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Piraeus port poised to tap benefits March 26, 2008

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.

Increase in shipping firms in Greece October 16, 2007

The number of shipping companies based and active in Greece has grown by 4.7 percent in 2007 compared with last year, reaching 725 from 693 in 2006, according to Petrofin Research SA.

This has put an end to the decline that started in 1998, when companies were closing one after another. Back then there were 926 companies in Greece, but they declined to just 690 in 2005 due to the lack of competitiveness at small shipping firms who usually manage older vessels.

“The Merchant Marine Ministry measures in 2006 aimed at increasing the competitiveness of the national register had a positive impact, stopping the flight of ships from the Greek flag, while their mass repatriation has also begun,” Hellenic Shipowners’ Union sources said. “This is why most of the 612 vessels ordered will raise the Greek flag.”

Small shipping companies, those owning up to eight vessels, are proving to be the backbone of the industry in Greece as they account for 82.3 percent of all Greek shipping companies based in this country. The Petrofin survey found that of the 725 shipping companies based in Greece, 307 (42.3 percent) own one or two ships. Another 165 companies (22.7 percent) manage three to four ships, while 126 companies (17.3 percent) own between five and eight ships. The 63 companies that own nine to 15 vessels account for 8.6 percent, while there are 35 firms (4.8 percent) with 16 to 24 ships and just 29 companies (4 percent) with 25 or more vessels.