Advantages of the Maltese flag and a Maltese merchant shipping company

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Vessel registration under the Malta flag and the operation of Maltese ships is regulated by the Merchant Shipping Act of 1973, a law based mainly on United Kingdom legislation but subsequently revised and amended in 1986, 1988, 1990 and 2000. The main legislation is supplemented by a comprehensive set of rules and regulations

Advantages of registering your vessel under the Malta Flag:

  • Yachts may be registered on behalf of legally constituted corporate bodies or entities irrespective of nationality.
  • Twenty-four hour, seven days a week service in response to urgent matters.
  • Low company formation, ship registration and tonnage tax costs.
  • Maltese law provides for registration of yachts that are being built or equipped.
  • Attractive tax incentives to yachts and superyachts owners encouraging commercial operation.
  • No restrictions on the sale or mortgaging of Maltese registered yachts and superyachts.
  • No restrictions on the nationality of the master, officers and crew, serving on Maltese vessels.
  • No restrictions on the nationality of shareholders and directors of Maltese shipping companies.
  • A dynamic registration with one of the largest ship registers in the world and very active in EU for and international organisation such as the IMO.
  • A sovereign state, member of the European Union with political, fiscal and social stability.

Advantages of a Maltese Merchant Shipping Company (a private limited liability company):

The formation of a Maltese Shipping Company is a straightforward operation and normally actual incorporation can be established within 72 hours. Maltese Shipping Companies are established under the Merchant Shipping Act, Chapter 234 of the Laws of Malta. Resorting to the establishment of Merchant Shipping Act Company yields several benefits and advantages.

  • Shareholders may be non- resident, and there is no requirement for any Maltese resident participation in the share capital of shipping companies.
  • § Starting from financial year 2020, shipping companies are requested to keep accounting records in accordance with the Regulations and will be subject to the exemptions and disclosure requirements as detailed in the said Regulations. In certain cases, simplified audited accounts can be filed.
  • No applicable duty on documents when transferring the ownership of a vessel.
  • Attractive rate of taxation on income.

Taxation of Yacht related structures:

Malta operates, a full imputation system of taxation. Since 1990 the rate of corporate tax has been set at 35% and upon a distribution of dividends by Maltese companies, its shareholders are entitled to a credit of the tax paid by the company on the distributed profits. A tax refund arises from the full imputation system of taxation referred to above. An entitlement to a refund of 6/7ths of the tax paid by the Maltese registered company arises when the dividend is paid from the company’s Foreign Income Account or Maltese Taxed Account therefore having an approximate tax leakage of around 5.5%

When incorporating a Merchant Shipping Company under the laws of Malta, a special exemption as to the corporate tax rate applicable can be availed from. Merchant shipping companies may avail themselves of this reduced tax rate immediately without having to first pay out the 35% and then apply for a refund, thus making the process much simpler and efficient.

Initial documents needed:

For a yacht ownership structure with a Maltese flagged vessel, the below documents will need to be collected to be able to initiate the process:

  • Certified copy of passport of all proposed shareholders and directors
  • Utility bill (not older than 3 months) for all proposed shareholders and directors
  • Police conduct/ professional reference and/or bank reference for all proposed shareholders and directors
  • Builder’s certificate, if the vessel is not registered elsewhere.
  • Latest bill of sale showing ownership of the vessel.
  • Current certificate of registration (if available)
  • A Certificate of Survey and a copy of the International Tonnage Certificate. This will certify compliance with Maltese Regulations.
  • Evidence of the marking of the vessel per the law;
  • Details of latest anti-fouling material

An additional list of documents will be populated after the above documents have been reviewed.