MARITIME :: Ship Registration Malta

Published: 29th July 2008
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General Introduction



Malta is committed to further expansion as an international centre for shipping and financial services. This is manifested by the continuous development of a sophisticated legal and financial regime, by the huge investment in infrastructural services, and by the determination to succeed both on the part of the Maltese authorities and also the many highly-trained professionals on the island.



The Malta Flag is today a flag of confidence and a flag of choice, its good standing evidenced both by the number of ship owning and ship management companies of repute which register their ships in Malta. Malta appears in the White List maintained by the The Paris Memorandum of Understanding on Port State Control.



The International Transport Workers' Federation maintains a list of 32 registries which it considers to be Flags of Convenience Registries. In developing the list, the ITF considers 'ability and willingness of the flag state to enforce international minimum social standards on its vessels', the 'degree of ratification and enforcement of ILO Conventions and Recommendations' ,and 'safety and environmental record'.



Malta is a member of both the International Maritime Organisation (IMO) and the International Labour Organisation (ILO) and it has ratified all the major world maritime conventions, 



Only Panama and Liberia in this list rank ahead of Malta in the number of merchant vessels registered under flags of convenience.  Malta is also 8th in the world list of dead weight tonnage commanding some 3.86% of the overall total.



The Malta Maritime Authority (www.mma.gov.mt) is the Authority entrusted with safeguarding the reputation of the Maltese Flag by ensuring compliance with the main body of maritime legislation (the Merchant Shipping Act) a law based primarily on UK legislation. A 24-hour 7-day-a-week urgency service is offered by the MMA.



Advantages of registering a vessel under the Malta Flag





  1. The procedure for the registration of ships in Malta is well-defined and straightforward


  2. Owners, charterers and financiers of Maltese ships may benefit from highly favourable tax rates on profits derived from the ownership, sale, operation and charter of Maltese ships 


  3. There is complete exemption in Malta from stamp duties payable on the sale or transfer of a ship and the allotment of any share or stock of a company owning such a ship, exchange control, capital gains tax or VAT


  4. There are no restrictions on the sale or transfer of shares of a company owning Maltese ships


  5. There are no restrictions on the sale and mortgaging of Maltese ships


  6. There are no restrictions on the nationality of the Master, officers and crew of vessels registered under the Malta flag 


  7. Maltese ships benefit from preferential treatment in certain ports


  8. It is possible to register vessels which are still under construction as well as other marine structures which do not fall within the strict definition of ships such as oilrigs, floating docks, pontoons and barges




Which vessels may be registered?



Any type of vessel from pleasure yachts to oil rigs may be registered under the Malta Flag provided the vessel being registered is wholly owned by a Maltese citizen or, alternatively, wholly owned by a Maltese limited liability company


Moreover, vessels of any age whatsoever may be registered provided that:



(a)           ships of between 20 - 24 years of age must pass an inspection by an authorised flag     state inspector at an agreed port acceptable to the MMA before or within one (1) month of provisional registration, whereas


(b)           vessels which are 25 years old and over must pass such an inspection before being registered provisionally



Registration under the Flag of Malta involves 2 stages :





  1. Provisional registration


  2. Permanent registration




Provisional registration



Provisional registration in Malta in terms of Law has the same effect as permanent registration, and can be effected very quickly. On completion of the relevant procedures, the Registrar of Shipping in Malta will provide the ship owner with a Certificate of Provisional Registration.  The requirements for provisional registration in Malta are :






  1. an application for registration by the owner (or an authorised representative)


  2. an application for a change of name ( if required )


  3. a copy of the ship's International Tonnage Certificate ( where applicable )


  4. proof of qualification to own a Maltese ship ( and in the case of a body corporate, the memorandum and articles of association )


  5. a declaration of ownership made before the Registrar by the owner ( or an authorised representative )


  6. evidence of seaworthiness ( and in the case of trading vessels, confirmation of class )


  7. payment of initial and annual registration fees




A vessel will obtain permanent registration on presentation, during the provisional registration period of 6 months (extendable to 12 months) of certain additional documentation.  A permanent certificate of registry, once issued, may be renewed annually upon payment of annual registration fees and subject to compliance with safety requirements.



Application for  Permanent Registration



The following documents must be submitted during provisional registration:





  1. a builder's certificate if the vessel has not been registered elsewhere. Otherwise, a bill of sale or any other document by which the vessel was transferred to the applicant for registry


  2. a cancellation of registry certificate from the last country of registry, showing the vessel to be free from encumbrances or otherwise


  3. a certificate of survey and a copy of the tonnage certificate certifying that the vessel has been surveyed in accordance with Maltese regulations


  4. evidence that the vessel has been marked in accordance with the law


  5. at least one crew list accompanied by photocopies of the officers' certificates




The Incorporation of a Maltese Company



If the ship owner is not a Maltese citizen, he must firstly incorporate a limited liability company under the Merchant Shipping Act. The Registry of Companies falls within the control of the Malta Financial Services Authority and a Shipping Company :





  1. must have a minimum of 2 shareholders (who may be non-resident individuals or companies)


  2. may have nominee shareholders if the beneficial owners wish to remain anonymous


  3. must have at least one director (who may be corporate and non-resident)


  4. must have a share capital of at least € 1000 (approximately US$ 1300) which must be at least 20% paid up




Malta Companies and Tax





  1. Under the Merchant Shipping Act, all gains or profits of a Malta Company derived from the operation and ownership of a Maltese registered vessel are exempt from tax


  2. This tax benefit applies to companies owning registered vessels of not less than 1000 gross tons engaged in the carriage of goods or passengers


  3. Otherwise the company pays tax at the standard rate of 35% but with a refund to non-resident shareholders the effective tax rate is 4.9% after refund


  4. Dividends distributed by a Maltese Shipping Company to corporate shareholders are exempt from tax


  5. Interest payable to a non-resident on a loan raised for the purpose of owning or operating a registered ship is exempt from tax


  6. There is VAT exemption for yachts and pleasure craft operated for charter


  7. The sale, transfer or transmission on death of the owner of any ship or any shares in a ship-owning company is free of stamp duty




Bareboat Charter





  1. A bareboat charter is an arrangement for the hiring of a boat whereby no crew or provisions are included as party of the agreement. Instead, the people who rent the boat from the owner are responsible for taking care of such things


  2. Maltese law provides both for bareboat charter registration of foreign ships under the Malta Flag and also for the bareboat charter registration of Maltese ships under a foreign flag




The requirements for bareboat charter registration in Malta are:





  1. that the vessel must be foreign owned


  2. the vessel cannot be registered in another bareboat registry


  3. the vessel must be bareboat chartered to a Maltese citizen or to a Maltese company


  4. the Minister of Transport shall have declared the underlying registry of the vessel a 'Compatible Registry' and


  5. the filing of an Application Form duly completed by the charterer or by his authorised representative




Mortgages





  1. A ship registered in Malta, including all its equipment, machinery and other accessories may be placed as security for a loan by way of mortgage 


  2. A mortgage over a Maltese ship may be recorded in the register as soon as the vessel is registered


  3. Transfer and discharge of mortgages may be effected immediately on presentation of the relative documents


  4. Foreign mortgages are recognised and granted the same status as mortgages under the Maltese Shipping Act provided such foreign mortgages are validly recorded in terms of the relevant foreign law




Maltese mortgages provide good security for banks and other financial institutions because, inter alia:





  1. a ship owner may not delete a vessel from the Maltese register without the mortgagee's prior written consent


  2. a vessel may not be struck off the Maltese register before one month's notice is given to the mortgagee and ship owner by the Registrar of Shipping


  3. a mortgagee may take over and complete registration formalities in Malta himself (including applying for extensions, paying fees etc) in order to protect the status of the ship and the validity of its registration


  4. the Registrar of Shipping is bound, upon transfer of a vessel to new Maltese owners, to inform the mortgagee of such transfer


  5. the vessel may not be sold to foreign nationals without the mortgagee's consent




Source: International Trust Limited :: Ship Registration Malta



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