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The influx of ships and companies is a significant source of revenue for Cyprus. The Central Bank estimates that in 1994 the revenue of the Government from taxes on ships and offshore shipping companies plus the spending of these companies on local goods and services reached CYP 42 million. The CSC survey indicated that last year, on average, respondent shipmanagement companies pumped into the economy close to CYP 1.1 million each. In some cases offshore shipping companies also invest in their own premises in Cyprus. The CSC survey revealed that when a shipping company buys or builds its own offices, it invests on average CYP 1.9 million.
About 85% of the total expenditure in offshore shipping goes directly into the local economy of Limassol where most offshore shipping companies have their offices and employ more than 1100 persons. In this respect it should be noted that offshore shipping companies are the second largest employer in the offshore sector and the largest employer of Cypriots working for offshore companies. The whole of the offshore sector employs about 5500 persons and in 1994 the income it generated for Cyprus exceeded CYP 147 million.
But the shipping sector in Cyprus is not only confined to ship registration and shipmanagement. It also involves other activities the main one being, of course, the actual transport of goods and passengers to and from Cyprus. Two important aspects of this transport activity is the use of Cyprus for the transshipment of goods and the provision from Cyprus of cruises to other destinations in the region.
The Department of Statistics and Research estimates that in 1994, the gross output of the broad shipping sector and related activities (e.g. customs clearing services), which excluded offshore shipping, amounted to CYP 112 million. The broad shipping sector also provided employment to about 4,585 persons. It follows that output per person in this sector is close to CYP 24,500. This compares vary favourably with the average output per person for the economy as a whole, which is below CYP 20,000. By contrast, output in the offshore shipping sector, as indicated by spending in Cyprus, is much higher, estimated to have reached CYP 30,000 per person in 1994.
This spending has, of course, beneficial repercussions on other sectors of the economy. Take, for example, professional services. Shipping companies use extensively such services. According to the CSC survey, the average shipmanagement company bought in 1994 professional services supplied locally worth about CYP 77,000. The Cypriot 1aù offices, auditors, banks, computer programmers, insurance brokers and other consultants benefit considerably by learning from their transactions with international shipping companies which compete in world markets and, as a result, have to operate fast and efficiently. Indeed, these companies do compete globally. The CSC survey showed that more that 70% of the ships they manage fly foreign flags and employ about 22,000 seafarers. The executives of these companies have to travel extensively to meet their business associates worldwide. Last year, only the local staff of companies that were surveyed spent about CYP 1 million on airfares, benefiting Cyprus' national carrier and many travel agents. Also a large number of their business associates came to Cyprus, contributing again to the prosperity of the Cypriot travel and tourism industry. So the presence of many internationally - oriented companies in Cyprus has extensive direct and indirect positive affects on the rest of the economy.
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