Business in
4 Tactical Calculations Etched in Security with Cyprus Stock Exchange 6 Inside Perspective with Cyprus Investment Promotion Agency 10 MarketTalk with Deloitte
Your business and tax advisers in Cyprus We help you stay ahead of the competition
Deloitte is the largest private professional services practice worldwide. With over 450 professionals locally and with the support of the 170.000 professionals around the globe, Deloitte in Cyprus provides audit, tax, consulting, financial advisory, wealth management and other support services to local and international business companies. Discover why so many leading companies of all sizes, private and public, rely on us as their business and tax advisers year after year.
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INTRODUCTION
The Republic of Cyprus is an eastern Mediterranean island strategically located at the crossroads of three of the worlds most historically important continents: Europe, Asia, and Africa. A European Union member since May 1, 2004 and a member of the Euro-Zone since January 1, 2008, Cyprus also enjoys excellent business relations and flight connections with these continents. Historically tied to the UK as a former Crown territory, the UK remains one of their top trading partners to this day. Cyprus gained its independence from the United Kingdom in 1961, after 83 years of British control. At the moment, there are approximately half a million Cypriots living in the UK, and at least 50,000 British who reside in Cyprus. Indeed such an intertwined historical ark between the two countries over the previous century shall lead to continued interplay between them in the future, both economically and culturally. Despite the recent worldwide economic downturn the growth of Cyprus was less affected than most, thanks to conservative government fiscal management and industry focus on financial services and tourism. The country enjoys low inflation and low unemployment rates when compared to the EU average, as well as strong consumer purchasing power. With the lowest corporate tax rate in the European Union at only 10%, the island is an ideal jurisdiction for Holding Companies. Moreover, it has over 40 bilateral tax treaties, including with the United States. Cyprus has no withholding tax imposed on dividend income, interest, or royalty payments to non-Cypriot beneficiaries. Profits from overseas permanent establishments are tax-exempt. The international competitiveness of Cyprus is reflected by objective independent international assessments. Specifically, the Global Competitiveness Report 2010-2011 of the World Economic Forum ranks Cyprus 40th among 139 countries, while the Doing Business 2011 report of the World Bank ranks Cyprus 37th among 183 countries and 15th among 26 EU countries on the ease of doing business. The banking, accounting, legal, and financial services are extremely efficient and one of the strong points of the economy. The labour force is largely multilingual and highly qualified and the labour costs are low compared to the EU average. Cyprus has an advanced telecommunications network and infrastructure, as well as, a wide network of air-routes offering excellent connections with Europe, Africa, and Asia, as well as modern ports and first-rate sea connectivity. Cyprus has undergone important liberalisation and reform of its financial system since its accession to the European Union (EU) in May 2004. The supervisory regime, laws, and regulations in Cyprus have been brought in line with the relevant EU directives as recognised by the IMFs 2006 assessment. Not to be outdone by the financial sector, the shipping industry in Cyprus ranks among the 10 leading maritime nations in the world and is a highly reputable international shipping centre with a merchant fleet exceeding 21 million in gross tonnage (accounting for 16% of the EU fleet) and nearly 2000 vessels. It constitutes one of the largest ship-management centres in the world with approximately 50 ship-management companies and marine-related foreign enterprises that conduct their international activities in the country. Cyprus has also developed into a transhipment centre for Asia Pacific trade with Europe and with shipping markets situated along the coasts of the Levant and Black Sea, or the North Adriatic. The island is a natural hub for other main-line deep-sea trades passing through the Mediterranean, to North Africa and the Middle East. A major development in the industry is the new tax tonnage system whereby taxes will be charged on the basis of the net tonnage of the vessels rather than the income generated. It is expected that this will allow Cyprus to increase its lions share of the EU shipping industry, as this new taxation system will result in larger percentages remaining in the pockets of shippers compared to income generated taxation schemes. Michael McBride a partner at one of the oldest law firms specialising in Cyprus shipping sector Chrysses Demetriades & Co. LLC believes There is no doubt that Cypruss shipping activities on the worldwide stage shall increase, as has been happening for the last 47 years. Additionally, the fact that Cyprus is now a full member of the EU and of the Eurozone provides stability, certainty and a sense of well-being. Furthermore he adds Against the background of countries: (i) trying to plug their deficits through (inter alia) increased taxation, and (ii) pressurising tax havens to eradicate tax evasion, Cyprus offers a legitimate tax environment and certainty within which a company can base its activities, and more importantly plan its future. One aspect of Cyprus lost in the discussion of its financial, shipping and commerce initiatives will be unavoidable upon stepping off an aircraft and opening your eyes: her beauty. A long desired destination for Britons, Cyprus is steeped in history, and one of the most culturally diverse countries in the world. Many people flock to Cyprus to experience its rich background and multifaceted influencesCyprus has periodically embraced many cultures at certain points over dozens of centuries. This culture thrives during mild winters and lush Mediterranean summers, and is perfect for those looking to enjoy anything from simple time away in an outdoor caf to a challenging round of golf. Whether in on business, holiday or a combination of the two, the old world charm and new age opulence of Cyprus and her shores will be sure to lure you in for an intimate, pleasurable experience.
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Editor: Robert Rimsky Project Manager: Kuljit Kaler Regional Director: Joseph Bove Design: The Arland Group
The views expressed in Business in Cyprus Special Report 2011 are not necessarily those shared with the publisher, Global Investment I Limited. Wishing to reflect the true nature of Cyprus, the editor has included articles from a number of sources, and the views expressed are those of the individual contributors. No responsibility or liability is accepted by Global Investment I Limited for any loss to any person, legal or physical, as a result of any statement, fact or figure contained in Business in Cyprus Special Report 2011. This publication is not a substitute for advice on a specific transaction.
Business in Cyprus
Growth from this reality stems from the fact that regulation in Cyprus is continually updated and improved.
Particularly, the E.C.M. is characterised as unregulated and therefore it does not come under the mandatory provisions for regulated markets, which impose strict listing requirements and continuous obligations. The E.C.M. is addressed to unlisted companies seeking finance and easy access to a secondary market, as well as to investors seeking new investment opportunities, investing in companies with high prospects for development, but also high risk. Listing on the E.C.M. offers the following advantages to the companies: it is an alternative method of securing financing at a competitive cost, it promotes the recognition and reputation of the companys international identity, and it prepares them, if they wish, to transfer to the regulated market of CSE. Cyprus is regarded as an attractive financial centre, since the pro-
Business in Cyprus
Eurobank EFG Cyprus has grown rapidly and managed to become a significant player in the Banking Sector. In the Private Banking area, EFG was awarded the Euromoney award as the Best Private Bank in Cyprus for 2010 and this award was repeated for a second consecutive time in 2011. Eurobank EFG believes that this award truly reflects the quality of their Private Banking services, the Groups technical know-how and expertise, the wide range of investment products they offer to clients and, above all, the fact that they offer personalised and discrete services of unparalleled quality. Banks across the globe are indeed treading unchartered waters and have noticed changes in the behaviour of investors. Investors are trying to diversify their investment portfolio in terms of geographic location, currency and industry sector to manage market risk. Unfortunately the risk undertaken by investors for each investment is not always tangiblea fact that became more apparent during the crisis. Larger diversification in a Portfolio minimises risk for the targeted expected return. Another important trend that has developed is that investors tend to place their funds in simple, transparent products, which they understand well. The Cypriot DTA network is rendering considerable advantages to businesses and individuals who have chosen to establish legal entities in Cyprus. These tax treaties legally supersede local tax legislation and for this reason they are useful tax-planning tools to protect businesses and individuals against double taxation of income earned in other countries. With the signing of each DTA, an increase in business to and from the other country is usually observed. Historically, the geographic position of Cyprus has always helped the island to act as a gateway for trade and commerce from Europe to the Middle East, Central and Eastern Europe. As a result of the above, a significant number of nationals of the above countries reside in Cyprus and/or visit frequently, or use Cyprus as a gateway for their international business banking activities and form a substantial target group for private banking. Above all, the major advantage that is emerging is the fact that Cyprus and its Banking sector have remained conservative and fared well in the global financial crisis. The Cyprus Banking Sector did not need and did not receive any assistance from the Government because it is strictly regulated by the Central Bank of Cyprus which as a prerequisite required banks to be well capitalised, with ample liquidity. This is a key for the way forward, because it demonstrates in the best possible way that Cyprus and its Banks have remained a pillar of stability and safety to which foreign and local investors and Private Banking clients will trust their wealth to in 2011 and beyond. v
Business in Cyprus
Inside Perspective:
More than just a holiday destination with pristine white beaches and 300 days of sunshine, Cyprus can also cater to your business needs ranging from registering and setting up your companys operations to managing your EU, North African and Middle Eastern clients at a considerably lower cost. As well as being an EU country and a member of the European Monetary Union since 2008, Cyprus enjoys the lowest corporate tax rate in the EU of 10%. Cyprus belongs to those jurisdictions on the OECD White List which have substantially implemented the internationally agreed tax standard. In addition to this, Cyprus provides efficient
"Columbia's growth and expansion over the years is attributed to the uniqueness of Cyprus; being the island's strategic position at the crossroads of three continents, its comprehensive legal framework, double tax treaties regime, communication system, banking system, infrastructure in general and last but not least its highly educated labor force.
Captain Dirk Fry, Managing Director Columbia Ship Management Ltd
"Our strategic position on the island allows us to serve an extensive range of clients, by taking advantage of our broad network of 1300 branches across 80 countries worldwide. Socit Gnrale Cyprus location at the crossroads of Europe, Middle East and North Africa, allows a plethora of business prospects in the region and beyond
Jean-Claude Boloux, General Manager Socit Gnrale Cyprus
CYPRUS
business services, has a transparent legal and regulatory system and is committed to sustainable growth. Cyprus welcomes both visitors and investors to work here, so, if you are searching for a new business base, consider Cyprus. Its more than just beaches and sun.
Severis Bldg 9 Makariou III Ave. 4th Floor Lefkosia 1065, Cyprus
Business in Cyprus
With Cyprus strong DTA network, how can an international investor benefit from facilitating investment through Cyprus?
At this stage perhaps it is worth mentioning some of the general tax features of the Cyprus jurisdiction from which investors may benefit. Besides the lowest corporation tax in Europe (of 10%), inbound dividends are not taxable in Cyprus and there are provisions under which such dividends may be exempted from Special Contribution to Defence Fund (SCDF) In turn, outbound dividends are not subject to any withholding taxes in Cyprus and they are not subject to SCDF unless they are distributed to Cypriot resident individuals. Additionally, there are no withholding taxes on interest and royalties received, no capital gains tax on the disposal of shares provided that an immovable property in Cyprus is not involved, no inheritance tax provisions and finally Cyprus has fully implemented all EU Directives obtaining in such way all the tax benefits applicable to intra-community transactions. Taking this benefit a step further, Cyprus has incorporated the provisions of the EU Directives in its national legislation which means third countries can be equally benefited. In addition to this, the use of a Cyprus holding company is the most popular practise of tax optimisation for foreign investors. Furthermore there are various other legal proposals which can serve the purpose of international investors i.e. Cyprus international trusts, international collective investment schemes etc.
Why is Cyprus an attractive jurisdiction for incorporations? How does it compete with other low tax jurisdictions?
Cyprus is, indeed, an attractive destination for incorporations and investments mainly because it manages to successfully combine various modern financial and business tools. With EU accession, dividends paid to Cyprus from other EU countries have no tax withheld in those countries. Besides the low corporate tax rates, the numerous double tax treaties that Cyprus has concluded with other countriesincluding with all eastern European countriesoffer tremendous possibilities for international tax planning through Cyprus in view of the fact that any tax paid in a country with which Cyprus has a treaty is deducted from the Cyprus tax payable on the same income and Cyprus does not impose any withholding tax and dividends, interest and royalties paid by business companies.
How can UK based HNWIs and corporations benefit from setting up various structures and Cyprus companies? What are you currently doing to increase business from the UK?
The tax benefits of a Cyprus company are not limited to any jurisdiction. Cyprus companies, from a tax planning perspective, undoubtedly reinforce tax optimisation. Along with its taxation system, Cyprus maintains an extensive network of Double tax treaties. A Double tax treaty has also being concluded between Cyprus and UK, applicable since 1974, and aims at cultivating further business cooperation which will increase capital and cash flow between the two countries. Up until 2003, Cyprus companies were problematic in UK transactions caught under the anti avoidance provisions of the bilateral tax agreement. Such problematic transactions were eliminated af-
What services does Christodoulos G. Vassiliades & Co. LLC offer in terms of incorporations?
We pride ourselves in being a full service law firm which can provide a wide range of services to our clients. This means that an investor can incorporate and run his company quickly and efficiently using the in-house services provided by our firm in order to maintain the company in good standing from all aspects, without having to obtain these services elsewhere. We have an internal banking department, tax consultants and a litigation department as well as closely related accounting and audit firms available to cater to our clients at any time. v
By Christodoulos G.Vassiliades, Managing Director Christodoulos G.Vassiliades & Co. LLC
Business in Cyprus
What are the major advantages of the Cypriot tax regime for the international investor?
Cyprus is an attractive jurisdiction to create tax efficient international corporate structures. Certain provisions of the domestic tax legislation combined with a wide network of double taxation treaties with forty four countries and the implementation of the EU Directives, offer to international investors a particularly attractive framework with low overall taxation maximising the return on their investments. Specifically, dividends received by Cypriot companies and profits of their foreign permanent establishments are completely exempt from tax under certain conditions. Gains of Cypriot companies from the disposal of shares, bonds, other securities and a wide range of financial instruments are also exempt. Interest rate spreads of financing company structures can be very low and are taxed at the low rate of 10%. Moreover dividends and interest can be paid to nonresident shareholders and investors without any withholding tax in Cyprus and unilateral credit relief is available for tax withheld abroad regardless of the existence of a double tax treaty with the respective country. When all of these favourable tax conditions are combined, they create an extremely attractive platform for international entrepreneurs for investment holding and financing operations, the establishment and management of funds, for holding and exploiting intellectual property rights, for shipping activities and for trading in commodities and in the international stock markets.
What changes and growth have you seen in the last two years with regards to Cyprus being used for international tax planning purposes?
Because of the tax advantages mentioned above, Cyprus has emerged during the last eight years as one of the most favoured holding company jurisdictions offering significant opportunities for the design and implementation of smart tax planning schemes. Due to the global financial crisis and its impact on international trade, business transactions, cross border investments and M&A activity, the conditions in the international markets during the last couple of years were not so favourable and growth in the international business sector was low. However, despite the drop in new company registrations observed at the end of 2008 and during 2009, the numbers started picking up in 2010, when Cyprus experienced growth compared to 2009 and the forecast for 2011 appears even more promising. Growth has been observed during the last two years also in the licensing of new Cyprus Investment Firms (CIFs), the registration of foreign Undertakings of Collective Investment for Transferable Securities (UCITS) for the marketing of their units in Cyprus and new notifications were received by harmonized UCITS Management Companies whose home country is an EU Member State concerning the cross-border provision of services in the Republic. The number of International Collective Investment Schemes established in Cyprus and regulated by the Central Bank of Cyprus has also marked significant growth.
The driving factors come from a combination of the extensive Double Tax Treaty Network, the EU Directives and the attractive provisions of the domestic tax law. Cyprus can play a very important role to facilitate international investors trying to access international capital markets. Despite the comparatively small size of its economy on the global stage, with the attractiveness of its tax regime and the legal and other financial advantages it has, Cyprus offers a tax efficient route and a robust legal framework for businessmen seeking an intermediary location for investments abroad and one of the best platforms to facilitate the flow of inbound investments into a number of attractive and developing markets and in particular the vast Russian and Indian economies. The Company Law framework has recently been amended to enable also the establishment of societas europaea, cross-border mergers and the transfer of the legal seat of a company to and from Cyprus. All the above constitute some of the main reason why Cyprus appears as one of the most significant investors in the Russian economy. The Russian Government appears to be determined to attract foreign investment by creating a favourable environment for the re-investment back into the country of Russian capital, which is abroad and the establishment of favourable conditions for attracting foreign investors in general. Russia is one of the largest economies in the world and an important trading partner and energy supplier for the EU. Cyprus can play a very important and active role in the efforts of the Russian Government and the Russian business community to attract foreign investors in Russia. It can serve as a bridge between Russia and the rest of the world, through which vast amounts of investment traffic into Russia can flow. The visit of the Russian President at the beginning of October 2010 and the signing of the protocol amending the Double Taxation Treaty with Russia has lifted a lot of the uncertainty surrounding the future of the Treaty and the development of inbound and outbound investments from Russia through Cyprus. President Medvedev has effectively given an official blessing for the development of such business opportunities. Other territories which attract investments through Cyprus structures are most of the central and eastern European countries, the Middle East and India. Cyprus holding companies are often used as the vehicles through which important Groups are listing on International Stock Exchanges shares, bonds and other instruments and we have a number of examples for listings on the London Stock Exchange, the main market and AIM, as well as the Stock Exchanges of Warsaw, Tel Aviv, Bratislava and a number of others.
How do you see foreign companies and HNWI using the superior DTA network of Cyprus?
Cyprus has an extensive network of Treaties for the Avoidance of Double Taxation with forty four countries and a number of other treaties are currently being negotiated. The DTA network of Cyprus includes all central and eastern European countries, as well as the CIS countries and a number of these treaties contain some very favourable provisions and low withholding tax rates for extracting income in the form of dividends, interest and royalties from the foreign jurisdiction.
How does the extensive Double Taxation Treaty network of Cyprus help to drive business and facilitate international investment?
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Business in Cyprus
The number of foreign companies and High Net Worth Individuals who will be using the extensive network of Cyprus DTAs is expected to grow. As already mentioned the structures which can be used to provide benefits are for investment holding and financing operations, the establishment and management of funds, for holding and exploiting intellectual property rights, for shipping activities and for trading in commodities and in the international stock markets. In addition to the advantages and benefits mentioned above HNWIs can use Cyprus International Trusts in designing their tax optimisation structures to ultimately hold the investments they can gather under a Cyprus holding company structure belonging to the trust. pervised by the regulating bodies. In an effort to inject funds in the economy, government spending on infrastructural projects is also expected to rise. As the world economy is slowly recovering from the crisis, the prospects of business development are expected to be more dynamic and promising. More acquisitions and cross border transactions are anticipated which will unavoidably increase the need for proper and tax efficient structuring for those deals. The Cyprus Business Community is closely watching global developments with particular emphasis on the European and Russian economies. The financial and banking systems of Cyprus have demonstrated a high degree of resistance towards the crisis, by having low exposure to subprime financial instruments, thus maintaining strong and healthy liquidity and capital adequacy ratios, unlike other financial institutions worldwide. The Cyprus banking system, which is under the effective supervision of the Central Bank, is in a position to continue servicing global demand by providing a secure shelter for deposits and other liquid funds. Cyprus can offer efficient and attractive solutions for those who want to take advantage of the challenges and opportunities which appear on the global markets. We expect the demand for international tax planning connected to Cyprus to be linked to listings on London and other European Stock Markets of Groups from recovering economies of Eastern Europe, Russia, Ukraine and the rest of CIS, shipping and shipping related activities to take advantage of the new tonnage tax regime and the establishment of funds and CIFs. It will be considered a great success for Cyprus, if we manage to direct part of the outbound investment from China into Europe and Russia through our country. Another sector on which we will concentrate our efforts during 2011 is the renewable energy sector. A number of significant projects have started and a number of others have been licensed and are now at the stage of seeking finance and investors. The size of these projects certainly requires investment from abroad. We are heavily involved in providing financial advice in this field and are hopeful that a significant number of Green Energy MWs will be financed and commissioned in Cyprus during 2011 facilitating Cyprus towards achieving its objectives in this area. Business success in todays rapidly changing global environment requires the ability to rely on your business partners. At Deloitte, the multidisciplinary environment, the expertise of the staff, combined with an industry-focused approach, enable the firm to offer integrated business solutions to its clients. Deloitte offers professional services in auditing, accounting, tax, financial advisory, and consulting, and provides the link for investors looking to establish a company in Cyprus. We undertake to advise our clients on how to create a tax efficient corporate structure by exploiting the vast resources of the international network of Deloitte; we support our clients to establish a company in Cyprus and we provide all the required services to enable them to operate their companies efficiently and in compliance with the requirements of the law. Furthermore through our Financial Advisory and Corporate Finance service lines we offer M&A advisory, Financial and Tax due diligence work, project and company valuations and listings in international stock markets. Our primary objective is to provide quality services to our clients and to become their trusted financial advisors. v
Contact Information: Limassol Tel: +357 25 868616 Mob: +357 99 611827 Email: nkyriakides@deloitte.com Nicosia Tel: +357 22 360300 Email: infonicosia@deloitte.com Larnaca Tel: +357 24 819494 Email: infolarnaca@deloitte.com
Cyprus has recently passed some legislation around UCITs and funds. Why would Cyprus be an attractive jurisdiction for international investment funds?
Cyprus is indeed launching a strong bid to become a base for International Collective Investment Schemes (ICIS). Over the past ten years the island has been used by Collective Investment Schemes based in the well established fund centres like Cayman Islands, Luxembourg and Ireland to invest heavily in Eastern Europe, Russia, the CIS, the Middle East and India. Taking advantage of the provisions of the domestic tax legislation, the favourable Double Tax Treaty network of Cyprus with these territories and the ability to benefit also from the EU Directives, Cyprus entities were used in a Two-tier Fund structure as the investing vehicle to invest on behalf of the parent/the fund. The structure is known as a Feeder Fund. Although Cyprus caters for UCITS, which are under the supervision of the Cyprus Securities and Exchange Commission, it is also well placed to host non-UCITS funds, known as ICIS. The law in force for ICIS, which are under the supervision of the Central Bank of Cyprus, was established in 1999 and allows ICIS which are established and based in Cyprus to enjoy a number of tax and other benefits, which can positively impact on their performance. ICIS, which can either be of limited or unlimited duration, under the Cyprus law can take one of four different types of entities; Fixed or Variable Capital Companies, Unit Trusts and Limited Partnerships. Building on the reputation of a top-tier financial jurisdiction and its involvement in the structuring of international investment funds, Cyprus is now seeking to take a more prominent role in the fund industry arena and promote itself as an ideal location for the establishment of investment funds, both EU regulated Undertakings of Collective Investment in Transferable Securities (UCITS) and alternative investment Funds. The Authorities believe and we share and support this view that Cyprus has the know-how and the necessary ingredients to develop the infrastructure through a competitive pricing policy, a reliable banking sector and the support from experienced professionals, which are the basic requirements to build this industry. The attraction of international investment funds, fund managers and the providers of other services connected with this sector will contribute towards achieving more integration and strengthen even further the position of Cyprus as an international financial centre.
What trends do you see for 2011 in terms of international tax planning in Cyprus? What is Deloitte Cyprus plans and focus for 2011?
Following the effects of the Global financial crisis the Global economy is undergoing certain restructuring and consolidation, being rebuilt on more solid foundations; on the strong and healthy industrial and commercial business units that have survived and hopefully on a more effective regulatory environment, closely monitored and su-
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Business in Cyprus
cance of the approved system lies in the fact that it goes far beyond any other tonnage tax system approved in the EU and compares favourably with similar systems of leading maritime centres outside Europe. The new system enhances the competitiveness of ship owners, ship managers and charterers, encourages the employment of European personnel and the maintenance of shipping know-how and gives a new impetus to the growth of the shipping sector. Taxation is calculated on the basis of the tonnage of the ship instead of the income generated. The tax will be charged on the basis of the net tonnage of the vessels. Owners of Cyprus ships will continue to be automatically taxed with tonnage tax. Ship owners, charterers and ship-managers participating in the tonnage tax system are also exempted from income tax or 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. The simplified tonnage tax is not linked to a notional income or a corporate tax rate. This is the main feature of the Cyprus system and is approved for the first time for EU Member States, particularly a state with an open registry. The tonnage tax base is extended to include profits from the sale of vessels, interest earned on funds used as working capital and dividends paid directly or indirectly out of profits generated from maritime activities. It is clear that the new regime contributes toward a safe, competitive and stable environment for shipping companies, which is essential for their growth and expansion. The system therefore provides Cyprus with a competitive advantage and is expected to improve the already strong position of the country in the shipping world and to promote it both as a thriving international registry, and a quality maritime centre. At the same time, the tonnage tax secures a stable fiscal environment for Cyprus shipping for the long term. It also introduces incentives for new shipping activities and extends the implementation of the EU maritime transport policy beyond European boundaries. In 2011, the Department of Merchant Shipping will also be focused on promoting the new tonnage tax scheme abroad. The existing legislative and administrative framework in Cyprus already offers a variety of incentives to ships flying the Cyprus flag, which they can utilise in order to enhance their competitive position. It is expected that many new companies will be established in Cyprus in order to take advantage of this new favourable taxation system, as this has been seen as a major growth opportunity by international shippers, and Cyprus itself. The government of Cyprus shall maintain its policy of ensuring Cypruss leading role as a maritime centre and to continually develop the maritime cluster and upgrade the Cyprus registry in terms of both quality and quantity in years to come. v
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Business in Cyprus
What is the industry currently doing to stay ahead of competing jurisdictions? What challenges do you see for the Cypriot shipping industry over the next year? Emphasis is given on continuous improvement of the existing infrastructure, the incentives given to individuals and companies operating in the shipping industry and the enhancement of the reputation of Cyprus. Also to increase the number of Cyprus Maritime offices and inspectors, offering services to Cyprus ships worldwide. Cyprus is a signatory to all international maritime conventions and has bilateral agreements on Merchant Shipping with 23 countries and looking for more. Of course the major challenge facing the industry in Cyprus is the continuous embargo on Cyprus ships by Turkey despite the attempts of the EU to stop this. What is your opinion of Cyprus shipping? Cyprus is already an established international and maritime centre within EU and globally with some of the worlds more prominent ship management companies based and operating from Limassol. Despite Cyprus Ship Registry being an open registry, we have a large number of companies established in the Island with shipping related activities such as marine insurers, brokers, suppliers etc. All the advantages mentioned and the commitment shown by the DMS and the private sector for high standard, efficient and qualitative service can only send a positive and optimistic message about the future of Cyprus shipping. v
Cleo Papadopoulou, Partner Liakos Theodorou, Partner George Lambrou, Partner
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2010 PricewaterhouseCoopers Ltd. All rights reserved. In this document, PwC refers to PricewaterhouseCoopers Ltd of Cyprus, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.