e.g Maltese flag

Benefits of registration of ships and yachts under the Maltese flag:

  • An internationally-recognised and reputable jurisdiction;
  • EU compliant legislation;
  • Clear technical rules;
  • A well-organised and efficient Commercial Yacht registration system;
  • An advantageous tax regime;
  • VAT exemption on commercial yachts;yachts
  • Low registration costs for commercial yachts;
  • Efficient holding and administrative structures;
  • Tax exemption of income from commercially registered yachts and ships over 1000 net tons.

Yachts and pleasure boats

The Malta flag is one of the largest flag fleets in Europe. All types of vessels, including pleasure yachts, can be registered in the name of legally-constituted corporate bodies or entities, irrespective of nationality, or by European Union citizens (for pleasure yachts only).

Malta is an especially attractive base for super yachts. The owners of more than 260 super yachts (vessels over 30 metres in length) have already chosen Malta as a base for their yachts in order to take advantage of the location of the country and the cost-effective services provided by marinas and ancillary companies.

Registration as commercial yacht

Under the Commercial Yacht Code small yachts and super yachts, which do not carry cargo and do not carry more than 12 passengers, can be registered as commercial yachts. If such a Maltese registered vessel is owned, chartered or managed, then no income tax is due in Malta on or in relation to the ownership, operation or management of the yacht. Instead, the owner, charterer or manager has to pay an annual tonnage tax that is calculated according to the size of the vessel.

Yacht Leasing structure

As far as yachts which are not commercially registered are concerned, the Maltese VAT guidelines address scenarios where a Maltese company purchases a pleasure yacht with a third party. The aim of this structure is to enable owners to pay VAT on their yachts calculated on the percentage of the time that the vessel is deemed to sail in EU waters – based on the assumption that the larger the yacht, the less time it stays there. For example, a 24-metre sailing boat or motor yacht is presumed to spend only 30 per cent of its time in EU waters and thus, VAT (at 18 per cent) should only be calculated at 30 per cent of the lease fee paid.

The yacht leasing scheme works as follows:

  1. The yacht is acquired by a Maltese Company. The company should also be registered for VAT purposes and obtain a VAT number from the VAT department.
  2. The yacht is leased by the Malta company to a third party under a financial lease agreement.
  3. The financial lease agreement will stipulate the saleof the yacht at a pre-determined price to the lessee after the termination of the financial lease period.

Since it is virtually impossible to track the movements of the yacht and thus calculate the deemed usage in EU waters, the VAT department in Malta has issued guidelines which contemplate the deemed usage percentage in EU waters and reduces the effective VAT rate up to 5.4 per cent.

Private aircraft registration.

Building on the success of its ship and yacht registration centre, Malta is establishing itself as a location for the registration of aircrafts. The Maltese aircraft register was first established in 1960s, however, the country introduced a new Aircraft Registration Act in 2010, which streamlines and sets a defined legal framework to regulate aircraft registration in Malta. It also widens registration possibilities for aircraft not used for air service and implements the Cape Town Convention, now widely recognized as a market standard in aircraft finance transactions.

The legislation also provides for modern trends in aircraft ownership for business and private jets and pays specific consideration towards fractional ownership and the ownership of aircraft by trustees in addition to creating the possibility to register an aircraft while it is still under construction.

Application for aircraft registrations are to include particulars and evidence relating to the aircraft, the ownership, acquisition, chartering and operation thereof and the qualifications of the registrant. The Maltese Aircraft Registration Act is fully compliant with EU legislation and allows the following persons/entities to register an aircraft in Malta:

  1. Citizens of EU or EEA member states with a place of residence or business in the EU, the EEA or Switzerland.
  2. An undertaking formed and existing in accordance with the laws of Malta, a member state of EU, The EEA or Switzerland. The undertaking (which must be owned and controlled to aat least 50% by EU/EAA/Swiss citizens) must have its registered office, central administration and principal place of business in the EU, the EEA or Switzerland.
  3. A natural person who is a citizen of or an undertaking established in an approved jurisdiction other  than those referred to above. These shall be qualified to register an aircraft in construction or one which is not used to provide air services provided they satisfy certain conditions.