Maritime activities are governed by the Merchant Shipping Laws which are largely based on corresponding British legislation. The island has also ratified the international conventions on maritime safety, prevention of pollution of the sea and training and certification of seafarers. Cyprus is a member of the Council of the International Maritime Organization which reflects the importance of the island in international shipping.

A non-resident may register a ship under the Cypriot flag by forming a company with the permission of the Central Bank and by transferring the ownership of the ship to the Cypriot company. The procedure for registering a shipping company may generally be completed in a matter of days through an appropriate professional. Shipping companies owned by non-residents and deriving their income from sources outside Cyprus are exempt from exchange controls.

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The Department of Merchant Shipping of the Ministry of Communications and Works is the appropriate authority for the registration of ships. Its responsibilities include safety administration, training and certification, international relations and shipping legislation. Government policy provides for the registration of ships which do not exceed 17 years of age. Vessels of any type and tonnage between 18 and 23 years of age may also be registered subject to certain conditions.

The provisional registration of any ship under the Cypriot flag may be effected at any place abroad where Cyprus has a Diplomatic Mission or a Consular Post. The permanent registration of a provisionally registered vessel must be completed within nine months, including a three month extension. For this purpose the vessel must be surveved and measured by any one of the classification societies recognized by the Government of the Republic. Cyprus recognizes all the major classification societies.

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In accordance with the law on parallel registration, ships bareboat chartered to Cypriot companies may be registered under the flag of the Republic for the period of the charter provided that the legislation of the foreign flag state permits it and the owners and the morgagees give their consent. Cypriot registered vessels may be registered in parallel in a foreign registry under the same conditions which must be satisfied for the parallel registration of foreign ships in Cyprus. All mortgages on Cypriot ships, except those of vessels registered in parallel, have to be registered in the Cyprus Register of Ships. Registered mortgagees are fully protected and no transaction affecting the registry status of a ship is effected without the written consent of the mortgagees. Furthermore, no certificate of deletion from the Cyprus Register is issued unless all registered encumbrances have been discharged.

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