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.
Malta has also developed a very strong maritime 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.
Online solution for the ship purchasing and flag registration:
The constantly developing technologies, software and internet facilities trigger the humans’ life progress and digitalization becomes an integral part of the everyday life.
Following the progress many businesses even those, which seems would never been supposed to operate online turned to the digital format.
The ship registration procedure in Malta has been happening “online” for a long time.
To register their yachts all non – Maltese residents are obliged by law to appoint a resident agent in Malta. There is no need for the client to come personally and follow the process. The client would need to provide an agent with the Power of Attorney that allows same to act on client’s behalf. Thus, the process of the registration itself is not impeded because of the lack of possibility to travel by the client.
However, the registration procedure is the last step of the purchasing process.
The number of the ship owners just recently had been growing steadily as the number of the Sailing schools, giving the opportunity to get the Day skipper licence easily.
Having the skipper licence encourages the new mariners to purchase their own boats, as this is one of the most considerable investments they can make.
The chartering companies have been also growing their fleet to supply clients who were eager to hire them for travelling on board. However, the chartering segment has been hit hard and went down due to the lockdowns and restrictions on travelling. This fact made certain mariners to make a choice in looking at the purchasing a boat instead of hiring.
Having the possibility to travel for the purpose to purchase a boat/yacht, the ship owner could choose the one which completed to his requirements.
The current pandemic forced ship owners to make non – standard, but modern solutions to use online technologies as for the reason to purchase and to inspect the boat online as well.
The virtual solution is very possible nowadays since the digital technologies became available, such as live video 360°, yacht tours – walkthrough, Zoom live video conferences, etc.
In spite of the wide range of the new online facilities, client would still need help of the professional agent, who follows the procedure and manages to coordinate the operations.
Some of the ship owners may believe that agent or consultant are there to put extra expenditure on them. However, such a consideration would be erroneous. Dealing with the experienced agent/broker may help clients to avoid mistakes and extra expenses in the future.
The agents/brokers/sales persons may also advise the ship owner when considering to register his vessel; to make a right choice that finally helps to reduce the overall expenses.
Many of the selling agents recommend Malta as a prime European jurisdiction to get the boat registered.
Griffiths + Associates deals with the number of agents/brokers/sales persons on reciprocal terms being introduced to the ship owners. The firm can help to follow the registration procedure assisting the ship owner it may also be appointed as resident agent for the non – Maltese residents as well.
Advantages of registering the ship under Malta flag in comparison with the other jurisdictions:
The pandemic restrictions have also concerned the ship operating and berthing in different marinas and ports.
The European authorities control the vessels operating in the EU waters with the prejudices to avoid vessels registered in third part jurisdictions to be moored in ports in controversy to the international marine law.
Besides, particular European jurisdictions cancelled the possibility to register the pleasure yachts in the individual name of the non – resident ship owners. For instance, the International Certificate for Pleasure Crafts is a so called unofficial proof of ownership is no longer available for the non – residents of Holland as per January 1, 2021.
The Dutch ICP is actually a document of ownership but in that capacity, is accepted in most European countries (not ship registration certificate). This however is not accepted in Spain, Portugal and Italy.
The same situation had happened in Belgium, where since 1 September 2019 the registration in the individual name of the ship owner is only possible to Belgium residents or in the name of the corporate entity, which owned for at least 50% of Belgium share capital.
In this scenario, we would like to emphasise an advantage to register the boat/super yacht in Malta since the registration under Maltese flag is possible in the individual name of any European citizen regardless of his residence.
In case of registering the ship in Malta on the corporate body it is required to open a body corporate in Malta.
Some of the European jurisdictions offer opening UK Ltd/Irish)/off shores entities, which fall under UK/other legislation. That means that being an owner the company is registered in one jurisdiction and with the boat/yacht registered in other jurisdiction; the ship owner hence depends on the legislation of different countries. It may cause the difficulties in the future for ship owner, if the legal bases changes in one of those countries.
If both Certificates of the company incorporation and the ship registration are issued in the same country it promises the stability to the ship owner of such a vessel.
Ship owners will not depend on the legislation of different jurisdictions, if they register their vessel under Maltese flag and own a company to operate such a vessel in Malta.
Reputation and international maritime law:
The jurisdiction of the country of the ship registration is a very important element that should not be disregarded. If the country has a bright international reputation the crew and the ship itself are able to move freely around the world without encountering significant legal and bureaucratic obstacles.
Malta has flawless reputation in maritime community and follows international laws and conventions.
Maltese jurisdiction is a priority in the European Union, ranked sixth in the world and accepted by Paris Memorandum of Understanding on Port State Control (MoU) and Tokyo MoU.
Malta is also white-listed by the Organisation for Economic Co-operation and Development and FATF has also no claims against Malta.
The latter are facts, which emphasise that flying Malta flag is very prestigious. Maltese ships have privileges such as no trading restrictions and preferential treatment to Maltese ships in certain ports in the world.
Entering to the Maltese fleet is a prestigious step for the ship owner that strengthens the position of such a ship in the commercial or tourist market.
Following the above we may underline the importance to get ship registration, which complies with the international law, in order to avoid possible difficulties when sailing in international waters or visiting foreign ports.
Taxation and conditions of ship registration:
Malta’s geographical location and infrastructure always attract investors from different spheres and marine industry is one of them.
Being an international financial centre, the island has a very flexible tax system, which is aimed to take off an extra finance burden from the ship owner.
⚓ The registration fees for any vessel are paid at the first time registration and then annually and depend on the gross tonnage of the vessel, its type and the age.
⚓ Tonnage tax ships (over 1000 net tonnage), which operate commercially are tax exempt.
⚓ For the other categories, the Maltese tax system gives the possibility to reduce the income tax rate from 35 to 5%% in effect.
⚓ The conditions of the registering a ship are very simple and strait forward as well.
⚓ The cost of servicing and maintaining the boat/yacht in Malta is one of the lowest in the European Union. In addition, it is possible to register the vessel older than 20 years, while in Panama or Cyprus this is not possible.
⚓ 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.
⚓ Participation Exemption allows tax neutrality throughout for the holding companies.
⚓ Benefits from extensive double taxation Malta’s treaty network.
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 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 period of not more than 18 months from the date of entering the EU waters without payment of VAT duty.
Process Of Ship Registration In Malta
The registration process for any type of ships are very simple and straight forward provided all documentation is in order.
This process consists from 2 steps:
- Provisional registration
- Permanent registration
On the first stage of the ship registration owner applies for the provisional registration.
He is given of 6 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:
|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 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 permanent ship registration and obtaining the registration Certificate is to submit the following documentation within 6 months of the provisional registration:
|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 SOLAS 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 (manufacture certificate)*|
* Documentation provided for the yachts over 24 metres.
** Maltese registry is only accepted the ship surveyors, who are registered and licensed by any of the following authorities:
- American Bureau of Shipping (ABS)
- Bureau Veritas (BV)
- China Classification Society (CCS)
- ClassNK (NK)
- Det Norske Veritas (DNV)
- Germanischer Lloyd (GL)
- Korean Register of Shipping (KR)
- Lloyd’s Register (LR)
- Polish Register of Shipping (PRS)
- Registro Italiano Navale (RINA)
- Russian Maritime Register of Shipping (RS)
- Indian Register of Shipping (IRS)
Official website Transport Malta: https://transport.gov.mt/ship-registration
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.
Maritime service providing by Griffiths + Associates:
Appointed as a resident agent we help our clients to complete the file of the documentation needed to follow the yacht registration procedure and assist to the ship owners with all the formalities in registering a vessel liaising with shipping Directorate of Transport Malta to obtain the Ship Registry Certificate.
We act on behalf of the non – Maltese resident individual ship owner or corporate entity during the registration procedure as an appointed resident agent.
We deal with the Shipping authority as regards to the annual tonnage tax compliance.
Those ship owners, who register their vessels in the name of the corporate entity, we provide with the following services:
- We help the ship owner to incorporate a company for the ship owning.
- We provide the ship owner with services, such as opening the bank account, auditing and accounting services, payroll for captain/crew, and other legal formalities.
- We advise the ship owner with the respect to legal, maritime tax and regulatory obligations.
Reviewing the advantages of the yacht registration in any country of the European Union the ship owner needs to be aware the procedure of the yacht registration, VAT status and the resident status of the ship owner are obviously different matters, which are independent but at times related.
Our company may provide bespoke advice for the interested clients considering of the requirements of the different ship jurisdictions including VAT status and the residential status of the ship owner.
Griffiths + Associates advises the clients following international and Maltese laws and clients choose Malta to establish or expand their business and to register a yacht and enjoy owning it in Malta or anywhere else.
Need Our Assistance With Registration Your Ship Under Maltese Flag?
Get Support From Our Specialised Professionals:
We provide full array of maritime services:
- Advisory services to individuals and legal entities who wish to register yachts under the Malta Flag.
- Services on the adoption of efficient tax structures at maximising the particular needs of the yacht owner.
- We may act as a resident agent for the registration of a company in Malta to act as owner of the yacht and liaise with certified surveyors as well as the shipping Directorate of Transport Malta in order to have the provisional / permanent registration.
To meet with our specialists please fill out the form below or send us your query via email email@example.com and we will contact you shortly.