On the 6th of October 2022, the Cyprus Shipping Deputy Ministry (SDM) announced the passing of the new “Law on the Shipping Limited Liability Company” of 2022 (the “SLLC Law“) as approved by the House of Representatives.
This new legislation is one of the steps taken towards the implementation of the long-term national strategy for Cyprus Shipping “SEA Change 2030”. Particularly, it implements Action with number 14 of the said strategy, as adopted by the Council of Ministers in October 2021.
This long-term strategic vision for Cyprus shipping, “SEA Change 2030”, is the outcome of a collaborative process, with input from internal, local and international stakeholders. It contains 35 individual actions to deliver sustainable progress for shipping categorised under three main pillars: Sustainable, Extrovert, and Adaptable. Its aim is to improve the competitiveness of the Cyprus flag in international shipping, as well as to simplify the procedures and the operating regime of Cypriot shipping companies that own Cyprus-flagged vessels.
The SLLC Law creates a new form of limited liability company, the “Shipping Limited Liability Company” or the “SLLC”, having as sole purpose to own and operate ships under the Cyprus flag.
The new law regulates the procedure from the setting up and registration of the SLLCs to their liquidation. It also establishes the Department of the SDM as the SLLCs’ Registrar being the competent authority. The Department will be supervised by the SDM while the SDM’s General Director, as appointed from time to time, who by law is also the Registrar of Cyprus-flagged vessels, will also act as the SLLCs’ Registrar.
The ultimate aim of this new legal framework is to create a one-stop-shop framework for ship-owning companies and their shareholders within the SDM so that the SDM can deal, in addition to the aspects of maritime law, with all matters which currently fall within the competence of the Cyprus Registrar of Companies.
The structure of the SLLC Law is inspired by the main provisions of the Companies Law, Cap. 113 (the “Companies Law“). Nonetheless, it includes simplified provisions aiming to simplify various procedures and aspects and thus to make the establishment of an SLLC more flexible and attractive to the interested parties. The new SLLC Law empowers shipping companies that own Cyprus-flagged vessels and which are already registered with the Cyprus Registrar of Companies to request their transfer to the SLLCs Registry, subject to specific conditions. Importantly, a main difference with the Companies Law is the requirement for SLLCs’ secretary to be a lawyer and to effectively perform such duties pursuant to the provisions of the SLLC Law.
Michael Kyprianou & CO LLC would be happy to assist and advise the interested parties with any matters related to this newly introduced framework. Such matters involve the establishment and registration of a shipping company to own and operate ships under the Cyprus flag, including the drafting of the relevant memorandum and articles of association, the appointment of its officers and shareholders, acting as the SLLC’s secretary as well as the registration of any charges and mortgages. Michael Kyprianou & CO LLC can also effectively handle and complete the transferring of companies who already own Cyprus-flagged vessels to the newly implemented SLLC Registry up to and until the issuance of the relevant certificate.
We are still expecting the implementation of the provisions of the aforementioned legislation as the necessary measures would need to be adopted by the SDM in order for the provisions of the updated legal framework to be put into effect.
The law firm Michael Kyprianou & CO LLC has established an enviable reputation as a broad-based legal practice being one of the largest law firms in Cyprus. The calibre of the firm’s lawyers and the dedication to providing clients with the most practical and cost-effective services is the cornerstone of the success of our firm.