The New Era of Shipping

Business
DUE TO THE FAVOURABLE ECONOMIC BENEFITS, THE ATTRACTIVE LEGAL FRAMEWORK, THE PROGRESSIVE DEVELOPMENT OF INFRASTRUCTURE AND CYPRUS’ KEY GEOGRAPHICAL LOCATION, EXPECTATIONS ARE HIGH FOR THE FUTURE OF SHIPPING.

Given the pace of globalization, the renewal of shipping infrastructure in Cyprus is more vital to its commerce than ever before. Cyprus’ integration into the EU, combined with the installation of new infrastructure and leadership, has led to rapid modernization. Riding this “wave of change” are the Deputy Ministries of Shipping and Tourism, offices that are pushing infrastructure and commerce to the forefront.

Sector Developments

In its first years of operation, the Shipping Deputy Ministry took major steps to attract new business from leading industry magnates, thus increasing the level at which the Cypriot register competes. Today, the fleet exceeds 23 million tons of tonnage. The number of companies incorporated into the registry and the special tax regime for shipping, has increased from 168 to 243. The Ministry has also strengthened human resources. The fleet now employs 55,000 onboard crew in addition to 9,000 employees. The industry’s contribution to the national GDP is a remarkable 7%, while 3% of the active labour force in Cyprus is employed by the broader shipping industry.

Of utmost importance is the special tax regime for shipping, investments in human resources and their expertise, and the 24-hour services offered by the Shipping Deputy Ministry. Moreover, the continuous improvement of those services by way of new digital technology and active participation in international shipping events have been successful driving forces for the industry. Based on these factors, the shipping sector will undoubtedly prove to be an important factor in the future growth of the economy.

The Οcean-going Shipping Companies and the Solid Cypriot Register

 The Cypriot Register is being modernized to attract large companies to the island for their base of operations. Measures such as the revision of the registration’s pricing policy, the abolition of initial registration fees for ocean-going vessels, the simplification of registration procedures, and a revision of the ship registration policy, have been the main contributing factors in this development. The implementation of these strategies has resulted in the registration of almost 100 new ships during the last 2,5 years or so, with an obvious developing trend toward further, dynamic reinforcement of the register in the near future.

The recent approval for an extension of the shipping tax regime until 2030 within EU guidelines for state aid in maritime transport will also play a key role in efforts to grow in the industry. This extension will substantially contribute to the strengthening of Cyprus’ position as a shipping centre. An increase in shipping companies based on the island is expected. To remain a leader in such a fast-moving industry, the country’s strategy must evolve to facilitate constant revisions to planning. Thus, the deputy minister has already taken concrete steps to keep Cyprus at the forefront of maritime developments, including:

  • Utilisation of a new identity and improvements to effectively showcase and promote Cyprus’ maritime network.
  • Enhanced participation in international shipping exhibitions and conferences.
  • Strengthening the competitive advantages in other sectors of shipping, such as the yacht sector.
  • Incentives for newly-built ships that meet recent environmental standards, or ships with reduced Energy Efficiency Design Index (EEDI).
  • A stronger presence and active participation in the formulation of European and global shipping policies.
  • Strengthening international relations and cooperations with the industry’s leading nations to ensure mutual growth and success in the industry.
  • Further automation and upgrades to existing systems, as well as the adoption of new applications and modernized procedures in the Deputy Ministry of Shipping.
  • Promoting maritime technology and innovation through partnerships and initiatives with the Cyprus Marine and Maritime Institute (CMMI).

The Cruises

Cyprus’ geographical position is a unique competitive advantage for special shipping sectors as well (for example, cruise ships). The constant, steady growth achieved these past years has suffered significantly due to the pandemic. However, interest remains high and prospects for the year ahead look good. The goal is to establish Cyprus as one of the top cruise destinations in the Mediterranean alongside Greece, Italy, Malta, Israel, and Egypt. This includes operations and accommodation for large cruise ships at Cyprus’ port of calls.

The newly formed Deputy Ministry of Tourism is negotiating incentives to attract cruise lines to utilize Cypriot ports as launching points for cruises in the Mediterranean and beyond. These incentives will be both financial and qualitative. An international advertising campaign is underway targeting the cruise industry, travel agents, and travelers. Finally, efforts are underway to synergize with neighbouring countries to strengthen tourism in the area for the mutual benefit of everyone. 

Until a few months ago, prior to the pandemic, a significant increase was noted in the number of ships that made a port of call in Cyprus during their routes in the eastern Mediterranean. Unfortunately, the pandemic stymied these numbers. Nonetheless, the figures forecast for 2021 look promising, with the cruise lines Royal Caribbean, MSC, Costa, Silversea, Norwegian, Tui, Aida, Holland America, and Carnival intending to make a port of call in Cyprus. Aside from the port of Limassol that can already accommodate large ships, the creation of an infrastructure in Larnaka, Pafos, and Ayia Napa is proceeding at a fast pace.

New Marinas and Infrastructure

 There is significant growth in developing marinas for the reception, service, docking, and maintenance of recreational yachts.

  • Limassol Marina: +/- 1,000 boat capacity (650 berths at sea, 350 berths for repair, maintenance, and storage at the boatyard) –capacity to accommodate mega yachts up to 115 meters– complete development including housing conjoined with docking berths for yachts.
  • St. Raphael Marina, Limassol: in operation since 1986 –mooring capacity of 237 boats up to 30 meters long with draughts of 4 meters– private development by St Raphael Hotel.
  • Ayia Napa Marina: currently under construction: +/- capacity of 600 boats, capacity to accommodate 85-meter mega-yachts- a colossal project to include luxury housing, shopping, and amenities for residents and visitors.
  • Paralimni Marina: +/- capacity of 300 boats –under construction– residential and commercial developments projected to be complete by the summer of 2021 (Delays are expected due to the pandemic).
  • Pafos Marina (planning stages) –a future declaration as an official entry point of the Republic– anchorage for large cruise ships –estimated capacity of +/- 1000 boats– to include commercial, business, and residential developments.

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