Throughout the years, Malta has developed a working regulatory platform which enabled it to become one of the most prestigious homeports in the world.
Its location, having English as its second language, as well as the numerous advantages offered to shipowners under the Maltese flag, have likewise contributed towards making it the attractive hub for yachts which it is today.
2 types of yacht registration under Maltese Law
Under the Maltese flag, a yacht may be registered, either as a private yacht or as a commercial yacht.
The Merchant Shipping Directorate in Malta considers the registration of yachts having 6 meters in length or more, which do not carry passengers for reward, and which do not engage in trade but are solely used for its enjoyment by the owner, as registered for private purposes.
On the other hand, yachts having 15 meters in length or more, which do not carry cargo, which carry 12 passengers or less, and which are operated by the owner or body corporate owning the yacht, are considered as yachts registered for commercial purposes by the Merchant Shipping Directorate in Malta.
Advantages of registering a yacht under the Maltese Flag
For many years, the Maltese flag has been regarded as a flag of confidence, and this, in view of the several advantages which it offers to stakeholders, some of which include:
- vessels may be registered in the name legally constituted corporate bodies, irrespective of their nationality; or by European Union Citizens;
- affordable maritime administration;
- efficient registration process;
- low company formation costs;
- no trading restrictions and preferential treatment to Maltese ships in certain ports;
- reduction in registration and tonnage tax costs for younger ships;
- no restrictions on the sale or transfer of shares of a company owning Maltese ships;
- VAT incentives for Companies interested in chartering their vessels;
- no restrictions on the nationality of members and employees onboard the vessel;
- competitive registration and annual fees;
- low tonnage costs;
The applicable legislation in Malta
The registration of all types of yachts is mainly regulated by the Merchant Shipping Act, together with its subsidiary legislation.
The above-mentioned laws provide several provisions which regulate:
- Registration fees;
- Procedure for registration;
- Transfer and Transmissions;
- Forfeiture of Ships;
- Conditions for admission to employment of masters and seamen;
- Safety of life at sea;
Malta is also a signatory to several conventions, regulations, and directives issued by the International Labour Organization, International Maritime Organization, and the United Nations and consequently, these have all been adopted into and now form part of the Maltese legal framework.
Who may apply for yacht registration in Malta?
All types of yachts may be registered under the Maltese flag, provided that, inter alia they are wholly owned by:
- Foreign entities enjoying legal personality; and
- European Union Citizens.
Whilst there are no age or trading restrictions, it should be noted that:
- vessels of 10 years or over, but of under 15 years, shall have an inspection carried out to them, by an authorised flag state inspector either before or within 1 month of their provisional registration in Malta;
- vessels of 15 years and above, shall be required to pass an inspection by an authorised flag state inspector, prior to being provisionally registered.
Appointment of resident agent in Malta
One of the requirements which may need to be adhered to successfully register a yacht under the Maltese flag is the appointment of resident agent - this is where we can help!
Non-resident owners, that is European Union citizens, Swiss citizens or residents of the European Economic Area who are not resident in Malta; and/or foreign entities enjoying legal personality, must appoint a resident agent in Malta.
The role is to act as the local representative of the international owner of the vessel registered under the Maltese flag.
The appointed Resident Agent shall have the power to:
- act as a channel of communication between the international owner and Maltese government departments and authorities;
- sign and file on behalf of the international owner, any forms and/or documents as may be required by the Maltese Government departments and authorities;
- act as a judicial representative of the international owner;
amongst several other duties and responsibilities as set provided in terms of law.
Procedure for registration of a yacht under the Maltese Flag
The procedure for the registration of a vessel under the Maltese flag is divided into two (2) stages:
- Stage 1: Provisional Registration; and
- Stage 2: Permanent Registration.
Malta Provisional Yacht Registration
The first step towards successfully registering a vessel under the Maltese flag is to provisionally register the vessel for a period of six (6) months. The applicant would need to ensure that:
- all the documents necessary for the provisional registration are duly submitted to Transport Malta;
- the proposed name of the vessel is reserved with Transport Malta;
- proof of ownership is at hand;
- where necessary, a resident agent is appointed;
- a declaration of ownership is signed before the Registrar;
- an application for Ship Radio License is duly submitted (where necessary);
- the payment of the official registration fees and annual tonnage tax is affected;
amongst other requirements, which may become applicable on a case-by-case basis.
Once the above-mentioned requirements (and any other applicable ones) are met, the vessel will be provisionally registered under the Malta flag for a period of 6 months, which period shall be extendable for a further period, or periods not exceeding in the aggregate 6 months.
A Provisional Certificate of Malta Registry will be issued to the owner of the vessel, which certificate, shall at all times be retained by the owner of the vessel, onboard of the vessel.
During the period of Provisional Registration, the owner may sail the vessel, on condition that some other steps are undertaken by the said owner, ahead of the Permanent Registration of the vessel under the Maltese flag.
Permanent Yacht Registration in Malta
Before the expiry of the provisional certificate, as issued by the Malta Registry, the owner of a vessel that has been provisionally registered under the Maltese flag, must ensure to provide the Merchant Shipping Directorate, with a number of documents, including:
- the original builder's certificate, if the vessel has not been registered elsewhere;
- a survey of the vessel, which survey shall be completed by a ship surveyor appointed by Transport Malta;
- the ship's carving and marking note duly signed by a government survey or a recognized classification society;
- a radio inspection (where necessary).
This will be the last step towards permanently registering the yacht under the Maltese flag.
Once all the necessary documents are validly submitted, a Permanent Certificate of Registration will be issued by Transport Malta for a period of 1 year.
The said Permanent Certificate of Registration would need to be renewed on an annual basis, and the applicable annual renewal fees would need to be settled before a valid renewal certificate may be issued by the Merchant Shipping Directorate.
Originally published 26/05/2021
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.