Malta has a long maritime tradition and it has established itself as one of the leading maritime hubs and service centres. The Island has several yacht marinas and offers a whole range of maritime services and facilities. Malta has also developed a very strong legal and regulatory platform and Malta’s shipping register is the EU largest and one of the largest in the world.
All types of vessels, both pleasure yachts and commercial ships, including vessels under construction, may be registered under the Malta flag. If the owner is not a Maltese resident person or an EU citizen, we may act as a resident agent.
Vessels older than 10 years are subject to additional scrutiny by Transport Malta. Vessels older than 10 years are subject to an inspection from an authorised flag State inspector whilst vessels older than 15 years are required to undergo an authorised flag State inspection prior to provisional registration. It is customary for Transport Malta not to accept registration of trading vessels of 25 years and over although in certain circumstances this may be considered.
A vessel / yacht is first registered provisionally under the Malta flag for six months during which period all documentation must be finalised. It is possible to request an extension of the provisional registration should this be required.
The requirements for provisional registration are:
- Application for registration by the owner or an authorised representative, including, an application for change of name of yacht, if required;
- Proof of qualification to own a Maltese vessel. If the owner is a Maltese company, we will provide all the required documentation, however, if the owner is a foreign corporate entity, we would require a declaration appointing us as resident agent, certified copies of the certificate of incorporation, statute and good standing certificate. All documents must be notarised and apostilled. We also require a signed legal opinion confirming that the records of the entity have been examined and giving details on the directors and holders of office and of the persons authorized to represent the entity and to bind it with their signature and to appoint a registered agent.
- Declaration of ownership made in front of the Registrar and signed by the owner or an authorised representative.
- A copy of the current ship’s International Tonnage Certificate (in case of ships over 24 metres);
- Evidence of seaworthiness;
- Payment of the initial registration fees;
- Application for radio licence.
The following documents are to be submitted during provisional registration:
- A builder’s certificate in case the yacht is newly built or a bill of sale if acquired;
- A deletion certificate or cancellation document issued by the relevant authorities where the vessel was last registered, if applicable;
- A Certificate of Survey and a carving and marking note both signed by an approved surveyor.
Further documents will be required for commercial or larger vessels.
Once all the necessary documents are made available, a certificate confirming registration is issued by the Shipping Directorate of Transport Malta. The certificate is valid for one year and must be renewed annually together with the payment of the annual registration fees.
The Shipping Directorate of Transport Malta considers a private registered yacht to be any pleasure yacht of 6 metres in length or more, which does not carry passengers for reward and is not engaged in trade but is used for the sole purpose of the owner.
Yachts in commercial use which do not carry cargo and do not carry more than 12 passengers can be registered as commercial yachts under the Commercial Yacht Code. Maltese law is very advantageous for the operation of commercial yachts.
The following classes of yachts will be considered 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 tonnes.
- Superyachts in commercial use of more than 24 metres in length and 500 gross tonnes and over.
A company operating a recognised commercial yacht is exempt from income tax however will be subject to tonnage tax based on the gross tonnage of the commercial yacht.
A Maltese vessel owner acting as a taxable person must be registered for VAT purposes in Malta. Pleasure boat owners are required to register when the vessel is leased for a short-term period (charters not exceeding 90 days) or a long-term period (charters exceeding 90 days).
The purchase of the vessel should remain VAT neutral for a VAT registered vessel owner. A vessel bought by a Maltese taxable person from another taxable person situated in another EU Member State is subject to the reverse charge mechanism and therefore no VAT is actually paid in Malta. It is also possible for a vessel acquired from outside the EU to have the vessel imported into Malta and request a VAT deferment from the Maltese VAT Department on the understanding that the vessel will be used for commercial purposes.
The place of supply of a lease of a pleasure boat to a non-taxable person (whether long term or short term) or short-term charter to a taxable person is the place where the yacht is actually put at the disposal of the customer. This usually means that place of departure of the charter of the yacht. On the other hand, the place of supply of yachts for a long-term period to a taxable person is the place where the customer is established.
Subject to obtaining pre-approval from the VAT Department, the yacht owner may charge VAT on a portion of the lease on the understanding that only a portion of the lease is consumed within EU territorial waters. The owner of the yacht is required to provide proof of the time the vessel would spend in the EU or, in absence of sufficient information to provide such assessment, the VAT Department may apply a predetermined percentage of the lease taking place in the EU. Such percentages are based on the length of the yacht. The effective VAT rate will be substantially reduced. We will be able to work out the VAT savings once we have the necessary details.
As a VAT registered taxable person, the Maltese yacht owner may claim back any VAT incurred on business related expenses in Malta as well as apply the self imposition of VAT on invoices from EU suppliers. The yacht owner may also opt to claim back any VAT incurred in other EU Member States through the Eighth Directive subject to any conditions imposed by the Member State.
The supply of sea vessels and provided to such vessels are exempted from VAT. Such exemption is only granted to sea vessels used for navigation in high seas and for the carrying of passengers for commercial, industrial or fishing activities, sea vessels used for rescue or assistance at sea or for coastal fishing as well as to sea vessels used for war. This exemption does not apply to vessels used for leisure purposes.