At least 42 Greek shipping firms have emigrated to Cyprus and entered the island republic’s commercial registers, according to statements from the president of the Limassol Chamber of Commerce and Industry, Costas Galatariotis, as a number of shipowners are trying to ensure they hedge themselves against a likely tax hike in Greece.
A number of the above shipping firms have already got down to business in Cyprus, opening bank accounts and leasing offices. The city of Limassol is the largest ship management service center in the European Union, hosting over 130 companies that operate internationally.
This trend for relocation from Greece to Cyprus has started bearing fruit for the Cypriot economy. According to data released by the Central Bank of Cyprus concerning the first half of this year, revenues from shipping activities expanded by 9.3 percent from the second half of 2014 to reach 464 million euros. The central bank reported that one reason for this growth is that Cyprus has become more attractive to Greek shipowners. Data show that Greek shippers’ contribution to the country’s revenues from the sector expanded from 2 percent in the first half of 2014 to 6 percent in the January-June 2015 period.
With this in mind, the Cypriot government is trying to make the most of this trend by making it easier for Greek firms to make the transition. It is already preparing a new bill that will exempt the children of shipowners who relocate to Cyprus from military service in the Cypriot National Guard. This exemption will only be granted to shippers who relocate their company as well as their family to Cyprus.
Last week Spyros Danellis, a Greek MP with the Potami party, tabled a question in Parliament concerning the flight of Greek shippers to Cyprus. He cited Bank of Greece data showing that many shipowners have changed the flow of the foreign currency they receive toward foreign banks due to the capital controls that continue to hamper the inflow of capital. This means that not all of the foreign currency from shipping arrives in Greece via Greek lenders.