Why you should register yacht in Cyprus?

Why register yacht in Cyprus?

Many of the yacht owners ask: why register yacht in Cyprus? Mainly, there are three reasons – flag authority, legislation, global reputation.

The rapid growth of number of the Cyprus shipping companies in recent years brings the island to being one of the biggest international communities of ship and pleasure vessel owners.

The procedure for yacht registration under the Cyprus flag is specially crafted to attract and promote foreign registration. Cyprus currently offers one of the cheapest ship and yacht registration procedures in the world, that may be done completely remotely.

The requirement is that the documentation for yacht registration in Cyprus shall be filled by Cyprus-registered attorney. So prior to registration it is necessary to consult and appoint an authorised representative in Cyprus for yacht registration to determine the application requirements.

Yacht registration types

For yacht owners there are three main types of yacht registration possibilities based on the registrar of Cyprus ships:

1. Provisional Registration:

Registration of ships for 6 months. One time renewal is possible for an additional 3 months.

2. Permanent Registration:

The most common registration of a boat or yacht in Cyprus. If a provisionally registered ship requires permanent registration, it must be done within 6 months, or 9 months in case of the extension.

3. Parallel Registration:

Applies to: 

• foreign vessels of a Cyprus shipping company under bareboat charter to gain the Cyprus flag most often for 2 years (parallel-in)

or,

• owners of Cyprus vessels to choose to bareboat charter the ships to a foreign company/person for parallel registration in a foreign register for the length of a charter party (parallel-out).

To know more details about yacht registration procedure in Cyprus, requirements of ownership and documentation list, press the button below.

Yacht owners or yacht-owning companies choose to apply permanent registration through first establishing provisional registration. 

Cyprus flag benefits for yacht owner

1. Yacht registered under Cyprus flag gives an owner European Union Flag and access to the EEA for trading & pleasure travel;
2. Low-cost yacht registration*;
3. More than 25 countries worldwide have bilateral agreements with Cyprus for favoured treatment in worldwide ports, meaning that your yacht gets national or most favoured nation treatment in the ports of other countries;
4. Highly skilled professionals and maritime infrastructure in Cyprus and beyond. Cyprus has created a network of local inspectors for Cyprus-registered yachts in significant ports all over the world to ensure safety of the vessel;
5. Cyprus flag is white-listed globally;
6. No particular security and scrutiny problems if the yacht is registered under Cyprus flag;

*Please note that 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.

Cyprus flag and tax benefits

Of course, the benefits of Cyprus flag for the yacht listed above are not the only ones. For example, EU approved favourable tonnage tax scheme, possibility of VAT reduction, full protection for financiers and mortgagees, double tax avoidance agreements with more than 55 countries and more.

Cyprus flag tax benefits for yachts include:

• Benefits from the double tax treaties Cyprus has concluded with other countries.
• Cyprus VAT leasing scheme. No VAT is chargeable on the portion of the lease attributable to effective use and enjoyment of the yacht outside the EU territorial waters. VAT would be levied based on the actual percentage of effective EU use and enjoyment of the yacht in the prior year.
• If a company is registered in Cyprus, the shipowner is fully exempt from income taxes from operations in international waters.
• No tax on capital gains is payable on the sale or transfer of a ship or shares in a shipping company.
• No inheritance tax or estate duty on the inheritance of shares in a ship owning company.

For sure! Other benefits of having your yacht registered in Cyprus of course are a majority of international maritime conventions on safety, security, pollution prevention, maritime labour and health and safety provisions that Cyprus is party to.

Cyprus has the approval of the European Commission and the OECD for its maritime environment.

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Planning to Open a company – Read this An Introduction to Cyprus Company Registration

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CONTACT US TO REGISTER YACHT IN CYPRUS

EU LAW FIRM lawyers in Cyprus would be glad to help you register yacht in Cyprus.

In case of any additional questions and information proposal on the procedure and costs, specifically tailored for your vessel, contact our lawyers or book a meeting in Cyprus.