Corporate Services

Cyprus has recently introduced a leasing scheme for yachts and superyachts, whereby a yacht may be leased by a Cyprus company (lessor) to a third party (lessee) who may be any person or company regardless of country of residence or incorporation. The scheme provides for the following conditions to be met:

1. A lease agreement must exist between a Cyprus company and an individual or legal person, whereby the lessee is granted the option to purchase the yacht at a discount of the original price at the end of the lease.
2. The yacht must sail to Cyprus within one month from the commencement of the Lease. Any extension on the above time limit may be allowed only by the Commissioner.
3. An initial payment amounting to at least 40% of the value of the yacht must be paid by the lessee to the lessor at the commencement of the lease agreement including the corresponding VAT amount.
4. The lease instalments shall be payable monthly, and the lease agreement shall not exceed the threshold of 48 months.
5. The lessor is expected to make a total profit from the leasing agreement of at least 5% on the initial value of the yacht.
6. For the above percentages to apply a prior written approval from the VAT Commissioner is required. The Commissioner must approve the value of the yacht and the applicable percentage on which VAT is chargeable according to the use of the yacht in EU territorial waters.