Cyprus: Anastasiades says shipping sector to benefit from settlement

President Nicos Anastasiades said that he was confident that a settlement of the Cyprus problem which will lead to a lifting of the Turkish embargo will boost the prospects of Cyprus's shipping sector.

"The contribution of Cyprus's shipping to achieving the above targets was invaluable, which confirms that it is priceless capital for Cyprus and one of the most important pillars of economic growth accounting for 7 per cent of gross domestic product," he told the Cyprus Ship Owners Association at a luncheon in Athens according to the emailed transcript of his speech.

Cyprus's economy will grow 2.9 per cent this year after expanding 1.6 per cent in 2015, compared to a previous forecast of 2.7 per cent, he said.

Anastasiades said that in order for Cyprus to become more attractive for investment in shipping, it gave non-Cypriot companies, which are effectively controlled from Cyprus, the opportunity to opt for tonnage tax without having to register at the company registrar.

In addition, Cyprus is currently considering whether to go immediately ahead with a legislative amendment to "exempt companies benefiting from the tonnage tax system from the obligation to submit financial statements," he said. "It is a measure pushed forward and will have immediate results".

Anastasiades said that "only recently," the tax department issued a circular clarifying that interest revenue of shipping companies benefiting from the tonnage tax system is exempted from the special defence contribution levy.

In addition, Cyprus introduced the "non-domicile" special status in order to attract foreign high-income earners, the president said. "The main incentive these persons get is their exemption from the defence levy on interest, dividend and rent (income)," he continued.

The government has prepared a draft bill to create a shipping portfolio assigned to a deputy minister, "who will be responsible as an independent authority to handle all issues related to shipping," Anastasiades said. "The aim is flexibility in decision making, improving services provided by the government, promoting Cyprus's flag and strengthening cooperation with other private sector stakeholders in an attempt to strengthen Cypriot shipping and establishing (Cyprus) as a modern global shipping services centre".

As part of the authorities' effort to improve services to the shipping sector, Cyprus inaugurated in March a shipping bureau in Piraeus, to strengthen the capacity of the London bureau, and will set up another representation in the Far East, he said.

A solution of the Cyprus problem will help normalise bilateral relations between Greece and Turkey, the European Union and Turkey and Nato, he said.

Source: Cyprus Business Mail