Cell Companies Now Offer Asset Structuring Opportunities in the Shipping and Aviation Sector

The Minister for Economy, Investment and Small Businesses has issued new regulations relating to the Companies Act (Shipping and Aviation Cell Companies) Regulations. The aim of these regulations is to create a new structure to be used by companies operating in the shipping and aviation sector through the means of a cell company.

Cell Companies in Malta

Cell Companies are regulated under Maltese law and are generally used by insurance companies under the Companies Act (Cell Companies Carrying on Business of Insurance) Regulations and also by securitisation vehicles and investment companies with variable share capital under the Securitisation Act. With the success of cell companies for the above mentioned it was decided that cell companies can also apply to the shipping and aviation sector. 

Benefits of Cell Companies for Shipping and Aviation Companies

The opportunity for shipping and aviation companies to benefit from a cell company structure, requires the fulfilment of certain legislative requirements as detailed in Article 84E. Such an opportunity to incorporate cell companies into the two sectors will prove to be a progressive step forward for Malta. Malta is already market-leading jurisdiction within both the shipping and aviation sector.

The use of a cell company structure by companies operating in the shipping and aviation sector offers key benefits, such as:

• The assets and liabilities of each individual cell are a distinct patrimony and are disconnected from the core cell company and from other individual cells allowing for the structuring and ring-fencing of each cell;
• The core cell company is a single legal person and the formation of each new cell does not create a new legal person separate from the core cell company therefore, each individual cell is bound to transact by means of the core cell company;
• When the cell company is established, it is a quick process for new cells to be set up and begin operations;
• Only one board of directors and one set of Memorandum and Articles of Association is required for the cell company and all its cells;
• Only one operative license is required for an entire cell company including its individual cells;
• The creditor of one particular cell only has recourse to the assets to that particular cell and not the remaining cells or the core cell company;
• The insolvency of a cell has no impact on the remaining cells or the cell company;
• Cell companies and their cells benefit from Malta’s tax imputation system.

To read the full amendments made to the Companies Act allowing for the introduction of regulations regarding Cell Companies carrying on or engaged in Shipping or Aviation Business (the “Regulations”) Click Here.

For more information on how Zeta can assist you please contact our Business Development team on bd@zeta-financial.com.