Yacht Registration in Malta: What you need to know!

Malta is one of the most sought-after regimes in the entire world when it comes to yacht registration. This should come as no surprise given the multitude of advantages enjoyed when registering a yacht in this country.

Malta’s strategic location at the heart of the Mediterranean as well as having English as an official language, makes it far easier to adapt. The success of this regime however, is more so based on the significant tax and VAT advantages, the low registration and renewal costs as well as having help and repair available at all times. Malta also offers a great amount of freedom to the yacht owners by having fewer restrictions in regard to the sale and mortgage of Maltese flagged ships.

This Article shall therefore serve as a guide for any individuals interested in registering their yachts in Malta; both as a private yacht as well as a commercial yacht, while also highlighting how DW&P can help turn your dream into reality.

Types of Yacht Registration in Malta

Yachts in Malta can be registered either as a private yacht or a commercial yacht. The Merchant Shipping Directorate in Malta defines both types of yacht registration.

A private yacht is defined as a yacht having 6 meters in length or more, which does not carry passengers for reward, and which do not engage in trade but are solely used for its enjoyment by the owner.

On the other hand, commercial yachts are generally defined as 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.

There is no right or wrong answer as to which type of registration is preferred as it will all depend on the owner’s intended use. It is up to the owners to decide whether they want to use their yacht for recreational purposes or else for making a gain. Commercial yachts are a bit more regulated, and as a result, will come with slightly higher registration and annual fees.

It is also important to note that registering as one type will not exclude the possibility of changing your mind and opting to transition from one type to the other, provided of course that the yacht in question meets the necessary requirements.

The Resident Agent

Before one can start the registration process in Malta, non-residents must appoint a resident agent to act in their stead. This means that people living in the EU, Switzerland or residents of the European Economic Area, who are not living in Malta have to appoint a resident agent in Malta.

The resident agent shall act as the local representative of the international owner of the vessel here in Malta, and shall in brief, possess the following powers:

1. act as a channel of communication between the international owner and Maltese government departments and authorities;
2. 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;
3. act as a judicial representative of the international owner;

amongst many other responsibilities as laid down by the applicable laws.

Provisional Registration

The first step in registering your yacht under the Maltese flag is to apply for provisional registration. This provisional registration shall be for a period of 6 months and can be further extended for certain periods not exceeding the aggregate 6 months.

In order to apply, the applicant would need to ensure that:

1. all the documents necessary for the provisional registration are duly submitted to Transport Malta;
2. the proposed name of the vessel is reserved with Transport Malta;
3. proof of ownership is at hand;
4. where necessary, a resident agent is appointed;
5. a declaration of ownership is signed before the Registrar;
6. an application for Ship Radio License is duly submitted (where necessary);
7. 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.

During the provisional period the owner may still sail the yacht, provided that certain criteria are met beforehand and that the Provisional Certificate of Malta Registry is always kept by the owner on board the yacht.

The fees associated by this registration shall vary depending on the size and type of yacht being registered. The fees are also subject to change so it would be best to consult an expert beforehand.

Final Registration

Before the expiration of the provisional registration period, owners must provide the Merchant Shipping Directorate with the necessary documentation in order to be fully registered under the Maltese flag.

The main documents required are generally the following:

1. the original builder’s certificate, if the vessel has not been registered elsewhere;
2. a survey of the vessel, which survey shall be completed by a ship surveyor appointed by Transport Malta;
3. the ship’s carving and marking note duly signed by a government survey or a recognized classification society;
4. a radio inspection (where necessary); amongst any others which may be required on a case by case basis.

Once the documents have been duly provided and approved, a Permanent Certificate of Registration is issued for a period of 1 year. This can be renewed annually, and annual fees will apply. Much like the registration fees, the annual fees are subject to change and vary according to the size and type of yacht.

Technical Inspections

What makes Malta’s system so successful is not just the tax benefits and low fees, but also the security that comes with it. State authorities are responsible for ensuring that ships who fly their State’s flag are never below par. Inspections are therefore carried out regularly by the competent authorities on specific instructions.

More specifically, registered yachts have to undergo certain surveys which can be carried out by an appointed ship surveyor or a recognised organisation. Certificates of compliance will be issued and remain valid for a period of 5 years.

In terms of commercial yachts, the surveys have to be carried out, either annually if the ship is larger or equal to 24 meters or else as an intermediary survey if the ship is less than 24 metres in length.

Flagging the Yacht

Flying the flag of a certain State means that the owner accepts that the ship is under the legal jurisdiction and administrative control of that State. Therefore, for a person to choose to register under one State rather than another, they must do so on the basis of which legal regime is more beneficial in terms of the advantages being offered. Some of the most prominent advantages being offered in Malta are the following:

• 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;
• no restrictions on mortgages;
• 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.

Ownership

Registering a yacht in Malta does not necessarily require the ownership of the yacht to be by a Maltese citizen. In fact, Malta leaves the door open for foreigners to register their yachts under the Maltese flag.

Ownership can either be by a natural person or by a legal person. Ownership by a natural person refers to when a private individual owns the yacht. Ownership by a legal person, on the other hand, reference to when a company validly owns a vessel.

Generally, legal corporations (i.e. legal persons) will be in the form of a Maltese shipping company, whereby the ownership of the yacht will be of the company rather than an individual.

This allows for easy trading and opens up the possibility for people living outside of Malta to register their ship under the Maltese flag. One must still remember however that in order to do this, they would still require a resident agent in Malta.

What can DW&P do for you?

Navigating through the entire process can get a little bit complicated and confusing, so that is where we come in. DW&P strives to simplify the process and place your mind at ease. That is why we offer a multitude of services, which include but are not limited to:

1. Aiding in ships sales and acquisitions.
2. Drafting and reviewing necessary contracts and agreements.

• Aiding with the registration of pleasure yachts and commercial yachts.

1. Aiding with the provisional and final registration of yachts.
2. Advice with regards to the type of registration suitable for you.
3. VAT and Tax advice.

• Company formation.
• Assistance with yearly renewals and the compilation of the necessary documents, for renewal purposes;

1. Acting as a resident agent for yacht owners living outside of Malta.
2. Handling necessary documents and communicating with the relevant officials on your behalf.

If you are interested in finding out more about the services we offer, visit our services page here: https://www.drwerner.com/en/services/yacht-registration-malta/

Alternatively, if you would like to get started, feel free to book a free consultation here: https://www.drwerner.com/en/other/book-an-appointment/