History of shipping in Cyprus

The history of the Sea and Shipping in Cyprus traces back thousands of years. The island’s expert knowledge of sailing and trading was acquired through the many civilisations that conquered Cyprus in the ancient years, such as the Egyptians, Greeks, Romans, French, Venetians and British. Cyprus’s constant striving for perfection in the field of merchant shipping has also been naturally facilitated by its almost ideal geographic location, which is at the crossroads of three continents, Europe, Asia and Africa.

In 1960 the independence of Cyprus took place. The country’s economy witnessed an upsurge with the modernisation of all business and commercial sectors. Consequently, the role of Cyprus as an international centre for business and commerce has evolved considerably and was stimulated by increased trade, a growth of offshore activities, and the rapid expansion of the economy of Cyprus.

Shipping in Cyprus today

Today Cyprus has the 3^rd largest Merchant fleet in Europe and the 11^th largest in the world with more than 1000 ocean-going vessels totalling 21 million gross tons. The country is also the EU’s largest ship management centre and amongst the top three in the world. With a sovereign flag of excellent quality, a country has become a preferred base for global shipping operations. Companies present today in Cyprus, and more particularly in Limassol, are some of the largest of their kind in the world and manage around 20% of the world’s third party manage fleet, and the sector employees about 3% of Cyprus workforce.

Companies engaged in chartering, crewing, ship surveying, shipbroking, salvaging and marine insurance, are able to offer first class services to their customers worldwide from their offices in Cyprus. In addition, competent and reputable shipping agents, efficient clearing and forwarding agents as well as top class ship chandlers, freight forwarders, travel agents and other shipping related companies are located in Cyprus.

Competitive tonnage tax

A major driver of the shipping sector’s success was put in place in 2010 when after more than 10 years of negotiations with Brussel, Cyprus secured an agreement for an upgraded and competitive EU – approved tonnage tax (TT) system. On 2020, this agreement was reapproved by the EU, and also anonymously approved by the House plenum, ensuring the stability of the tax framework until 2030 and maintaining Cyprus’ prominent position in the shipping arena both on a European and international level.

The main benefit of the (TT) is the certainty it provides companies on their annual tax obligations enabling them to do their business planning accordingly. While other jurisdictions may have less expensive TT regimes, Cyprus incorporates all three types of maritime activities-ship owning, shipmanagement and chartering, making it unique in the EU where other jurisdictions might specialise in just one or two of these areas.

The Cyprus flag is also considered one of the highest quality EU flags available today and ranks at the top of various Port State Control agreement ‘White Lists’

Maritime Safety and Security

The main efforts of the Government of Cyprus are focused on the continuous improvement of the existing maritime infrastructure, the incentives available to resident shipping companies and the enhancement of the international reputation of the Cyprus flag as a maritime flag.

With regard to safety and pollution prevention, Cyprus has fully harmonised its legislation with that prevailing in the EU. From an implementation point of view, the Cyprus Maritime Administration is continually being strengthened with specialised personnel at the Shipping Department. Similarly, a network of inspectors of Cyprus ships has been set up at the most important ports around the world which has contributed substantially to the increase of inspections of Cyprus flag ships.

Cyprus Ports

Geographic position is considered as the most important factor in the port business. Cyprus is strategically located in the north-eastern corner of the Mediterranean basin, at the intersection of major international and regional shipping lanes. Such a location has made the Cyprus ports a natural place of call for vessels sailing in and out of the Mediterranean region. Thus, despite of shipping consortiums and the relatively small size of the external trade of the country, some 100 different lines service Cyprus regularly, providing wide, regular and frequent connection between the Island and the rest of the word.

Seaborne traffic in Cyprus is served by a modern and highly integrated national port system composed of the new multipurpose ports of Limassol and Larnaca, the new industrial port of Vassiliko and the three specialized oil terminals at Larnaca, Dhekelia and Moni.

Cyprus ports are located within an area of less than 40 nautical miles and by being part of the same enterprise, complement each other in terms of facilities and traffic, constituting one larger port in effect. In combination, they serve all types of cargo and jointly catering to the country’s local and transit traffic requirements as if they were a single port.

In recent years, Cyprus has become one of the most important cruise centres in the Eastern Mediterranean. It serves inter alia as the home base for a number of modern cruise ships. Enriching the islands tourist product, they carry out excursions in the region for locals and tourists on a regular basis for at least nine months of the year. The island is also included in the itineraries of most of the international cruise liners sailing in the Mediterranean region.

Current emphasis is being placed on the development of Cyprus ports as turnaround cruise ports. The construction of an impressive new Passenger Terminal at Limassol Port has already started and the proposed development of Larnaca port into a major cruise port is slowly but steadily being prepared towards that direction. Favourable geographical location, a most safe environment for cruise ships and passengers and the high standard of tourist, business and port services available all contribute in making Cyprus the most attractive option both as a port of call and as a base for ships cruising in the Eastern Mediterranean.

Cyprus and the European Union

Cyprus through its very attractive legislative and operational shipping infrastructure has the potential and the advantages to develop into an even greater pole of attraction for first-rate shipping companies, both from countries within and outside the EU. In addition, the Cyprus flag, being in effect (together with Malta) the only “Open Registry” within the EU, will attract an even larger number of quality tonnage to Cyprus.

The accession of Cyprus to the EU had a substantial positive impact on both the European and Cypriot maritime industries. There is an important contribution of the private and the governmental sectors in terms of shipping know-how in the fields of ship registration and shipmanagement, which several European partners lack. This know-how is channelled through the active participation of Cyprus in the various EU bodies, such as the European Maritime Safety Agency (EMSA), the Committee on Safe Seas and the Prevention of Pollution from Ships (COSS), and the European Community Shipowners’ Associations (ECSA).

In addition, the European merchant fleet capacity has increased upon Cyprus’ accession due to the Cyprus fleet contribution. Cyprus fleet constitutes approximately 15% of the EU fleet. This means that Europe’s voice in the main international shipping regulatory bodies (IMO and ILO) is strengthened along with a stronger position with regard to the entry into force of new regulations or amendments of existing laws.

Finally, Cyprus is transformed as the Europe’s “watchdog” in the Eastern Mediterranean region. Cyprus has installed and operates a Vessel Traffic Monitoring and Information System (VTMIS), which has the full capability to monitor, process and provide information on maritime traffic that enters the Middle East border of the EU, with positive effects for the whole region in respect of illegal immigrants’ traffic intercepting, reduction of accidents and protection of the marine environment. Also, Cyprus as Europe’s Eastern Border constitutes a bridge of communication and cooperation between Europe and the countries of the Middle East.