CYPRUS Trends and Developments Contributed by: Adam Montanios and Nicolas Montanios, Montanios & Montanios LLC
has adopted most international shipping con - ventions. Ship Registration Pursuant to Cyprus merchant shipping law, there are two types of ship registration in Cyprus: • ownership registration (provisional and per - manent); and • bareboat charter (parallel) registration. Such registrations are effected by the Cypriot Registrar of Ships at the Shipping Deputy Min - istry. When a vessel is not in a Cypriot port at the time of her registration, it is also possible for pro - visional (ownership) registration to be effected through a Cypriot maritime or consular office abroad (by specific authority of the Registrar of Ships). However, permanent registration and parallel registration can only take place at the Registrar’s office in Limassol, Cyprus. A ship may be registered with the Register of Cyprus Ships if: • more than 50% of the shares in the ship are owned by a Cypriot citizen or a citizen of any other EU/EEA state; or • 100% of the shares in the ship are owned by a Cypriot or EU/EEA company, or by a third- country company controlled by Cypriot or EU citizens (on certain special conditions). Furthermore, a vessel may be registered in par - allel under the Cyprus flag, provided that she is bareboat chartered by a person or entity quali - fied to own a Cyprus-flagged vessel, as per the above-mentioned requirements.
Most types of vessels of up to 20 years of age are registrable under the Cyprus flag, while old - er vessels can only be registered under certain conditions or additional requirements. Related details are contained in the Government Policy on the Registration of Ships, the current version of which is available on the website of the Shipping Deputy Ministry. Vessel Mortgaging A Cyprus-flagged vessel may be mortgaged as security for a loan to the vessels’ owning com - pany or for the obligations of a third party. The instrument creating such mortgage must take one of two statutory forms: that of secur - ing “Principal Sum With Interest” or an “Account Current” (the latter being used in the vast major - ity of cases). A collateral deed of covenants dealing with all matters relating to the mortgage must be attached to such mortgage instrument. The mortgage instrument must be signed by the ship-owner/mortgagor and the deed of cove - nants by both the mortgagor and the mortgagee. A Cypriot statutory mortgage must be filed for registration in the Register of Cyprus Ships (either directly at the Shipping Deputy Ministry or through a Cypriot maritime or consular office abroad – on the instructions of the Shipping Deputy Ministry), and its priority is determined in accordance with the date and time of such registration. If the owner/mortgagor is a Cyprus registered company, such mortgage must also be regis - tered at the Companies’ Registry as a charge against such owning company.
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