On October 6, 2022, the House of Representatives has unanimously passed the Law on the Limited Liability Shipping Company (the “Law”). The adoption of this legislation constitutes the implementation of Action No. 14 of the Long-Term National Strategy for Cyprus Shipping "SEA Change 2030", adopted in October 2021 by the Council of Ministers. It aims to improve the competitiveness of the Cyprus flag in international shipping, as well as to simplify the procedures and operating regime of Cypriot shipping companies that own Cypriot ships.
The Law provides for the establishment of a one-stop-shop framework for shipping companies. It creates a new type of corporate entity, namely, a Limited Liability Shipping Company (the “LLSC”), with its only purpose the ownership and operation of Cypriot vessels. The structure of the Law is inspired by the basic provisions of the Companies Law, Cap.113 and it includes provisions relating to the incorporation, as well as to the liquidation of an LLSC. However, the Law includes provisions aimed at simplifying various procedures and aspects of Cap.113, as it was drafted to make LLSCs more flexible and attractive.
Moreover, the Law creates a new registry - the LLSC Registry, which will be kept by the Deputy Ministry of Shipping (the “Ministry”) with the Director General of the Ministry being the registrar of the LLSCs. Therefore, in addition to the matters already handled by the Ministry with relation to maritime law, the Ministry will be handling all the matters currently falling within the scope of the Registrar of Companies.
Under the Law, companies owning Cypriot ships that are already registered with the Registrar of Companies may, subject to specific conditions, request their transfer to the LLSC Registry.