Registration of Yachts and other pleasure vessels in Cyprus.

Registration of Yachts and other pleasure vessels in Cyprus.

Introduction.

Cyprus’ geographic location is possibly one of the most strategically important locations in the world, as it lies at the gateway of Europe, Africa, Asia and the Middle East.

Therefore, Cyprus is a center where shipowners and investors from all over the world can carry on business in a harmonious and friendly environment. The growth in the number of Cyprus shipping companies in recent years witnesses the enormous appeal which the island has to the international community of shipowners.

The procedures for registering vessels under the Cyprus flag have been designed to attract and promote foreign registration. For this reason, they are simple, effective and ensure that the Cyprus flag is respected by all international shipping authorities.

Why the Cyprus flag?

• Political security:
– Cyprus is a sovereign Rag member of the European Union •
– European Union diplomatic protection afforded to Cyprus ships.

• Legislative framework
– Cyprus is Party to all international maritime conventions on safety, security, pollution prevention, maritime labor and health and safety giving full and complete effect to their provisions.
– Cyprus signed Bilateral Agreements on merchant shipping signed with 25 States, through which Cyprus ships receive either national or most favored nation treatment in the ports of other States .
– Comprehensive and pioneering national legislation for the protection of Cyprus ships from piracy and other unlawful acts including a legal framework allowing and regulating the use of private armed security personnel in high-risk areas.

• Service:
– Cyprus offers a commitment for providing quality services, a competitive business and taxation environment whilst ensuring efficient shipping and the highest possible standards in safety, security and environmental protection.

• Economic benefits:
– Favorable tonnage tax scheme approved by European Union.
– No several taxes
– Full protection for financiers and mortgagees.
– Double tax avoidance treaties with 50 States.

Registration of Ships

Registration of Ships in Cyprus is handled by the Shipping Deputy Ministry, which was established on the 01/03/2018.

In terms of the Merchant Shipping (Registration of Ships, Safes and Mortgages) Laws of 1963 as amended, a ship shall be deemed to be a Cyprus ship where more than 50 per cent of the shares are owned either:
(a) by a Cypriot citizen; or
(b) by a Cyprus registered company irrespective of whether such company is owned totally by aliens; or
(c) with the special permission of the Council of Ministers, by a foreign registered company with a controlling interest held by Cypriots.

Thus, a shipping company, unlike all other offshore companies, may be owned either entirely by Cypriots, or exclusively by foreigners or jointly by Cypriots and foreigners.

In accordance with the Advocates Laws of Cyprus, only lawyers registered as practicing 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 of a vessel owned by a Cypriot company. Therefore, the application according to the law must be signed and filed by a lawyer.

Types of Registration

A. Provisional Registration

In Cyprus, the majority of vessels are firstly provisionally registered before their permanent registration is effected.

This is because the provisional registration allows time that enables the administrative formalities relating to the permanent registration of the vessel in Cyprus.

The Provisional Registration, is as valid as the permanent registration and it lasts for 6 months. The initial six-month can be extended by a further 3 months.

For the Provisional Registration, an application must be submitted on behalf of the owner to the Deputy Ministry of Shipping, which requires the following information:

– Company Certificates of the yacht owning company by the Registrar of Companies.
– Existing name and present flag of the yacht;
– Gross and net tonnage of the yacht;
– Place and year of built;
– Place where the yacht can be usually found;
– Length.
– International sign.
– Serial no./Plate Hull no.
– Proposed name of the yacht.
– “Seaworthy Certificate”, in cases where the yacht is not newly built. Such a certificate is issued by a surveyor of a classification society or a Cyprus government surveyor.
– “Builders Certificate” (for newly built yachts).
– Official evidence of ownership and freedom of encumbrances (for non-newly built and not registered under any flag).
– Certificate of deletion from previous registry or a certificate that the yacht is owned by the sellers and has no encumbrances (for non-newly built yachts).
– Bill of sale duly stamped and legalized.
– Power of attorney.
– Application for a radio license.

B. Permanent Registration

The Permanent Registration of a provisionally registered vessel must be completed within 9 months (including the 3 months extension).

It must be underlined that is not necessary for the yacht to be present in a Cyprus port at the time of permanent registration.

The following additional documents must be lodged with the Registrar of Ships (if not filed at the time of Provisional Registration):
– Cyprus tonnage certificate (form MS12).
– Certificate of survey (form MS1);
– Application for registration;
– Copy of the agreement signed by the ship’s International Radio Accounting Authority.
– Copies of the ship’s statutory certificates;
– International tonnage certificate;
– Duly verified ship’s carving and marking note.

Fees

The fees for the registration are calculated by the Registrar of Ships after the submission of the relevant application according to the vessel’s gross tonnage.

The minimum fee is approx. €200 and the maximum fee is approximately €5.000.

For example, for a small vessel around 10m length, the provisional registration fees are approx.€600.

No further fee is payable for permanent registration, if this takes place before the provisional registration expires.

For more information as regards the procedures, required documents, registration fees or for any other relevant information you can contact our Law Firm at office@lawyer.com.cy