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Piraeus port poised to tap benefits March 26, 2008

Posted by grhomeboy in Business & Economy.
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Piraeus port poised to tap benefits of Greek shipowners’ flight from British capital > More than 1,200 shipping companies, employing more than 12,000 highly specialized staff, were based in the port of Piraeus in 2007, compared to 900 in 2005.

At a time when efforts are being made to ensure that Piraeus, Greece’s main port city, gains a leading place among international shipping centers by enhancing both infrastructure and services, London-based Greek shipowners are seriously considering whether to stay or move as a result of tax reforms planned by the British government.

For decades, income generated off British soil by non-British residents enjoyed tax-free treatment. More than 100 Greek shipowning families based in London are now thinking of moving to Piraeus, primarily for two reasons: significant infrastructure improvement projects have been carried out in the past six years, while the government has taken certain measures to guarantee a stable and competitive institutional environment for shipping companies.

During a recent visit to London, Merchant Marine Minister Giorgos Voulgarakis gave assurances to Greek shipowners that the government intends to maintain the favorable tax regime applicable for the Greek shipping community, which controls 8.7 percent of the world fleet, with 4,173 vessels. This translates into a capacity of 260,929,221 dwt (deadweight tons), which represents 16.4 percent of overall world shipping.

“We are considering taking additional measures in favor of shipowners who might move their base to Greece,” Voulgarakis is said to have told a gathering of Greek shipowners. “We are going ahead with the creation of a cluster arrangement, based on international standards and Greek features, aimed at promoting Piraeus as a shipping center with global linkages.”

In Greece, shipping companies are not taxed either on income earned abroad or on property purchases and income from capital denominated in US dollars. In 2007, foreign exchange inflows to Greece from shipping amounted to 17 billion, a figure that accounts for 7 percent of the country’s GDP.

The contribution of Greek companies to the British economy is estimated at some $10 billion annually. A study by the British Chamber of Shipping showed that if Greek shipowners decided to leave the city, the economy will lose almost one billion pounds, not to mention some 120,000 professionals in medium and high-ranking executive posts, who will have to move out with their families.

The British government is planning certain changes for non-citizens living in the country, who in the coming years would have to pay 30,000 pounds ($62,000) if they want to avoid paying tax on income from abroad.

But London’s losses could be Piraeus’s gain, in the framework of legislation that is supportive of shipping operations. In the past six years, 30 shipping firms have set sail for Piraeus and Athens. London-based shipowners believe that a significant upgrade of Piraeus port could result in a large influx of companies from the British capital.

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