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SHIPPING

Under the Cyprus Merchant Shipping Legislation, which was enacted in 1963, a ship can be registered under the Cyprus flag only if more than one half of the shares of the ship are owned by a Cypriot or by a corporation established and operating under and in accordance with the laws of the Republic of Cyprus, and having its registered office in the Republic. The mere holding of shares in a Cyprus shipping company by a foreigner does not disqualify the company, since the company is a legal entity independent of its shareholders.

The procedure of registration in Cyprus of a shipping company is quick and can generally be completed in a matter of days through a local representative. An exchange control approval is required from the Central Bank of Cyprus but this is easily secured if the business entity concerned is wholly owned either directly or indirectly by ali ens and the entity derives all its income from sources outside Cyprus (Offshore companies).

Registration and deletion procedures are quick provided that all the necessary documents are in order. Normally five to seven days are adequate for registration and one to two days for deletion. Cyprus Consuls posted in countries all over the world may issue certificates for provisional registration for deletion and for encumbrances.

In 1992 there were 2.316 vessels totalling 22.993.746 GRT registered in the Cyprus Register of Ships.

The Cyprus Merchant Shipping Legislation provides that no income tax is payable on the profits derived from the operation of the ship registered in the name of a Cyprus company. The dividends paid to the shareholders of such a company are tax exempt and no estate duty is payable upon the inheritance of its shares. Also, no capital gains or other tax is payable upon sale or transfer of the ship or of shares in a Cyprus registered shipowning company.

The interests of mortgagees on Cyprus ships are fully protected under the existing law. This fact has been fully appreciated by all main international Banks engaged in granting loans to ships under the Cyprus flag. There is also no stamp duty on ship mortgage deeds.

A significant number of ship management companies have been established in Cyprus and manage a sizeable proportion of the Cyprus merchant fleet as well as a large number of vessels under foreign flags. One of these companies has established a marine training school in Cyprus, following an agreement with the Cyprus Government, training both Cypriot and foreign seamen.

Since December 1978, the Cyprus Government has been taking a series of measures in order to improve the image of the Cyprus merchant fleet in world shipping circles. Thus, an age limit of 17 years was imposed for the registration of ships and strict requirements have to be fulfilled at the time of provisional registration and at any subsequent transaction.

The Cyprus Government attaches considerable importance to the need for safer ships and improved working and living conditions for their crews. Serious work began a few years ago for the review, updating and codification of the Cyprus Merchant Shipping Legislation and a Law Reform Committee has been set up by the Council of Ministers to propose appropriate legislation.

TELECOMMUNICATIONS

The Cyprus Telecommunications Authority is a Corporate Body established by law and is responsible for the provision, maintenance and development of a comprehensive telecommunications service in Cyprus both nationally and internationally.

The island's link to the outside world comes primarily through 7 satellite earth stations, one digital fibre optic submarine cable system and three analogue submarine cable systems. Today 204 countries, to which 99% of the automatic outgoing telephone traffic is directed, are accessed automatically from Cyprus. Telefax, telex and telegraph services are also available, while two new value added services, audiotex and videoconferencing were recently introduced.

Data transmission service is offered both in Cyprus and overseas using either the public switched telephone network, or point-to-point leased circuits, or via the Packet Switched Public Data Network (CYTAPAC), which uses sophisticated switching technology and ensures reliable and secure transfer of data.

A mobile telephone service with an area coverage of more than 90% of the island and island-wide automatic radiopaging service are also available. Additional facilities include a range of maritime services provided on a 24-hour basis to ships at sea.

The telephone network is being expanded by digital switching and transmission systems which now comprise 65% and 84% of the total capacity respectively.

The density of telephone connections for every 100 population currently stands at about 52 and the figure of 65 is aimed for 1997.

The Authority is planning the introduction of the Paneuropean Paging System (ERMES) in 1994, and the Paneuropean Cellular Mobile Telephone System (GSM) and an Integrated Services Digital Network (ISDN) in 1995. Furthermore, new value added services, such as videotex, electronic mail, message handling system X.400 and voicemail will be offered soon.

In line with its policy of establishing Cyprus as an information hub in the Eastern Mediterranean region and a telecommunications centre of advanced services, CY.T.A. is participating together with fifty-three other countries in the SEA-ME-WE 2 project. This is a submarine fibre optic cable system connecting the Far East with the Middle East and Europe and will be ready for service in the second half of 1994. Additional submarine cable systems of fibre optic technology are also being established which will connect Cyprus with Greece, Lebanon, Syria and Israel. The Cyprus-Israel submarine cable has come into operation in April 1994.

It is evident that the advanced, reliable and efficient telecommunication services offered by the Cyprus Telecommunications Authority, as well as its ambitious plans for the future, place Cyprus among the world's developed countries in this field and render it an ideal business centre in the Eastern Mediterranean and Middle East region.

ISLAND'S NATIONAL CARRIER

Cyprus Airways has been playing a significant part in the island's air communications since 1947, the year during which it was incorporated. The company started operations in April 1948, with three Dakota aircraft, to Europe and the Middle East. During the years that followed the company's fleet grew and new services were added to its network.

This expansion, however, was interrupted in the summer of 1974 following the Turkish invasion. Cyprus Airways operations suffered an extreme setback as a result of the destruction of most of its aircraft at Nicosia International Airport and operations were suspended.

Very few airlines, if any at all, could have faced the grim prospects of surviving without a fleet. The months that followed were a struggle for recovery and reconstruction. While Cyprus Airways was trying to rebuild a fleet, the Government was busy with the construction of a new airport in Larnaca.

On 8 February, 1975 Cyprus Airways resumed operations with two Viscount aircraft. In spite of the grim prospects, Cyprus Airways in a very short time became fully operational with a fleet of four B707 and three BAC1-11 aircraft.

Today Cyprus Airways' contribution to the tourist industry and the island's economy in general, is a very significant one since it provides the necessary link with more that 30 destinations in Europe, the Middle East and the Gulf area, hence an important source of foreign exchange. It has more than 1500 employees.

Cyprus Airways, in close collaboration with the Government and other important bodies such as the Cyprus Tourism Organisation, the Association of Cyprus Travel Agents and the Cyprus Hoteliers Association, undertakes joint ventures for the promotion of Cyprus tourism.

The perfect climate, the sun and sea, the hospitality of the Cyprus people and a large number of archaeological sites combine to make Cyprus the ideal tourist destination. As a result, the number of tourist visitors flown each year by Cyprus Airways is increasing continually. In 1992 the company carried more than one million passengers.

To meet the growing traffic demand, Cyprus Airways renewed and expanded its fleet. Cyprus Airways' fleet is one of the youngest in the world and consists of 4 Airbus A310s and 8 Airbus A320s. There are also 3 BAC1-11s for short-haul flights.

The last few years have been critical for the airline and have demonstrated the need for a complete re-orientation of its goals and nature of operations. Cyprus has applied to join the EC and the demands of the single market and an increasingly liberalised aviation environment requires a more competitive market orientation in both the airline's structure and operations.

This was the main target of the changes in the company. Also a change in livery, staff uniforms and in-flight improvements of food, beverages and service took place. Part of the fleet has also been refurbished.

In 1992, Eurocypria, Cyprus Airways' charter subsidiary started operations. Eurocypria is designed to compete with the ever increasing charter market to Cyprus. Its fleet comprises three new Airbus A320s leased from Cyprus Airways.