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Cyprus back into shipping

Cyprus is back. Decisive reforms, prudent fiscal management, hard work and the peoples' determination have seen the country exit earlier than expected from the economic adjustment programme instigated by the its creditors.

“We can proudly – once more – connect Cyprus to growth and potential. The Cypriot economy is emerging stronger and stands ready to face current challenges, utilising its full potential,” the country’s president Nicos Anastasiades declared in New York on 22 March.

He said the state has gained access to lending with interest rates which are now at historically low levels, as a result of continuous upgrading of the economy by international rating agencies. The banking sector has also now been restructured and recapitalised mostly through private funds, becoming smaller with more effective management and supervision and the shipping and tourism sectors are again flourishing.

Addressing the Capital Link Invest in Cyprus Forum, Anastasiades said: “Already in 2015 the Cyprus economy had recorded a positive growth rate of 1.7%. For 2016 growth was at 2.8%, one of the highest in the European Union. Most importantly this growth rate is expected to stay at this level for the next few years.”

Anastasiades said that despite the economic difficulties faced, Cyprus’ comparative advantages “not only remain intact, but have been further enhanced and expanded, setting them apart from most investment destinations”.

He said Cyprus has one of the lowest and most competitive corporate tax rates in Europe at 12.5%, “deeming it an attractive investment destination, and a highly competitive centre for international businesses, offering a platform for operations and preferential access to markets like Europe, Middle East, North Africa and Asia”.

Marios Demetriades, Cyprus’ communication & works minister, said shipping is an invaluable asset for Cyprus with significant political and economic advantages. “Despite the international adverse economic conditions, the Cyprus shipping sector has managed to maintain its competitiveness and grow further," he said.

Demetriades said Cyprus “managed to maintain a high quality fleet through the implementation of all internationally applicable safety, security and environmental protection standards”.

“Currently, Cyprus shipping offers a wide range of fiscal and economic incentives, including competitive ship registration costs and annual tonnage taxes, ensuring the fleet's worldwide competitiveness,” he said. “On the logistics side, Cyprus fulfils all criteria to become a trade hub in the region, due to its strategic location. This particularly applies in relation to the latest developments in the energy sector in Eastern Mediterranean and the need of companies to be based out of a stable country in the region like Cyprus.”

Andreas Hadjiyiannis, president of Cyprus Sea Lines and of the Cyprus Union of Shipowners (CUS), said the CUS is “committed to the further development and growth of the Cyprus flag and to Cyprus attracting more business and investment to the wide range of opportunities that our country offers”.

Columbia Shipmanagement managing director Andreas Hadjipetrou said the fact the company is headquartered in Limassol shows “Cyprus can be a hub for international shipping businesses to grow”. He noted “it is estimated 20% of the global third-party ship management fleet is controlled from Cyprus employing around 4,500 highly qualified personnel and 55,000 seafarers.”

Hadjipetrou said: “Historically the governments have been supportive of the maritime cluster and this has resulted in the innovative tonnage tax system and superb local expertise.”

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