Yacht registration procedure under Malta flag | Audit and Advisory Services Malta | Griffiths + Associates

Yacht registration procedure under Malta flag

Building on its long and varied maritime tradition, Malta, a member of the European Union, has today established itself as one of the leading maritime hubs and service centres in the Mediterranean region.

Malta offers a whole range of international maritime services and facilities as part of a comprehensive package for the maritime industry.

Maritime Malta has also developed a very strong legal and regulatory platform that has enabled the Malta flag to become a reputable international ship register which is now established as one of the largest in the world.

Vessel registration under the Malta flag and the operation of Maltese ships is regulated by the Merchant Shipping Act of 1973.

Those owners, whose decision is to register their boat under Malta flag enjoy with the advantages both of Maltese legal and of tax systems.

Maltese legal system provides various advantages as follows:

  • Ships may be registered in the name of legally constituted corporate bodies or entities irrespective of nationality, or by the individual name of EU/non-EU citizen.
  • Option to register as a commercial or private pleasure boat, which is equipped already or under construction.
  • No restriction on the sale and transfer of shares of a company owning Maltese ships.
  • No restrictions on the nationality of the master, officers and crew.
  • No restrictions on the sale and mortgaging of Maltese ships.
  • No trading restrictions and preferential treatment to Maltese ships in certain ports.
  • Procedure for temporary admission of private yachts, registered by non-EU citizen and flying the non-EU flag, which makes possible to operate in the EU territorial waters for a peroid of not more than 18 months fron the date of entering the EU waters without payment of VAT duty.

Maltese tax system provides various advantages as follows:

  • Low company formation, ship registration and tonnage tax costs.
  • No taxation on the transfer of shares in shipping companies.
  • No taxation on commercial yachts and tonnage tax ships registered in the name of Maltese company flying Maltese flag.
  • attractive incentives to owners, registered charterers and financiers of Maltese ships of over 1,000 net tonnage;
  • Progressive reduction in registration and tonnage tax costs for younger ship.
  • Possibility of obtaining a low-VAT paid status on pleasure yachts flying the Maltese flag.
  • Tax incentives, which in essence enables an effective income tax rate of 5%.
  • Participation Exemption allows tax neutrality throughout for the holding companies.
  • Benefits from extensive double taxation Malta’s treaty network.

Private and commercial yachts registration

Depending on the purpose of use, all vessels are classified as private and commercial purpose.

Any pleasure yacht of 6 metres in length or more, which is used for the sole purpose of the owner only maybe privately registered.

Such a boat can be registered both as in the personal name of the individual as well on behalf of the corporate body or other entity.

Any yacht of 15 meters in length or more, which do not carry cargo, carries not more than 12 passengers may be registered for the commercial purpose.

Such a yacht can be registered both as in the personal name of the individual as well on behalf of the corporate body or other entity owning this yacht for the commercial use.

In case of the non – EU owner registration for the commercial purpose is possible together with the company incorporation.

The following classes of yachts are considered as for commercial registration:

  • Yachts in commercial use of not less than 15 metres in length and not more than 24 metres.
  • Superyachts in commercial use of more than 24 metres in length and less than 500 gross tons.
  • Superyachts in commercial use of more than 24 metres in length and 500 gross tons and over.

The above classification is due to the difference in tonnage tax rate depending on the year of build and length of the vessel.

Process of ship registration

The registration process for any type of vessels are very simple and straight forward provided all documentation is in order.

This process consists from two steps:

  • Provisional registration
  • Permanent registration

On the first stage of the ship registration owner applies for the provisional registration.

He is given of six months to have all documentation completed.

If not in time this period can be extended for a period or periods not exceeding in the aggregate six months.

Provisional registration in terms of the law has the same effect as the so-called permanent registration and can be obtained effected very quickly.

Requirements for the provisional registration for ship and superyachts are similar in general case and presented in the table below:

Ships Superyachts
1 Application for registration, signed  by the owner or an authorised representative, including, if required, application for change of name of ship Application for registration, signed  by the owner or an authorised representative, including, if required, application for change of name of yacht
2 – Proof of qualification to own a Maltese ship (builders certificate and bill of sale, including the completion of a declaration of ownership)

– Memorandum of Articles of association in case of corporate entity

– Proof of qualification to own a Maltese ship (builders certificate and bill of sale, including the completion of a declaration of ownership)

– Memorandum of Articles of association in case of corporate entity

3 In case of non-resident owners, appointment of a resident agent**** In case of non-resident owners, appointment of a resident agent****
4 A copy of the ship’s International Tonnage certificate* A copy of the current yacht’s  International Tonnage certificate*
5 Declaration of ownership made in front of the Registrar by the owner or an authorised representative Declaration of ownership made in front of the Registrar by the owner or an authorised representative
6 Application for Ship Radio station Licence Application for Ship Radio station Licence
7 Evidence of seaworthiness this is done via an inspection. Guidelines attached – attachment 1. Certificate of Compliance to Trade for yachts of 15 metres in overall length, not carry cargo and more that 12 passengers***
8 Application for Minimum Safe Manning Certificate* For Commercial yachts of more than 24 metres, application for Minimum Safe Manning Certificate
9 Payment of initial registration fees and annual tonnage tax Payment of initial registration fees and annual tonnage tax
10 Request for Administration to authorize the appropriate recognized classification society to issue the ship’s certification**

* Documentation is provided where applicable

** Ships of 10 years and over, but under 15 years must pass an inspection by an authorized flag state inspector before or within a month of provisional registration;

Ships of 15 years and over are required to pass an inspection by an authorized flag state inspector prior to being provisionally registered.

As a rule, trading ships of 25 years and over are not registered.

*** The Certificate of Compliance is renewable every five years and survey may be carried out by an Appointed Ship Surveyors or by a Recognised Organisation.

**** In case the resident agent is appointed, the ship owner has to provide this agent with the Power of attorney authorising the agent to act on ship owner’s behalf in all matters relating to the registration of the yacht.

The second step towards the hip registration is to submit the following documentation within 6 months of the provisional registration:

 

Ships Superyachts
1 – Builder certificate in the applicant name if the vessel has not been registered previously;

– Bill of sale or other document showing the vessel was transferred for registry

– Builder certificate in the applicant name if the vessel has not been registered previously;

– Bill of sale or other document showing the vessel was transferred for registry

2 Deletion Certificate from the previous registry, showing vessel is free from mortgage or vice versa Deletion Certificate from the previous registry (if applicable)
3 In cases of SOLAR ships, copy of the last updated Continuous Synopsis Record issued by the Administration where the ship was last documented In cases of commercial yachts over 500 gross tons, copy of the last updated Continuous Synopsis Record issued by the Administration where the ship was last documented
4 Certificate of Survey and a copy of the international Tonnage Certificate issued by an approved surveyor of ships – for minimum requirements of the appointed surveyor follow the attachment 2. Certificate of Survey and a copy of the international Tonnage Certificate* issued by an approved surveyor of ships
5 Evidence that vessel has been marked in accordance with the law – Carvings and Markings Note, completed by surveyor.  This is first issued by TM and then completed and stamped by the Surveyor. Evidence that vessel has been marked in accordance with the law – Carvings and Markings Note, completed by surveyor. This is first issued by TM and then completed and stamped by the Surveyor.
6 Copy CE Marking Certificate*

* Documentation is provided for the yachts over 24 metres;

** Maltese registry only accepts surveys registered and licensed with any of the following authorities:

  1. American Bureau of Shipping (ABS)
    b. Bureau Veritas (BV)
    c. China Classification Society (CCS)
    d. ClassNK (NK)
    e. Det Norske Veritas (DNV)
    f. Germanischer Lloyd (GL)
    g. Korean Register of Shipping (KR)
    h. Lloyd’s Register (LR)
    i. Polish Register of Shipping (PRS)
    j. Registro Italiano Navale (RINA)
    k. Russian Maritime Register of Shipping (RS)
  2. Indian Register of Shipping (IRS)

All yachts below 24 metres in length have to undergo an intermediate survey whilst yachts larger or equal to 24 metres in length that are commercially registered have to undergo annual surveys.

Once the paper work is provided the registration Certificate is issued directly by Malta Transport.

A certificate of Malta registry is subject to renewal on the anniversary of the Maltese registration.

Our company’s mission – to provide quality financial services to our esteemed local and international clients, keeping their needs at the centre of our ethos; going the extra mile to efficiently and effectively assist them in growing and fulfilling their business and personal needs.

Peter Griffiths – Managing and Tax Director
Peter Griffiths
Managing and Tax Director, Griffiths + Associates
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