Ship & Yacht Registration in Malta
Owners of all types of vessels, from pleasure yachts to passenger cruise ships, tankers and oil rigs, may register such vessels under the Malta flag and take advantage of the various benefits, particularly fiscal, available under Maltese law.
There are niether trading restrictions nor age restrictions. However it must be noted that:
- Ships of 15 years and over, but under 20 years, must pass an inspection by an authorised flag state inspector before or within a month of provisional registration; and
- Ships of 20 years and over but less than 25 years , must pass an inspection by an authorised flag state inspector prior to being provisionally registered.
As a rule trading ships of 25 years and over are not registered.
Eligibility to own a Maltese Ship
In Malta shipping activities are regulated by the Merchant Shipping Act (MSA). All types of vessels, from pleasure yachts to cruiser liners, from container ships to oil tankers and oil rigs may be registered under the Maltese flag, provided that inter alia, they are wholly owned by either:
1. Maltese citizens
2. Maltese Corporate Bodies – Shipping Organizations
3. International Owner – must appoint
Maltese resident agent.
Maltese citizens, must be either ordinarily resident in Malta or domiciled in Malta.
Maltese Corporate Bodies, must be formed and registered in Malta, or which have their principal place of business in Malta or which are controlled, directly or indirectly by a person or persons resident in Malta. They must also ensure due observance of the laws of Malta relating to merchant shipping.
The International owner may be either a foreign corporate body (also known as a shipping organization), or any other entity, which enjoys legal personality under a foreign jurisdiction, approved by the Maltese Registry. An International owner must en-sure due observance of the Maltese Laws in relation to Merchant Shipping. Also it must have an established place of business in Malta. International owners must also ap-point a Maltese resident agent to represent them in Malta at all times when the vessel is registered under the Malta flag.
The MSA, provides that a shipping organisation may take various forms so long as it objectives are lawful and they are provided for in the MSA. A shipping organisation may be formed as:
(a) a limited liability company; or
(b) a partnership en nom collectif; or
(c) a partnership en commandite.
A shipping company may have the status of either a public company or a private company. Also a shipping organisation may also operate under a trust (known as a "shipping trust") or it may be a foundation (known as a "shipping foundation").
Taxation of Shipping Companies under MSA
Shipping companies are subject to corporate tax at the normal domestic rate. However, if a ship is owned by a shipping company that is registered by the Merchant Shipping Act (MSA) or is registered by a foreign shipping organization recognized by the MSA, then it is entitled to certain benefits.
The vessel that such company owns is referred to as a tonnage tax ship. All income derived from shipping activities of such a tonnage tax ship shall be exempt from in-come tax.
The shipping company is solely exposed to relevant registration fees and annual ton-nage taxes prescribed for in the MSA. Also no further tax shall be charged or payable on any gain arising on liquidation, redemp-tion, cancellation, or any other disposal of shares, securities or any other interest, in-cluding goodwill, held in any licensed ship-ping organization owning.
Operating, administering or managing registered vessels must be in excess of 1,000 net tons to avail oneself of all tax benefits.
Also no tax shall be payable by any person on interest or other income payable to him in relation to any financing of the operations provided for under the MSA with regards to the objectives a shipping corporation may pursue, or to the financing of any ship of not less than 100 net tonnage.
Maltese Shipping Company dividends distributed to the corporate shareholders are also exempt from tax if such dividends are distributed out of gains or profits derived from the ownership or operation of a ton-nage tax ship.
Such exemptions shall be applied if the shipping organization/company keeps separate accounts distinguishing the payments and receipts by the shipping organisation concerned in respect of:
(i) shipping activities (including the ownership, operation, administration or management of the ship in question), and
(ii) payments and receipts in respect of any other business.
Such tonnage tax ship shall also be exempt from the Exchange Control Act on transac-tions connected with the ownership, opera-tion, administration, management, purchase or financing of a tonnage tax vessel or any other shipping activity or activity ancillary thereto.
Any non-resident officers or employees of licensed shipping organisations, and the organisation in their respect, shall be entitled to be exempt from the provisions of the Social Security Act.
There shall also be no duty chargeable in accordance to the Duty on Documents and Transfers Act in respect of:
(i) The registration of a tonnage tax ship and other registrations relating to such ship;
(ii) The issue or allotment of any security or interest of a licensed shipping organization or the purchase, transfer, as-signment or negotiation of any security or interest of any licensed shipping organiza-tion or company;
(iii) The registration of any mort-gage or other charge over or in relation to any ship or licensed shipping organization, any transfer or discharge thereof, and receipt relative thereof and any assignments granted in connection therewith; or
(iv) The assignment of any rights and interests, or the assumption of obligations in respect of any ship or share thereof.
Registration Procedure
The procedure for the registration of a vessel is relatively straightforward. Provisional registration, which in terms of the law has the same effect as the so-called permanent registration, can be effected very quickly. Authority to help a ship, however, will only be given once the Administration is satisfied that the vessel conforms to all the standards required by the relative international conventions.
Provisional registration has a validity of six months, although this can be extended by a further six months; by this time all the documentation has to be completed for permanent registration. This includes, in particular, evidence of ownership and of cancellation of former registry. Authority to operate still remains linked to conformity with the relative manning, safety and pollution prevention international standards.
Provisional Certificate:
Until all formalities for obtaining the perma-nent registration of the vessel are completed, a vessel may be provisionally registered under the Malta flag. To obtain provisional registration of the vessel, the following documentation must be submitted to the Malta Maritime Authority:
1. an Application Form and a Declaration of Ownership, duly completed and signed;
2. a certificate of seaworthiness issued by a classification society recognized by the Malta Maritime Authority. These include the American Bureau of Shipping, Bureau Veritas, Det Norske Veritas, Germanischer Lloyd, Helenic Register of Shipping, Lloyd’s Register of Ship-ping, Nippon Kaiji Kyokai and the Reg-istro Italiano Navale. Other classifica-tion societies are partially recognized to issue survey, tonnage and convention certificates in certain circumstances;
3. a Passenger Ship Safety Certificate in case of a passenger-carrying vessel;
4. a copy of the statute in the case of shipping organisations; and
5. payment of the initial and annual regis-tration fees to the Malta Maritime Authority and to the Wireless Telegra-phy Department (in respect of the radio equipment).
The provisional Certificate is valid for 6 months and can be extended for a further 6 months. During such time the ship owner must submit the necessary documentation to the Malta Maritime Authority so as to obtain the Permanent Registration.
Permanent Certificate:
In order to obtain such Permanent registra-tion the following documentation must be submitted to MMA once the ship is granted a provisional certificate:
1. a builder's certificate, if the vessel has not been registered elsewhere, or a bill of sale or other document by which the vessel was transferred to the applicant;
2. satisfactory evidence that any foreign certificate of registry has been cancelled and that the vessel is free from encumbrances;
3. a Certificate of Survey and a copy of the International Tonnage Certificate certifying that the vessel has been sur-veyed in accordance with Maltese regulations;
4. evidence that the vessel’s name, official number and post of registry have been marked in accordance with the law; and
5. an application must also be submitted to the Wireless Telegraphy Department for a call sign for the vessel.
Benefits of the Malta Flag:
1. No income tax in respect of profits derived from the operation and ownership of a Maltese registered vessel. Also, share-holders of Maltese shipping companies are not subject to taxation in Malta on the divi-dends they receive;
2. No duty in respect of the sale, transfer or transmission of any vessel, or of any shares in a company owning such vessel;
3. No restrictions on the sale or mortgaging of a vessel registered in Malta or on the transfer of shares of a Maltese company owning such vessel;
4. No restrictions on the nationality of the master, officers and crew;
5. Low registration and labour costs;
6. No trading restrictions;
7. Malta is a party to the major international maritime conventions;
8. Preferential treatment for Maltese vessels in certain ports.
Authorised Classification Societies
Prior to and during the period of the ship's registration, merchant vessels must be classed with one of the following classification societies authorised to issue statutory certificates on behalf of the Maltese Government:
American Bureau of Shipping, Bureau Veritas, China Classification Society, Det Norske Veritas, Germanischer Lloyd, Korean Register of Shipping, Lloyd's Register of Shipping, Nippon Kaiji Kyokai , Russian Maritime Register of Shipping, Registro Italiano Navale
The following classification societies currently enjoy recognition applicable in certain circumstances on the specific authorisation of the Directorate:
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Croatian Register of Shipping , Hellenic Register of Shipping, Polish Register of Shipping
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Flag State inspections of Maltese ships are carried out regularly by inspectors appointed by the Maltese authorities in different ports worldwide. The inspections are in addition to the regular statutory surveys conducted by the classification societies and are carried out only on the specific instructions of the Directorate. There are no additional charges for these inspections except when the vessel has to undergo a second or subsequent inspection to ascertain that reported deficiencies have been corrected and, when a ship is inspected prior to provisional registration.
Accounting Authorities
Most of the vessels registered under the Malta flag have their radio accounts settled by large internationally recognised accounting authorities. All major authorities are recognised by the Maltese Administration.
The Malta Maritime Authority was set up as a distinct and autonomous corporate body to supervise the organisation of the primary maritime services. It was established by law in 1991 as a Government Agency and so vested with detailed regulatory powers. The set-up of this Authority was to enable ports, merchant shipping and yachting centres to operate within centralised framework.
The Authority operates as a distinct commercially driven organisation, committed to excellence in the provision of services that are both effective and competitive.
The Malta Maritime Authority develops and supports policies and initiatives consonant with the functions and duties stipulated in the Malta Maritime Authority Act (XVII) of 1991.