of the tonnage tax rates.  Ship managers could elect to be taxed at a special corporation tax rate of 4.25%
  • exemption from taxation of dividends that are paid directly or indirectly from ship management profits
  • no withholding taxes on dividends paid by ship management or their related companies
  • no capital gains tax on the sale of shares of these companies
  • no estate duty (death duties) on the shares of these companies
Crew earnings

The earnings of the crew of Cyprus ships are exempt from Cyprus income tax or social security payments. In addition, because of the Double Taxation Treaties of Cyprus or because of domestic legislation in their countries, foreign crew may enjoy up to total freedom from taxation in the countries of their nationality or residence.