The Benefits of Registering Commercial Yachts in Malta

The Maltese Maritime flag is the most hoisted flag in Europe, and there’s good reason for that.

Malta is the perfect jurisdiction in which to incorporate a Malta company specifically designed to own super-yachts, ships etc. due to its geographical position within the EU and its rich maritime history. The Maltese flag is a reputable flag of choice for commercial yachts, VAT paid pleasure yachts, ships, bare boat charters and mortgages. Malta ratified the MLC in 2013 and has adopted all of the major international maritime conventions.

Every yacht that enters the EU should be placed in ‘free circulation’, that is to say either Customs cleared at import, manufactured in the EU, and not subsequently exported or under Temporary Admission Relief (TAR).

Registering a yacht through a Malta company presents numerous advantages as Malta offers both VAT and Tax incentives. Furthermore, through Malta’s implementation of its ‘Tonnage Tax’ system, commercial yachts benefit from having the profits on their shipping activities charged with a tonnage tax rather than income tax. This results in significant savings on the operational cost of the vessel.

Here we have outlined some of the main benefits to registering your commercial yacht under the Maltese flag.

The company is exempt from income tax

The advantage of owning a Maltese commercially registered super-yacht through a Maltese company is that the company would be fully exempt from income tax which is due on or in relationship to the ownership, operation and management of the yacht. The owner would only be liable to pay an annual tonnage tax to Transport Malta calculated on the net tonnage of the yacht and independent of actual earnings.

If the yacht does not qualify to benefit from such tax exemption, yacht financiers may still benefit from the low effective income tax rate of 5%. In addition, any foreign income tax incurred on the yacht`s commercial operations would be available as a credit to offset against the Maltese income tax, to the effect that the Maltese tax may even in certain cases be reduced to 0%.

Malta has a reciprocal tax agreement with Spain

Malta has a reciprocal tax agreement with Spain which would allow the company to be exempt from non-resident income tax on charter income which is currently charged at 24%, should the yacht carry out its chartering in Spain.

There are no restrictions on the nationality of directors or shareholders of Maltese companies

As long as the commercial yacht is registered through a Maltese company, there are no restrictions to the nationality of its directors, but the yacht would need to be registered under the name of the company and not an individual.

The Maltese flag is highly reputable.

Malta has entered into a number of treaties aimed at regulating and supervising the yachting industry, which has earned it a position on the White list on both the Paris MOU as well as the Tokyo MOU, and it has also entered into various bilateral agreements with foreign governments where Maltese ships receive preferential treatment in respect of port charges and taxes. 

Malta also carries out a highly rigorous supervisory exercise on vessels registered under its flag.

Malta’s EU flag holds the flexible benefits of an open registry

Malta does not restrict or enlist specific requirements in relation to the nationality of the crew members working on board Maltese flagged yachts. There are also no restrictions on the sale and registration of mortgages and no restrictions whilst sailing to any ports worldwide.

Dominion Marine have an office in Malta and direct relationships with Transport Malta, the VAT department, and the Malta Financial Services Authority, all of which enables us to provide an efficient and streamlined service to all of our clients.

If you are seeking further expertise on Superyacht Ownership and VAT structures, please contact our team of experts at Dominion Marine.