On 6th October 2022, the House of Representatives unanimously passed a law providing for the establishment of a one-stop-shop framework for shipping companies, “the Shipping Limited Liability Company Law, of 2022” (the S.L.L.C. Law). The S.L.L.C. brings Cyprus a step closer to the Strategic Vision for Cyprus Shipping (SEA Change 2030).
The Parliamentary Committee on Transport, Communications and Works states in its report that the main purpose of the S.L.L.C. is to create a new type of corporate entity, called a Shipping Company of Limited Liability, which will be established as a limited liability company with the sole purpose the ownership and operation of Cypriot ships. The one-stop-shop aims to simplify the procedures and streamlining operational processes in the Cypriot ship-owning industry. At the same time, the S.L.L.C. Law intends to ensure that the Cyprus flag remains a competitive and appealing flag not only in the European but also in the international regime.
For a company to be considered and consequently to be registered as a S.L.L.C. by the Registrar of S.L.L.C., it must own and operate vessels that are registered provisionally and eventually permanently under the Cyprus flag and/or vessels that are registered parallel-in or parallel-out under the Cyprus flag.
Scope of application:
The S.L.L.C. Law is solely applicable to Cypriot ship-owning companies that:
- Are formed and registered under the S.L.L.C. Law, or
- Are already formed and registered under CAP. 113 in the Registry of the Department of the Registrar of Companies and transfer their ship-owning companies in the Registry of S.L.L.C.
Statutory limitations:
Prior to the formation of a S.L.L.C., it is important to have in mind statutory limitations that affect the formation, registration, and structure of the company.
The appointment of the secretary of a S.L.L.C. is subject to limitations and restrictions. To be more precise, based on article 79 (1) of the S.L.L.C. Law, a S.L.L.C. needs to have one appointed secretary who is a lawyer in the profession. However, in cases that the S.L.L.C. has a sole shareholder, the sole director, could also be the secretary of the company alongside with the already appointed secretary.
Competent authority for the S.L.L.C.
To achieve the ‘one-stop-shop’ framework, the Law establishes the Registry of S.L.L.C. As per Article 6 of the S.L.L.C. Law, the Permanent Secretary of the DMS, as the Registrar of S.L.L.C., will be the competent authority for the S.L.L.C. from their formation to their liquidation. Simultaneously, the DMS will continue to provide to shipowners its already existing maritime services, since it remains the competent authority to deal with maritime requests, such as provisional and permanent registration of a vessel under the Cyprus flag, change of ownership of a vessel, deletion of the vessel from the Cyprus flag etc. Thus, the ship-owning companies, their officials and their shareholders will now be able to have access to services and information regarding (i) the registration of their company and (ii) their vessels, from the same governmental authority/portal.
Our experience in Corporate Law and Maritime Law enables us to provide to our clients with complete legal and commercial picture.
For further information, please contact Mrs. Despina Constantinou at despina@mouktaroudes.com or Mrs. Efi Hadjistylli at efi@mouktaroudes.com.
