Yachting and Aviation

Malta has proven to be a valuable place for the yachting and the aviation industry providing beneficial incentives for those looking to register their yacht or aircraft on the island.

Zeta’s Advisors have significant experience and can provide extensive advice whilst ensuring that the entire process remains seamless. Do get in touch with us to enquire about our services and how we can help.

The Maltese flag is vastly recognised around the world for being the largest merchant flag in Europe and the seventh in the world. Registration of a ship under the Maltese flag is an effortless procedure and is regulated by Transport Malta. Registration under the Maltese flag is available to vessels owned by Maltese and non-Maltese owners as well as any kind of vessel.

Malta also provides many initiatives which contribute to the growth of the aviation industry, the island has a business-friendly regulatory framework addressing the challenges the aviation industry poses. The Aircraft Registration Act along with other legislative packages ensures that Malta continues to develop as a leading jurisdiction for aircraft registrations.

Moreover, Zeta offers a full spectrum of services related to the maritime, yachting and aviation industries, and it is ideally positioned to set up new operations in the sector as quickly and efficiently as possible. For full information on all our services relating to yachting and aviation please contact us.

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Yachting in Malta


Registration under a Maltese flag

Any careful boat or yacht owner will agree that choosing the right jurisdiction to register the boat or yacht is key. Malta has one of the largest shipping registries in the European Union. Malta has also internationally distinguished itself as a white flag state, and has become a convenient port for all yachts and superyachts that cross the Mediterranean. Malta’s success in being a well-known maritime jurisdiction has been aided by the local authority which regulates this sector, Transport Malta.

Registering a vessel under the Maltese flag comes with many benefits:

  • Transport Malta provides one of the lowest fees in Europe, the country itself also has a robust tax system in place, with significant financial benefits to operators and ship managers.
  • The Maltese flag registration procedure allows for different various types of vessels such as pleasure boats and commercial ships to be registered under the Malta flag.
  • A vessel can be registered in the name of any European company, trust, foundation or individual person.
  • No restrictions on the nationality of shareholders and directors of a Maltese shipping companies.
  • Competitive incorporation and registration fees.

Additionally, there are numerous other specific incentives to boat and ship owners are available to those who choose to register under the Malta flag.

How to register a yacht in Malta

To register a yacht in Malta, the purpose needs to be outlined to the appropriate authorities in order to evaluate the business activity when applying for a reduced VAT. A yacht’s purpose can be that of the following:

  • Private use
  • Rental purposes
  • Partly private and partly for rental

It is also to be highlighted that a Maltese company that purchases a yacht are allowed to enter into a lease-sale agreement of their asset with a third party.

Zeta can help with the plain sailing of registering your vessel. Zeta has a good standing relationship with the local authorities Transport Malta and The Malta Business Registry, with our support we can make the process seamless. You can rest assured that Malta is a prominent place to register your vessel, and will continue to be one of Europe’s most desired yacht hubs.

Should you require further information on registering your boat, vessel or yacht with a Maltese flag, do get in touch with us and we will be happy to assist you further.

The New VAT Guidelines impose specific obligations that need to be fulfilled for the guidelines to apply:

  • A Malta registered company, is to own the private yacht and act as the lessor and is VAT registered in Malta.
  • The lessor will enter into a long-term yacht lease agreement (i.e. a lease covering more than 90 days’ continuous possession or use) with a non-taxable third party (Maltese/non-Maltese).
  • The conditions of the lease, including its duration and the consideration to be paid by the lessee to the lessor, shall be agreed contractually between both parties.
  • The yacht must be placed at the disposal of the lessee in Malta (effective from the commencement of the lease agreement).
  • Prior approval in writing must be sought from the Maltese VAT department approving the application of Maltese VAT based on effective use and enjoyment.
  • That the effective use and enjoyment of the yacht in EU territorial waters is evidence-based. The lessor is required to obtain from the lessee documentary and/or technological data to demonstrate the yacht’s movements within/outside EU waters;
  • An annual declaration is to be submitted by the lessor with the Commissioner for Revenue within the prescribed timeframe.

The 2019 Guidelines may be accessed here for ease of reference.

Zeta provides advisory services and assistance to individuals and entities who are looking at setting up corporate structures as well as to register pleasure or commercial yachts under the Malta flag.

Do get in touch with us and we will be happy to assist you further.

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Aviation in Malta


Registering an Aircraft in Malta

In 2010, the Aircraft Registration Malta Act came into force, the main aim of this act is to regulate the registration of an aircraft in accordance with Maltese law. The Act also takes into consideration the registration and enforcement of aircraft mortgages and the implementation of the Cape Town Convention.

Malta is a highly competitive jurisdiction with a high economic development in several areas of the aviation industry and a well-established legal infrastructure. Not to mention the freedom of movement within European Union Member States on international and internal flights has made Malta an ideal jurisdiction for private aircraft registration.

Maltese registered aircrafts are documented in a register by the Director General whose authority falls under the Civil Aviation Directorate, this is the main authority responsible for aircraft registration.

Who Is Qualified to Register an Aircraft in Malta?

Although Maltese law is not limiting the types of aircrafts that are registered in Malta, the eligible registrants differ depending on whether the aircraft is used for commercial air services or for private purposes. The following individuals may register an aircraft in Malta:

  • The owner of the aircraft who operates the said aircraft;
  • The owner of an aircraft that is undergoing construction or temporarily not being operated or managed; or
  • The operator of an aircraft under a temporary title which gratifies the conditions which may be prescribed; or
  • The buyer of an aircraft under a conditional sale or title reservation which satisfies the conditions which may be prescribed and who is authorised thereunder to operate the aircraft mentioned.

Such owner, operator or buyer is eligible to register an aircraft in Malta if the individual or company is either of the following:

  • The Government of Malta;
  • A citizen of Malta or a citizen of a Member State of the EU or of an EEA State, or Switzerland, having a place of residence or business in Malta, the EU, the EEA, or Switzerland, including a person sharing in the ownership of such aircraft by virtue;
  • Of the community of acquests subsisting between such person and a citizen as described above in whose name the aircraft is registered;
  • An undertaking formed and existing in accordance with the laws of Malta, of a Member State of the EU, of an EEA State, or of Switzerland and having its registered office, central administration and principal place of business within Malta, or the EU, or the EEA, or Switzerland, whereof not less than 50% of the undertaking is owned and effectively controlled by the Government of Malta, or by any Member State of the EU or by persons referred to above, whether directly or indirectly through one or more intermediate undertakings.

With regards to private aircrafts, a natural person who is a citizen of, or an undertaking established in a jurisdiction approved by the Minister by the Legal Notice ‘Aircraft Registrations (Approved Jurisdictions) Regulations, 2011’, for the purposes of the Act (termed “International Registrant” in the Act), provided it has legal capacity to own / operate an aircraft in terms of law, may register an aircraft under Maltese law. Once an application is submitted by an International Registrant from an approved jurisdiction, the applicant is required to appoint, prior to registration of an aircraft, a Resident Agent who shall be based in Malta and who will act as the channel of communication between the International Registrant and the Director General and other Maltese government departments and authorities.

The Main Advantages of Registering Your Aircraft in Malta

The main advantages of registering aircraft in the Maltese jurisdiction are:

  • An attractive corporate tax system;
  • Robust legislative framework and extensive network of double taxation treaties;
  • Robust legislative framework and extensive network of double taxation treaties;
  • High standards of safety and security.
  • No withholding tax on lease payments where the lessor is not a tax resident of Malta;
  • Transparency of rights and interests in aircraft;
  • Competitive minimum depreciation periods for aircraft;
  • Extensive network of double taxation treaties; and
  • No taxable fringe benefits arising from the private use of the aircraft by non-resident individuals who are shareholders, employees or officers of companies involved in the international transport of goods or passengers.

Zeta can assist with a straight forward registration of an aircraft, for more information on the Registration of Aircrafts in Malta, contact us we will be happy to assist you further.

Aircraft Leasing in Malta

In 2012 the Malta VAT Department has launched the guidelines which explain the Department’s interpretation of aircraft leasing arrangements, particularly applicable to any aircraft that are not employed by airline operators. Essentially, such guidelines provide that the VAT payable by these non-airline operators on such aircraft leasing supplies is exclusively applicable to the amount of time spent by the aircraft within EU airspace.

In accordance with these guidelines, an aircraft leasing supply occurs when the lessor, a company registered in Malta, contracts the use of the aircraft to the lessee, which has to also be a company registered in Malta, for a consideration. For VAT purposes, the supply of aircraft leasing is treated as a supply of services which is taxable at the standard rate and which rate is solely applied to the percentage of use of the aircraft within the airspace of the European Union.

How is the percentage of use of the aircraft within the airspace of the European Union calculated?

In view of the practical difficulty to establish the actual use of the aircraft within the European Union’s airspace, the local authorities apply an expert technical test which takes into consideration essential features of the aircraft and aims to provide an estimated percentage of the use of the aircraft within European airspace. This expert test takes into consideration a mix of the following specifications of the aircraft.

Aircraft type:

  • MTOM (Maximum take-off mass)
  • Maximum fuel capacity
  • Fuel burn
  • Optimum altitude
  • Optimum cruising speed

Mechanics of the arrangement

  • The lessor, which would ideally be a company incorporated in Malta, would be exploiting the aircraft for business purposes (i.e. the leasing of the aircraft to the lessee) and for which, in return, it would be receiving a consideration from the lessee. On this basis, any input VAT incurred in the furtherance of the economic activity of the company would be deductible in the hands of the company. This is particularly relevant for the purposes of acquiring the aircraft from a foreign (EU) entity and for which VAT would have to be accounted for under the reverse charge mechanism
  • The monthly lease charges made by the lessor to the lessee would be subject to 18% VAT; however, the 18% VAT would only be applicable to the percentage of use of the aircraft within the EU airspace which is determined by the above-mentioned formula
  • At the end of the lease period, the lessee may have the option to purchase the aircraft. In case the option to purchase the aircraft is exercised, a VAT paid certificate will be issued by the VAT department.

The above VAT treatment shall apply only insofar as the following criteria are satisfied:

  • The lease agreement shall be entered into by a lessor who is established in Malta and a lessee which is also established in Malta and who would not be eligible to claim input tax in Malta;
  • The lease agreement shall be for a period of not more than 60 months and the lease instalments shall be payable on a monthly basis;
  • The Director General (VAT) may request the lessor to submit details regarding the use of the aircraft;
  • Prior approval must be sought in writing from the VAT Department and each application shall be considered on its own merits.

Do get in touch with us and we will be happy to assist you further.

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Related News

06.08.2019

Yachting and Aviation

Registering an Aircraft in Malta

In 2010, the Aircraft Registration Malta Act came into force, the main aim of this act is to regulate the registration of an aircraft in accordance with Maltese law. The Act also takes into consideration the registration and enforcement of aircraft mortgages and the implementation of the Cape Town Convention.

Read more