Category: Yachts
Cannes Yachting Festival 2021
Malta – The Yachting Mecca
The Benefits of Ship or Yacht Registration in Portugal, with the International Shipping Register of Madeira (MAR)
Ship or Yacht Registration in Portugal
The International Shipping Register of Madeira (MAR) was established in 1989 as part of the Madeira International Business Centre (“MIBC”) “package” of taxation benefits. Portugal is an attractive jurisdiction for ship or yacht registration, with over half a million vessels are now registered with MAR. It is also ranked the fourth international shipping register in the EU. If you are in the process of deciding where to register your vessel, Portugal should be considered.
Vessels registered with MAR carry the Portuguese flag and are subject to the International Treaties and Conventions entered into by Portugal. The register is of a high standard, has EU credibility, is not regarded as a flag of convenience, and is whitelisted in both Paris MoU and Med MoU. Moreover, it has never been regarded by the ITF as a flag of convenience.
It is important to note that the Portuguese Government is determined to boost the maritime economy, taking concrete steps to put MAR among the leading European flags. In this context we must point out that MAR is one of the first flags to fully introduce an efficient digital system, allowing for the dematerialisation of all procedures and the issuing of electronic certificates following the IMO Guidelines for the use of electronic certificates.
In the words of MAR’s Technical Commission, “Portugal considers digitalization in the maritime transport as a very relevant development, namely in respect to expediting sharing of information, improving security and traceability of documentation and reducing administrative burdens.”
It is therefore clear that MAR is offering the best quality package to owners worldwide, as any individual or entity can register a vessel with MAR. There are no nationality requirements for ship-owners of vessels registered in MAR and they are not required to have their head office in Madeira. In addition, if the entity is registered with the International Business Centre of Madeira (MIBC), and undertakes maritime transportation, it can enjoy specific tax incentives provided by the MIBC.
Advantages of Ship or Yacht Registration in Portugal
Yacht Registration with MAR:
- EU register – yacht registration in MAR provides unrestricted access to EU waters.
- Yacht owners are not required to have their head office in Madeira (it is sufficient to have local legal representation with adequate powers).
- Low levels of taxation.
- The yacht does not have to sail or be moored in Madeira.
- No citizenship requirements for the crew of commercial yachts and a flexible social security regime.
- The existence of a flexible mortgage system which allows the mortgagor and the mortgagee, by written agreement, to choose the legal system of a particular country that will govern the terms of the mortgage.
- Reduced costs of registration.
Advantages of Ship Registration in MAR:
- EU Flag – the register is of a high standard and has complete EU credibility, with access to continental and island cabotage.
- The register is included in the Paris MoU Whitelist.
- Competitive registration fees, there are no annual tonnage taxes.
- Only 30% of the safe manning must be “European”. This includes nationalities such as Polish, Russian, and Ukrainian, as well as citizens of Portuguese-speaking countries. This requirement may also be derogated if duly justified. This allows for flexible manning.
- Crew wages are exempt from income tax and from social security charges in Portugal.
- If an MIBC company is formed, with the object being maritime transportation, there is no share capital requirements.
- Shipping companies licensed to operate within MAR benefit from a corporate income tax rate of 5% until 2027. They also enjoy:
- automatic VAT registration,
- access to the Portuguese double taxation treaty network,
- exemption from withholding taxes on the distribution of dividends,
- exemption from withholding taxes on interest, royalties and service fees paid to non-residents,
- and exemption from capital duty, notary, and registration fees.
- If certain requirements are met, shipping companies may also be exempt from capital gains tax when subsidiaries are sold.
- The existence of a flexible mortgage system which allows the mortgagor and the mortgagee, by written agreement, to choose the legal system of a particular country that will govern the terms of the mortgage.
- Eight International Classification Societies are recognised in Portugal. MAR can delegate some of its functions to these societies. This can be simpler and more convenient for ship owners.
- Temporary registration is allowed by law (bareboat charter: “In” and “Out”).
- Vessels under the Portuguese flag are included in the Qualship 21 Index of the United States of America. This certificate recognises the exceptional standards of the Register.
Summary
If you are interested in finding out more about Ship or Yacht Registration in Portugal and would like to take advantages of the benefits listed within this article, please contact: advice.portugal@dixcart.com, or your usual Dixcart contact.
Dixcart Air Marine – Team Introduction
The Team and Activity
Dixcart Air Marine assists clients with the registration of yachts, ships, and aircraft in a number of different jurisdictions.
Our team of experienced professionals across the various Dixcart offices, provide a complete service for clients. Professionalism, coupled with practical experience, help guarantee a smooth process for our clients and enables them to access a range of attractive measures that are available in the different jurisdictions.
Dixcart Air Marine can coordinate the entire yacht, ship, or aircraft purchase and/or ownership. To maximise the benefits, one of our professionals should ideally be involved as early as possible – as soon as the thought of owning the asset has occurred to the client. To see the full range of services available, please click here.
Introduction to Jonathan Vassallo and Paul Harvey
Jonathan Vassallo from the Malta office and Paul Harvey from the Isle of Man office are two key members of the Dixcart Air Marine team that we are introducing you to today.
Jonathan joined Dixcart in September 2009. He is a member of the Association of Chartered Certified Accountants, the Malta Institute of Taxation, the Malta Institute of Accountants, and the Malta Institute of Management. Jonathan is also a member of the Yachting Business Section of the Malta Chamber of Commerce, Enterprise and Industry. He is the Managing Director of the Dixcart office in Malta.
Paul Harvey, an accomplished figure in offshore financial services, brings over two decades of expertise to his role at Dixcart Management (IOM) Limited. With expertise regarding superyacht holding structures, Paul collaborates closely with a network of tax advisers, lawyers, and industry experts to ensure the efficient establishment, management, and administration of these prestigious assets. His expertise extends to both private and commercial vessels.
Jonathan Vassallo – jonathan.vassallo@dixcart.com
Jonathan was appointed Director of Dixcart Management Malta Limited at the start of 2013 and Managing Director during 2018. His role is to develop and implement strategy for the Malta office ensuring that the Group’s high standards of compliance and operational control are maintained. He manages a number of relationships with international clients and particularly specialises in the areas of yachting, residence, and VAT. He has extensive experience with the registration of yachts and superyachts, the formation and administration of the relevant holding structures, and the ongoing management of yachting structures.
Before joining Dixcart, Jonathan Vassallo was involved in the manufacturing industry in Malta for thirteen years. During this term, he served as an Accountant and Financial Controller for two major furniture firms in Malta.
Paul Harvey– paul.harvey@dixcart.com
Paul is a member of the Society of Trust & Estate Practitioners (STEP) and is skilled in handling complex tax and legal matters related to superyachts. He regularly attends events such as the Monaco Yacht Show.
Paul became a member of the Society of Trust & Estate Practitioners (STEP) and joined the Dixcart office in the Isle of Man in 2009, later becoming a director of Dixcart Management (IOM) Limited in June 2017. He maintains daily engagement with clients, advisers, and yacht professionals, leveraging over 20 years of offshore financial services experience to navigate the tax and legal complexities of superyacht holding structures effectively.
Monaco Yacht Show 2019
Fort Lauderdale Boat Show
Malta Rolex Middle Sea Race
Additional Reasons to Consider Malta for Yachting Solutions
Malta: Recent History – the Marine Sector
Over the past decade, Malta has consolidated its status as an international Mediterranean centre of maritime excellence. Currently Malta has the largest shipping register in Europe and the sixth largest in the world. In addition, Malta has become a world leader for commercial yacht registration.
As well as its strategic position, in the centre of the Mediterranean, one of the main contributors to Malta’s success is the business-friendly environment adopted by the Maltese authorities. The authorities are approachable and flexible in their practices, while at the same time meticulously follow a rigid framework of guidelines and regulations, and this has created a cutting edge for Malta within this sector.
Additional Benefits in Terms of VAT – Maltese Registered Yachts
The Malta Authorities recently announced further attractive measures, which have already been put in place, regarding the importation of yachts to Malta.
Yachts, intended for commercial use, can be imported into the EU via Malta, for relevant VAT and customs procedures to be undertaken. Subsequently, the yacht can then be chartered, and can sail freely within EU waters.
Apart from the already inherent attraction for yachts to be imported into Malta, due to the low VAT rate of 18%, yachts used for commercial chartering can benefit from VAT deferral. The deferral mechanism has now been made more attractive as follows:
- Deferment of VAT on the importation of commercial yachts, by Maltese owning entities having a Maltese VAT registration, without the requirement for the importing entity to set up a bank guarantee;
- Deferment of VAT on importation of commercial yachts, by EU owning entities having a Maltese VAT registration, provided that the company appoints a VAT agent in Malta, without the requirement for the importing entity to set up a bank guarantee;
- Deferment of VAT on importation of commercial yachts by non–EU owning entities, as long as the importing entity sets up a bank guarantee for VAT, equivalent to 0.75% of the value of the yacht, capped at €1 million.
Dixcart: Yacht Registration Experience
Our office in Malta has extensive experience and can assist clients with all of the commercial aspects in relation to yacht ownership:
- Yacht ownership structures
- Importation of yachts
- Flag registrations
- Deferment applications
- Crew payrolls
- Day-to-day administration
- VAT registration in multiple jurisdictions
- Resident agent services
- Tax and VAT advice
- Accounting and secretarial services
Assistance
The Dixcart office in Malta has professionals who can assist your business with all aspects of yacht registration in Malta and can help ensure that you take advantage of the specific VAT deferment, applicable to your circumstances. Please speak to your usual Dixcart contact, or alternatively, please email: advice.malta@dixcart.com.
Hiring of Pleasure Boats in Malta – The Guidelines
The Malta Commissioner for Revenue has just published the guidelines that are to be used to determine the place of supply for the hiring of pleasure boats. These will be applicable, retrospectively, for all leases commencing on or after 1 November 2018.
These new guidelines are based on the fundamental VAT principle of ‘use and enjoyment’ and provide the mechanism to determine the amount of VAT to be paid on the lease of a pleasure boat.
The lessor (the party leasing the asset) needs to obtain from the lessee (the party paying for use of the asset), reasonable documentation and/or technical data to determine the effective use and enjoyment of the pleasure vessel both within and outside EU territorial waters.
By using a ‘Preliminary Ratio’ and an ‘Actual Ratio’ the lessor will be able to apply VAT to the proportion of the lease relating to effective use and enjoyment, within EU territorial waters.
Additional Information
The Dixcart office in Malta has extensive experience in assisting with yacht ownership and registration in Malta. Please speak to Jonathan Vassallo: advice.malta@dixcart.com or to your usual Dixcart contact.