The Shipping Limited Liability Company Law of 2022 (SLLC Law) was introduced in Cyprus in October 2022.
This law established a new legal entity, the Shipping Limited Liability Company (SLLC), with the sole business purpose of owning and operating vessels under the Cyprus Flag.
The new SLLC Law creates a specialised framework for ship-owning companies with vessels under the Cyprus Flag, introducing simplified and more straightforward procedures for the company’s day-to-day operations.
Main Provision of the SLLC Law & Comparison with the Companies Law (Cap.113)
Shipping Limited Liability Companies Law (161(1)/2022) | Companies Law (Cap. 113) |
Under the SLLC Law, “very small” SLLCs are exempted from the obligation to publish their financial statements, while “small” SLLCs are only required to publish their balance sheets | Companies under Cap. 113 are obligated to publish their financial statements |
The amendment of the Company’s Memorandum can be effected without a court order, provided that certain conditions under the SLLC Law are met | The amendment of a Company’s Memorandum requires a court order to effect such changes |
The reduction of an SLLC’s share capital can be effected without a court order, subject to the conditions specified in the SLLC Law | The reduction of a Company’s share capital requires a court order under Cap. 113 |
SLLCs are required to appoint lawyers to the position of Company Secretary | No such requirement exists under Cap. 113 |
A dedicated Register of SLLCs has been created and is supervised by the Deputy Ministry of Shipping (DMS), which also acts as the Registrar of Cyprus Vessels. The DMS is responsible for maintaining the SLLCs Register as well as the Register of Charges and Mortgages | The Registrar of Companies is the supervisory authority for the registration of business entities and maintenance of an updated business entities’ register under Cap. 113 |
It is important to note that all companies currently registered with the Registrar of Cyprus Companies that own Cypriot vessels may apply to be transferred to the new SLLC Register, provided certain conditions are met.
The purpose of this legislation is to enhance the competitiveness and attractiveness of the Cyprus Flag in the international shipping industry. The Law also reduces administrative and court procedures by enabling electronic submissions and document issuance.
The Republic of Cyprus is a highly advantageous jurisdiction for shipping activities, attracting shipowners from around the world. Cyprus boasts the 11th largest fleet globally and the 3rd largest fleet in Europe, offering tax privileges and a strategically important location for shipping operations.
For more information, please feel free to contact any member of our team at info@pelaghiaslaw.com.
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