Archive for October, 2015

Overview of the Greek Private Company

Law 4072 of 2012 (the “Law”) introduced in Greece a new type of company, the Private Company (“PC”) (“Idiotiki Kefalaiouchiki Etaireia” or “IKE” in Greek) in order to meet the growing need for a modern and flexible limited liability middle- sized company.

After three years since its creation, the Private Company may be characterised as a success with the establishment up to this day of over 10000 Private Companies since 2012 and a clear preference of businesses to choose this type of company over the pre- existing structures, according to an announcement of the Ministry of Development in April 2014.

ADVANTAGES OF THE PRIVATE COMPANY IN RELATION TO OTHER TYPES OF GREEK COMPANIES

  • Zero capital requirements.
  • Quick establishment with minimum expenses (as usually the involvement of a Notary is not required) and simplified procedure.
  • Provided the Articles comply with the requirements of the Law, they may be drafted accordingly to suit the particular needs of a type of business as well as of its members, enabling the company to be shaped either closer to a partnership or closer to a Societe Anonyme.
  • Very flexible corporate form (meetings can be held through teleconference and abroad, any amendments and changes are made by a private agreement).
  • Corporate documentation may be drafted also in any official EU language.
  • Only the manager and the sole member (in case of a single- membered PC) are subject to compulsory registration at the local insurance organisation (as opposed to all members/ partners in other types of companies).

To read full text in English and/or Russian please click on the links below.

PRIVATE COMPANIES (IKE) ENG                                                                                 PRIVATE COMPANIES (IKE) RU

 

 

Revalidation of Cyprus Certificates of Competency further to the International Convention of Training, Certification and Watchkeeping for Seafarers STCW 78, as amended.

Further to the 2010 Manila Amendments of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, (STCW 78 Convention), the Ship Registry has issued on the 14th October 2015 a Circular which provides for the Revalidation of Cyprus Certificates of Competency (CCoC).  The Convention will be in force after the 31st December 2016.

Following the relevant enforcement date, the masters and deck officers, holders of CCoC, who wish to revalidate their Certificates of Competency (CoC) must: have training in Ship Simulator, Bridge Teamwork (BRM) and in ECDIS and present the relevant certificates issued by the Republic of Cyprus. In addition, they must undergo refreshing courses or full courses training, accordingly, at training centers approved by the Republic and present the appropriate certificates (DMS Circ. 09/2015).

Similarly, Engine officers, holders of CCoC, in order to revalidate their CoC must: have training in Engine Room Simulator (ERS) and in High Voltage and present the relevant certificates issued by the Republic of Cyprus and must undergo refreshing courses or full courses training, accordingly, at training centers approved by the Republic of Cyprus and present the appropriate certificates of proficiency issued by the Republic of Cyprus.

All the certificates that are issued by the Administration of a Country whose certificates of competency are recognized by the Republic of Cyprus will be accepted in lieu of the aforementioned certificates.

The aforesaid trainings are ONLY required for the revalidation of CCoC after 31 December 2016.  Masters and officers presenting the above mentioned certificates may apply for a renewal of the CCoC for a period not exceeding five years from the date of the previous revalidation without the need for any additional requirement for exams and sea service.

The Iranian opportunities post-sanctions: the Cyprus IP Box regime, the Cyprus-Iran Double Tax Treaty and the potentials that lay ahead

On the 14th of July 2015, Iran and the Permanent Members of the UN Security Council and Germany reached a historic agreement. The sanctions imposed on Iran for its nuclear activities were lifted after the agreement of Iran to gradually limit such activities.

Iran, the economy of which suffered its greater blow in the years following 2012, especially after the foreign direct investments in the country reached zero, is now able to return to the global markets.

The omens of an early financial recovery are, prima facie, impressive, whilst the impact on the global economy is anything but negligible. It is said that Iran will be able to recover in its pre-2012 position in less than two years-time.

Iran is one of the main oil-producing countries. Its production capabilities reach 1 billion barrels per day, whilst its stockpiles reserves are said to reach 30-40 million barrels on the day immediately following the lift of the sanctions. This effectively means that Iran will cause a reduction in the oil prices by 14%, i.e. USD 10, therefore large oil importers such as EU and US will be in a more advantageous position by having the capability to increase their petrochemical-related productions.

As oil-exports in Iran are reinstated, the country’s economic orbit will also start functioning again. This, in addition to the USD 107 billion worth of frozen assets and the USD 15 billion of revenue expected to be produced in Iran in the first year of sanction lift, will allow Iran to boost the sectors which were most profitable prior to 2012. Therefore, it is expected that Iran will boost its automobile, pharmaceuticals, manufacturing and tourism, banking and other services sectors. It has also been suggested that Iran should increase its competitiveness in high-technologies industries and the telecommunications sector, in an effort to modernise the same.

Cyprus – Iran cooperation: the cooperation potentials

The lift of the sanctions in Iran as well as the industries constituting the pillars of Iran’s economy, create important prospects of economic prosperity both for Iran as well as its’ trading partners. Cyprus, being in the forefront of this recent historic development, concluded, on the 4th of August 2015, an important cooperation agreement with Iran, namely the double tax treaty agreement (“DTT”).

The DTT effectively provides for favorable taxation of, inter alia, royalties and dividends.

Royalties are taxed at a fixed rate of 6% whilst the provisions on dividends distinguish between companies the beneficial owner of which holds at least 25% of the issued and allotted capital of the company that pays the dividends, and other cases. In relation to the former, the withholding tax rate is 5% whilst in all other cases is 10%.

Regarding dividends, it is important to note that, currently neither Iran nor Cyprus imposes withholding tax on dividends (the treaty rates will only apply in the event where the relevant legislation of either or both countries imposes such tax).

The provisions of the DTT constitute important incentives for the promotion of cooperation between the two countries, especially if viewed in light of the provisions of the Cyprus IP Box Regime, considered below.

The Cyprus IP Box Regime- the time is now

Intellectual property rights have already been widely recognised as the most valuable asset of a business. The same was recognised in a flamboyant manner by the Cyprus authorities in 2012, when the IP Box Regime was introduced. The IP Box Regime applies to all intellectual property rights and allows Cyprus companies which are the owners of intellectual property rights to be 80% exempted off withholding tax applying on the exploitation and disposition of such intellectual property rights as well as make use of a five year amortization period in respect of the acquisition of such rights.

Cyprus elected to opt for an IP Box the purpose of which was to attract new investments. Therefore the same does not restrict its application to companies that have borne the research and development costs. Nonetheless, the IP Box regime will be gradually forced to extinction, pursuant to the OECD Nexus Approach policy. Pursuant to the same IP Boxes should turn towards the promotion of research and development and not towards investment attraction. Therefore, the final call for applicants wishing to exploit the advantages of the IP Box regime is the 30th of June 2016. This date is considered as the lock down date, since no further entrants will be accepted whilst current entrants will not be allowed to exploit any additional intellectual property rights. The IP Box regime, as it currently stands, will continue to apply to existing entrants only, until the 30th of June 2021.

Geographical Proximity: a leap into Europe

It is no secret that Cyprus’ geopolitical position, the same being in the Mediterranean Sea and the crossroads of three continents, i.e. Europe, Asia and Africa, is a pole of attraction for many businesses around the globe.

Similarly, the island is expected to attract Iranian businesses as well as businesses wishing to do business in Iran. Apart from the many legislative and fiscal advantages some of which have already been mentioned above; the island is also a Member of the European Union as from the 1st of May 2004. This, in addition to the fact that Cyprus is in the center of some of the most important trade partners of Iran, namely Britain, Turkey and Saudi Arabia as well as in good terms with countries such as China (currently the most important trading partner of Iran) and India are expected to boost the potentials of the cooperation between Cyprus and Iran.

The Intellectual Property Rights Aspect

Iran provides for immense opportunities in the field of intellectual property, the reason being that Iran’s economy is based on sectors such as the automobile, pharmaceuticals, manufacturing and service provisions. Considering that the majority of its economy depends on exports into, inter alia, Europe and the US, it may be argued that the need for community and international trademarks, patents and pharmaceutical product certificates, copyrights and trade secret protection, branding, marketing and product advertising as well as corporate restructuring and fiscal advise is expected to be in high demand in the near future. Cyprus, offering the advantages already mentioned herewith, is undeniably ideal both in terms of geographical positions as well as in terms of legislative framework.

The DTT between Cyprus and Iran triggered the unfolding of the Cyprus legislative framework, jurisdictional advantages and the ability of the same to assist in Iran’s reinstatement in the global markets.

As far as intellectual property rights are concerned, the industrial activity of Iran, being export-depended, and the European flair of Cyprus, in conjunction with the recent advantages introduced by the DTT as well as the IP Box regime prove that the cooperation potentials between Iran and Cyprus are more than the wishful thinking of two Economy ministers.

CYPRUS AND MALTA YACHT LEASING SCHEMES: A COMPARISON

Frequently, questions arise as to the comparison between the Cypriot and the Maltese Yacht Leasing Schemes. Although the principles on which both schemes are based are the same, there are some practical differences which may lead one to choose the one over the other.

We trust that the attached comparison will be a useful tool in order to understand these differences.

Christodoulos G. Vassiliades & Co LLC may assist with the implementation of the scheme in either jurisdiction.

Should you have any further questions or require any further assistance, please feel free to contact us.

Cyprus v Malta Comparison Guide

The Application of Regulation (EU) No 1257/2013 on ship recycling.

The EU Regulation No. 1257/2013 on ship recycling was issued on the 20th November 2013 and even though the Regulation is already in force, it will only be applicable in Cyprus not later than the 31 December 2016 when the European List of Ship Recycling Facilities (European List) is published.  Nonetheless, by virtue of Article 32, the Regulation will be applicable:

  1. from the earlier of 6 months after the date that the combined maximum annual ship recycling output of the ship recycling facilities included in the European List constitutes not less than 2,5 million light displacement tonnes (LDT); or
  2. on 31 December 2018, but not earlier than the 31 December 2016.

Moreover, Articles 2, 5(2), 13, 14, 15, 16, 25 and 26 are applicable from the 31 December 2014 whereas Article 5(2)(1) and (3) and Article 12(1) and (8) will be applicable from 31 December 2020.

The Regulation is applicable to European Member States flagged vessels of 500 gross tonnage and more, engaged in international voyages, and specific provisions of the Regulations are applicable for non-EU flagged vessels, calling at a port or anchorage of a Member State.

The Regulation provides for the prohibition and restriction of both the installation or use of Hazardous Materials (HM) on the ships as referred to in Annex I of the Regulation.  The Inventory of Hazardous Materials (IHM) will be ship specific, developed in accordance with the relevant IMO guideliness and will require the verification of compliance issued by a Recognised Organization (RO).  The IHM will consist of 3 parts, namely: materials contained in ship structure or equipment;   list of operationally generated wastes; and stores.  The first part has to be properly maintained and updated throughout the operational life of the ship while the last two parts have to be incorporated in the IHM prior to recycling.

With regard to new ships[1] the IHM has to be on board before entering into service after the the date of effective application, the latter expected to be anytime between the 1 July 2016 and 31 December 2018.  The IHM in this instance shall at least contain the identity, location and approximate quantities of the hazardous materials of the structure or equipment of the ship referred to in Annex II.

With regard to existing ships they must, as far as possible, have both an IHM onboard from 31 December 2020, identifying at least the hazardous materials under Annex I, and a plan describing the visual or sampling check by which the IHM is developed.

With regard to ships destined for recycling, an IHM is required from the date of the publication of the European List.

With regard to non-EU flagged vessels, when calling at a port or anchorage of a Member State, an IHM is required on board from the 31 December 2020.  The IHM shall be ship specific and prepared in accordance with the relevant IMO guidelines and serve to clarify compliance of the ship with Article 12(2).  The IHM shall be also supplemented by a Statement of Compliance.

All foreign flag ships calling at Cyprus ports and anchorages will be subject to Port State Control inspections aiming to ensure compliance with the provisions of the Regulation.   Any ships that fail to comply with the Regulation may be warned, detained, dismissed or excluded from the ports or offshore terminals under the jurisdiction of the Republic of Cyprus.

With regard to Cyprus flagged ships, special surveys have to be carried out by ROs authorized by the Republic of Cyprus, in consideration of the relevant IMO guidelines and resolutions.  The surveys are:  an initial survey before the ship is put in service or the inventory certificate is issued (regarding existing ships, an initial survey will be conducted on 31 December 2020); a renewal survey at intervals not exceeding five years; an additional (general or partial) survey conducted upon owner’s request following any modification or repair done affecting the IHM; and a final survey prior to the ship taken out of service and before the beginning of the recycling (regarding existing ships destined for ship recycling, the initial and final survey may be conducted concurrently).

An Inventory Certificate will be issued by the RO upon successful completion of the initial or renewal survey, supplemented by Part I of the inventory of hazardous materials.  The Inventory Certificate shall be endorsed at the request of the ship owner by the RO following a successful additional survey.  Where the initial and the final survey are conducted at the same time, only the ‘Ready for Recycling Certificate’ shall be issued.  The Inventory Certificate will be valid for a maximum five (5) years period.

A Ready for Recycling Certificate is issued prior to recycling after the successful completion of a final survey.  This Certificate has to be accompanied by the IHM and the Ship Recycling Plan which is prepared by the operator of the ship recycling facility.  The Ready for Recycling Certificate will be valid for a maximum three (3) months period (which can be extended for a single point to point voyage to the ship recycling facility) and shall cease to be valid if the condition of the ship does not correspond substantially with the particulars of the Inventory Certificate.

With regard to owners of Cyprus flag ships, they shall ensure that the ships are only recycled at ship recycling facilities that are included in the European List.

[1] Ships whose building contract, keel laid or delivery is places on or after the date of effective application, the latter expected to be anytime between the 1 July 2016 and 31 December 2018