Deputy Ministry of Shipping – Cyprus

In recent years, efforts have been made to upgrade and further develop the maritime industry of Cyprus.

When the Deputy Ministry of Shipping begun its operation, 168 companies were registered under the Cyprus tonnage tax system while today it has risen up to 191 companies in total.

The Deputy Minister of Shipping, Ms. Natasa Pilides stated that attempts are being made to simplify the procedures and modernize legislation so as to make Cyprus more competitive as a Register and as a maritime cluster. She also highlighted that attempts are being made to digitalize and modernize the Cyprus systems in order to make the Cyprus Registry even more attractive.

The budget of the Deputy Ministry for the year 2019 is 9.8 million euro compared to 8.1 million euros for the year 2018, i.e. an increase of 1.7 million euros. This is due to the large increase in the budget expenditure growth which is mainly because of the commercial shipping promotion and development activities.

The Deputy Ministry’s revenue for the year 2018 is estimated around 12 million euro while the indirect incomes of the maritime industry is estimated at 800 million euros which amounts to 7% of the GDP of the island. According to Ms. Pilidou, there are currently around 1100 seagoing ships and 600-700 small vessels under the Cypriot flag.

Based on these facts it is evident that the maritime industry of Cyprus is gradually evolving. The shipping fleet of Cyprus is the 10th largest worldwide and has 25% of the whole EU fleet. By continuously updating its services and striving for perfection in the field of shipping it will not be a surprise if Cyprus conquers the top in the near future.

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The main Marinas of Cyprus

The main Marinas of Cyprus are the Limassol Marina, the Larnaca Marina and the Latchi Marina.

The Limassol Marina is the most modern harbour in Cyprus and provides 650 birthing facilities for all type of yachts ranging from 6meters length up to 115 meters.

Currently, a fourth Marina is under construction in Ayia Napa which is expected to be completed by 2021. The Marina however is scheduled to be operating by the summer of 2019.

This is a significant development for the Famagusta region and is expected to cost around € 220 million. It is anticipated to be the next premier yachting destination in the Mediterranean. Apart from the Marina itself, this project will include luxurious villas, apartments, restaurants, bars, shops, cafes as well as a square for holding events.

This upcoming Marina development is an excellent opportunity to invest, explore the beautiful island, relax and spend quality time with friends and family.

Registering a ship in Cyprus provides vast advantages for anyone who wants to register his ship under the Cyprus flag such as low registration costs, it is an EU flag, no exchange control and freedom of movement of foreign currency, double tax treaties with 43 countries, full protection for financiers and mortgagees, it provides three different registration options amongst others.

As a leading firm in the Admiralty sector our Associates and Law Firm that we entrust, Christodoulos G Vassiliades & Co LLC provides all services needed by clients. The Firm owes its success to the distinguished appointments of the Firm’s Senior Management, as well as to its broad network of international contacts and representative offices, which enables it to provide clients with the services they desire, promptly and efficiently.

We are committed to providing high quality service in the field of Shipping Law, while at the same time promoting the business interests of our clients.

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Monaco Yacht Show

This year, the Monaco Yacht Show was held on the 26th until the 29th of September 2018 which our team attended.

Held once a year and running for the last 25 years, the event is the ideal occasion to view and compare superyachts as well as to network with potential clientele and prospective clients.

Being one of the most prestigious yachting events in the world with more than 125 magnificent superyachts and more than 580 exhibitors it is the pinnacle of luxury.

Exhibitors included superyacht builders, award winning yacht designers, luxury suppliers among others.

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ICOMIA World Marinas Conference

Christodoulos G Vassiliades representatives attended the ICOMIA World Marinas Conference that was held on the 25th until the 27th of October 2018 at the Stavros Niarchos Foundation Cultural Centre in Athens.

ICOMIA World Marinas Conference was organized under the auspices of the Hellenic Republic Region of Attica, of the Enterprise Greece, the Athens Convention and Visitors Bureau as well as by the Greek Tourism Confederation.

The ICOMIA World Marinas Conference takes place on a biennial basis and welcomes renowned people of the marina and shipping industry. The ICOMIA Marinas Group aims to improve and share information regarding the development and best practice management of marinas and boating infrastructure throughout the world.

One of the main topics of the Conference was ‘New Ideas-Trends and Developments’ where much attention and weight was given to the future of electric boat propulsion and solar piers as well as floating structures. This is based on the immense threat of the industry posed by environmental issues.

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CAYMAN ISLANDS REGISTRY- YACHTS ENGAGED IN TRADE

Shipping Notice 3/2017 – issued by the Maritime Authority of the Cayman Islands

PURSPOSE

The purpose of this Shipping Notice is to define the procedure to be followed for a Pleasure yacht registered in the Cayman Islands to obtain Yacht Engaged in Trade certification.

 

APPLICABILITY

This Shipping Notice is applicable to all Cayman Islands registered pleasure yachts that seek to charter in EU waters, which have a VAT paid status or operate under Temporary Admission regime in EU waters.

This Shipping Notice also sets out the technical requirements necessary to qualify as a Yacht Engage in Trade.

 

CAYMAN ISLANDS – MEANS OF REGISTRATION

At the present, the Cayman Island Shipping Registry offer yachts two means of registration:

  1. full registration ‘pleasure’ and
  2. full registration ‘commercial’

 

The Yacht Engaged in Trade (YET) program has been developed as a new dual use operation program to offer a third means of registration for commercially compliant yachts. This is to allow owners the flexibility they require to operate their yacht privately with the option to charter their yacht for up to 84 days per year while taking into account EU VAT and Port State Control requirements.

 

Yachts meeting the requirements of this Shipping Notice will be issued with

  • a Cayman Islands Yacht Engaged in Trade Certificate of Compliance (YET COC) and
  • temporary Certificate(s) of British Registry for a Yacht Engaged in Trade (temp COBR YET) covering the charter periods or periods of commercial promotion. These certificates authorize yachts to charter for up to 84 days per calendar year in European (EU) waters.

 

Yachts wishing to engage in trade activities are required to be in compliance with:

  1. the Merchant Shipping (Vessels in Commercial Use for Sport & Pleasure) Regulations, 2002;
  2. the applicable sections of the Large Yacht Code;
  3. this Shipping Notice; and
  4. all other applicable and international requirements.

 

 

ADVANTAGES APPLICABLE TO YACHTS ENGAGED IN TRADE (YET)

  1. Ultimate Beneficial Owners can privately use their yacht without losing the option to charter the yacht on an occasional basis to offset the annual running costs
  2. Eliminates the need for switching between pleasure and commercial registration every time the yacht is to change its mode of operation and use
  3. Eliminates the need to proceed to export/import formalities and the need to leave the EU and visit a third country post each time the yacht is to switch between pleasure and commercial use
  4. Ultimate Beneficial Owners do not need to sign a charter agreement when using their own yacht on a private basis
  5. Ultimate Beneficial Owners do not need to pay VAT on their own use
  6. No risk of substantial penalties for extensive pleasure use
  7. VAT Exemption is available on works for non-VAT paid yachts (inward processing relief regime)
  8. The 18-month Temporary Admission allowance period is paused each time the yacht is used as a Yacht Engaged in Trade (YET) and placed under Temporary Admission for Commercial Activity (TACA YET)

 

 

ELIGIBILITY FOR A YACHT ENGAGED IN TRADE (YET)

  1. The yacht must be 24 metres or more in length
  2. The yacht must be in possession of a Cayman Islands Pleasure Certificate of British Registry (Pleasure COBR)
  3. The yacht must successfully undergo an initial Compliance Verification survey in accordance with section 6 of this Shipping Notice
  4. The yacht must comply fully with the requirements of the relevant chapters of the Large Yacht Code
  5. The yacht must be classed by a Classification Society recognised by the Administration
  6. The yacht must operate in full commercial compliance at all times, whether engaged in trade or not; including full commercial compliance with all applicable national requirements and international Conventions’
  7. Yachts with a gross tonnage of less than 500, shall implement a Safety Management System as per the requirements of the Large Yacht Code. There is no requirement for a yacht under 500 gross tonnage to engage the services of a shore based company or Designated Person Ashore.
  8. The yacht must have a documented planned maintenance system for all identified critical equipment
  9. The yacht must hold a valid International Load Line Certificate issued in accordance with the Large Yacht Code for at least a short-range yacht
  10. The yacht must be issued with a Cayman Islands Yacht Engaged in Trade Certificate of Compliance (YET COC) and temporary Certificate(s) of British Registry for a Yacht Engaged in Trade (temp COBR YET) covering the charter periods or periods of commercial promotion

 

 

LIMITATIONS APPLICABLE TO YACHTS ENGANGED IN TRADE (YET)

  1. Whilst engaged in trade and operating under a temporary Certificate of British Registry as a Yacht Engaged in Trade (temp COBR YET), yachts are subject to any operational limitation included in the Yacht Engaged in Trade Certificate of Compliance (YET COC)
  2. Commercial operations / charters are limited to a maximum of 84 days per calendar year
  3. A maximum of 12 passengers may be carried
  4. Charters are currently limited to Monaco and French waters
  5. Owner’s pleasure use is not allowed during the period of validity of the temporary Certificate(s) of British Registry for a Yacht Engaged in Trade (temp COBR YET)
  6. A signed Master’s Limited Trade Declaration for a Yacht Engaged in Trade (YET) shall be made and retained for inspection on board
  7. Yachts certified as Yachts Engaged in Trade are not entitled to apply for any VAT exemptions on fuel or supplies

 

 

APPLICATION PROCEDURE FOR YACHT ENGAGED IN TRADE (YET) CERTIFICATION

  1. The registered owner of the yacht must submit registration application form and complete the applicable ‘Yacht Engaged in Trade’ (YET) declaration in section 5 of the registered form
  2. The yacht owner, manager or representative shall submit all applicable documentation to the Administration for Pre-Registration Vetting
  3. If not already in possession of a Large Yacht Code Compliance Certificate, the yacht must successfully undergo an initial Compliance Verification survey in accordance with section 7 of this Shipping Notice upon which a Yacht Engaged in Trade Certificate of Compliance (YET COC) shall be issued
  4. The yacht owner shall arrange for EU customs formalities to be addressed by the Customs Broker in the name of the Importer/Exporter
  5. The yacht must either:
  • Be in possession of a Value Added Tax (VAT) paid certificate or other document proving that the yacht has a VAT paid status; or
  • Operate in EU waters under the Temporary Admission (TA) regime in accordance with EU regulations which allows the yacht to enter and stay in EU waters for a period of up to 18 months without being liable to pay VAT on the full. This option is only available to yachts ultimately owned by non-EU residents and owned by non-EU Companies.

Note: a Customs Broker is only required to carry out customs formalities on behalf of the Importer/Exporter for yachts operating under Temporary Admission (TA).

The procedure includes:

  • The yacht being placed under Temporary Admission (TA) followed by Temporary Admission for Commercial Activity for a Yacht Engaged in Trade (TACA YET);
  • Issuance of the relevant oral declaration for the placement of the yacht under Temporary Admission (TA);
  • Issuance of the relevant import/export forms to provide clearance in and out for the yacht from the Temporary Admission for Commercial Activity for a Yacht Engaged in Trade (TACA YET) regime, during the period trade activities are undertaken.

6. At the end of the charter or period of commercial promotion, the Importer/Exporter shall remove the yacht from the Temporary Admission for Commercial Activity for a Yacht Engaged in Trade (TACA YET) regime.

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Yacht Registration Centre, Y.R.C

15 Agiou Pavlou
Nicosia - 1105
Cyprus

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