By: N. Pirilides & Associates LLC
On the 6th of October 2022 the House of Representatives unanimously passed a new legal initiative soon to be made into the latest law surrounding shipping and the maritime industry in general, known as “Law on the Limited Liability Shipping Company (LLSC) of 2022”.
Crowned as the 14th of 35 actions of a “one-stop-shop” framework set out in the SEA CHANGE 2030 strategy, the law aims to create a new type of corporate entity called “Limited Liability Shipping Company (LLSC)” which shall be established as a limited liability company whose sole objective will focus on the ownership and operation of Cypriot ships.
While the competent authority for any legal entity in Cyprus is currently the Department of Registrar of Companies and Intellectual Property, the new law provides that the newly created LLSC will be moderated by the Deputy Ministry of Shipping along with other matters that fall within the scope of maritime law.
The distinction in competent authorities between LLSCs and the traditional type of limited liability companies derives from the very fact that the shipping industry is taxed differently. Thus, rendering the traditional registrar of companies perhaps unfit to handle, inter alia, the establishment of LLSCs. As the Cyprus Shipping Deputy Minister, Vassilis Demetriades noted, shipping companies operate under tonnage law and “are not subject to the same rules that other companies are under the Tax Department.”
The new law regulates the procedure of setting up LLSCs and everything in between up to their possible liquidation. In regard to structure, while LLSCs’ is broadly speaking, similar to that of typical limited liability companies as set out in CAP.113, noted shall be that the provisions of the present are significantly simplified in an attempt to attract interested parties.
What could also be considered advantageous by many, is that subject to specific requirements and conditions, the law also provides for a choice of transfer to the new LLSC Registrar of already registered Cypriot ships.
The significance that this law encompasses within for the shipping industry in Cyprus is undisputable, with many within the industry calling this overdue. A field which has become a prime source of income of Cyprus and which consequently put Cyprus on the map in a number of ways, is now given the necessary space and resources to grow further and bring more shipping traction to the island by making it “faster, more efficient and more competitive.”
Our Law Firm is fully equipped and ready to support and guide you in all matters relevant to registering your Shipping Company under the new law, thus making it a Limited Liability Shipping Company for owning and operating Cypriot ships. Including, of course, the transferring of any Cypriot ships already registered in the existing Registrar to the new Registrar solely for LLSCs, where applied.
For any queries, please do not hesitate to contact us and we will be happy to assist.
