The shipping registry in Malta is acknowledged today to be the fifth largest registry in the world and one of the largest within the European Union. But until recently, Malta only registered ships and private yachts under the Maltese Flag and no provision was made for the registration of Commercial Yachts.

With Malta’s accession to the European Union in May 2004, huge interest was shown in using the Maltese flag for yachts in the chartering business doing their trade with EU residents or in EU territorial waters. The challenge has been picked up by the Malta Maritime Authority which has now begun to flag commercial yachts too.

The operation of commercially registered yachts for chartering purposes using a Maltese company is very tax advantageous. Profits from chartering are taxed at 4.17% and the chartering business carried on by a Maltese registered entity is VAT exempt with credit meaning that while no VAT is charged to the client chartering the yacht, all VAT paid on purchases by the Maltese company can be reclaimed.

The low tax, VAT exemption with credit and the low costs for forming and maintaining a Maltese registered company make the Malta flag very attractive for the operation of Commercial Yachts.

To register your yacht provisionally under the Maltese flag you will need to contact a legal firm and you will be required to provide a power of attorney from the owner authorizing the firm to register the company and the yacht on a provisional basis. You will need to provide:

  • an MCA Certificate of Survey issued by a classification society
  • if the yacht is more than 24 metres in length, you will need an International Tonnage Certificate and a Load Line Certificate also issued by class.

The provisional registration is valid for six months following which the yacht must be permanently registered. Within the six month period you should provide:

  • yacht survey certificate from classification society
  • a bill of sale showing that your Maltese company has bought the yacht; or a builder's certificate in the name of the Maltese company if the yacht is new or has never been registered anywhere previously 
  • if the yacht has been registered previously outside of Malta, a certificate showing cancellation of registry from that last country of registry (deletion certificate)

All yacht registration certificates are accompanied by a radio licence issued by the Maltese authorities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.