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Why Should You Consider The Isle of Man for Private Yachting?

Posted on | by Akiko Design | Leave a Comment on Why Should You Consider The Isle of Man for Private Yachting?

In an increasingly complex regulatory and fiscal landscape, yacht owners and their advisers are looking for stable, well-regulated jurisdictions that offer clarity, flexibility, and efficiency. The Isle of Man has long been a respected centre for yacht ownership and management, and it continues to offer advantages for those involved in both private and commercial yachting.

In the Private Yachting space the Island facilitates access to Customs reliefs such as Temporary Admission for privately used yachts, provided specific criteria are met.

In this article we cover the following topics to provide a quick overview:

  • Temporary Admission Relief (TAR) for Private Yachts
  • How to Meet the Requirements of Temporary Admission Relief (TAR)
  • What Next? Things to Consider When Planning Your Yacht Fiduciary Services
  • What are Your Yacht Fiduciary Service Options? Jurisdictions & Providers

Temporary Admission Relief (TAR) for Private Yachts

Temporary Admission Relief (TAR) is a Customs procedure which allows certain goods (including means of transport – e.g., private Yachts) to be brought into the Customs Territory with total or partial relief from import duties and taxes, subject to conditions.

For example, the goods must be imported for ‘Specific Purpose’ and are intended for re-exportation within a specified period.

Whilst owners established outside of the Customs area are exempt from VAT under TAR, Customs Duty relief varies, dependent on the jurisdiction’s classification of the vessel and its Specific Purpose for being imported.

For quick reference we have provided a table of the headline details/requirements below:

EU TAR
The Vessel is registered outside of the Customs Union.
(The flag state of the Yacht is non-EU)
The vessel is used by an individual established outside of the Customs Union.
(The owning entity is established outside the EU)
The vessel must be operated by an individual established outside of the Customs Union.
(Ultimate Beneficial Owner must be resident outside the EU)
Some further conditions to note:
a. The goods must be imported with the intention of re-exporting them at a later date (Maximum 18 months);
b. No alteration of the goods is intended (allowing for maintenance/upkeep), i.e. no value is to be added;
c. The goods can be clearly identified (e.g., hull identification number etc.);
d. The overall Customs requirements are met; and
e. A guarantee is provided, if required (specific to the Member State).

How to Meet the Requirements of Temporary Admission Relief (TAR)

Thankfully there is a lot of scope for meeting the requirements for those wishing to set sail in the EU under TA:

  1. Registration of the Vessel

For a TA procedure to apply with full VAT and Customs Duty relief, the Yacht must be registered in a jurisdiction outside of the EU (it will use the flag of a Non-Member State).

Following its departure from the EU, the Isle of Man now meets this criteria, alongside traditional favourites such as the Cayman Islands.

  1. Establishment of the Individual

For our purposes, ‘individual’ refers to both Natural Persons and Corporate Entities. In this way we can have an individual established in a separate jurisdiction to the Ultimate Beneficial Owner (UBO) – often by way of a holding company, that will own the Yacht and which in turn will be subject to the local tax regime.

The jurisdiction of establishment in this case does not necessarily have to be the same as the chosen flag of the vessel.

  1. Establishment of the Ultimate Beneficial Owner (UBO) 

For the purposes of TA, so long as the UBO is resident outside of the EU, they will qualify.

What Next? Things to Consider When Planning Your Yacht Fiduciary Services

When selecting a suitable ownership structure for the registration of a Private Yacht, which will benefit from TAR within EU waters, we would suggest checking the following broad criteria.

Choosing a Jurisdiction for the Holding Structure

  • Strong economic international standards – a minimum ‘A rating’. (S&P / Moody’s)
    • Robust legal standards.
    • An OECD Whitelisted jurisdiction with a strong reputation for compliance and transparency.
    • Beneficial tax regime taxes.

Choosing a Yacht Fiduciary Service

To assist with the specialist advice, corporate structuring, and administration of the Yacht, we would recommend ensuring that your service provider ticks the following boxes:

  • Geographic location – with relation to the local tax regime and time zone (for accessibility and ease of dealing).
    • A proven track record –how established the provider is in the sector, as well as familiarity with this category of service.
    • Access to experts – with many providers, their scale often prevents direct and regular dealings with senior qualified staff members; you will want access to experts whenever you have a query or action that is required, and not to always have these dealt with by juniors.
    • Your business is valued – in an ideal situation, your business will be a priority to the provider, not just another client on the books. Finding a provider that is adaptable and responsive is key to service excellence.

What are Your Yacht Fiduciary Service Options?

With so many well-established shipping registrars and a wide selection of beneficial jurisdictions for incorporating a holding structure, you would be forgiven for having flashbacks of 2020’s uncertainty. This is where we can help.

At Dixcart, your needs are our priority – we provide a bespoke and personal service for those looking to manage and administer their luxury assets; giving you access to experts as and when you require them.

Because we are based in the Isle of Man, we benefit from our Aa3 rated jurisdiction’s political, economic and environmental stability. The Island is a self-governed Crown Dependency, setting its own laws and rates of taxation.

Whilst we can access any number of shipping registers, our local registrar has an exceptional track record of service excellence; providing an approach that blends modern flexible services and competitive rates without compromising on quality.

The beneficial tax regime, business friendly government and OECD ‘Whitelist’ status ensure that the tax vehicles we offer can help you achieve your goals whilst remaining globally compliant.

An Isle of Man registered Company enjoys the following benefits:

We have been assisting clients and their advisers for over 45 years with the effective structuring and administration of wealth, having experience of utilising multiple shipping registers to ensign vessels in line with their desired purpose. If you would like to discuss how we can assist you in achieving the effective and efficient administration of a vessel we would be delighted to hear from you. Please contact Paul Harvey at the Dixcart Office in the Isle of Man: advice.iom@dixcart.com.

Alternatively, you can connect with Paul on LinkedIn or find out more about our Dixcart Air Marine services here.

Dixcart Management (IOM) Limited is licensed by the Isle of Man Financial Services Authority.

This information is provided as guidance and should not be considered advice. The most appropriate vehicle is determined by individual client needs and specific advice should be sought.

Aviation in Malta: Market Niches and a Bright Future. Interview with the Director of the Civil Aviation Directorate.

Posted on | by Megan Raguro | Leave a Comment on Aviation in Malta: Market Niches and a Bright Future. Interview with the Director of the Civil Aviation Directorate.

Our Malta office had the pleasure to interview Capt. Charles Pace, the Director of the Civil Aviation Directorate. Capt. Pace shared his views on the current status of the aviation sector in Malta, the competitive edge that Malta has compared to other jurisdictions, new market segments and his vision for the future.

Malta is now an aviation hub, with a Maintenance, Repair and Overhaul (MRO) sector, flight training and aviation software providers, as well as increased interest in Unmanned Aerial Vehicle Development. Malta is also part of important international agreements such as the Cape Town Convention. International players such as Lufthansa, Malta Air, Wizz Air, Lauda Air and more have chosen Malta as one of the bases for their operations. What are the main drivers that led these companies to take such decisions?

“The robust legal framework, the use of the English language, a favourable taxation and also the efficiency of the Civil Aviation Directorate are the main reasons mentioned by many companies. It is a fact that many companies move operations to Malta from other jurisdictions. They tell us how difficult it can be to do business in certain countries and that we give them a level of efficiency that is highly appreciated. The fact that our staff go the extra mile to process applications and to travel at short notice is extremely appreciated, as well as the availability, accessibility and willingness of our inspectors to assist during the application process. We also have an online system through which all applications are received. This cuts down on time and paperwork and is a transparent way of processing applications. The team at CAD has grown in size and, at the same time, is also much more proficient. Through a balanced pragmatic approach, we try to tick all the boxes.”

Malta is also an interesting jurisdiction for aircraft leasing structures, and there is a strong intention to further reinforce Malta’s offering in this space. How does this work? What are the current advantages for leasing structures in Malta and, in your opinion, what are the elements needed to further reinforce Malta’s offering in aircraft leasing?

“Leasing has been present in Malta for a while now. A few years ago, we carried out an analysis of our laws and made some tweaks to improve Malta’s position. Today, we have a very good product and companies have started to look at Malta as an alternative jurisdiction. In this period, we would need more exposure as well as buy in by the local banks. This being said, there are several companies that already operate through Malta. I would estimate around 400 aircraft are leased through Malta based companies, and this could easily double in the near future with other companies taking the plunge. We will have to prepare for an increase of the market size, for instance by creating university degrees that include modules related to leasing, and aviation accounting practices. We need more visibility both internationally and locally, to attract more business but also to create the talent that is needed to service a growing industry.”

In recent years, there is the tendency for airlines to lease their aircraft, rather than buying them. Many Malta AOCs owners offer this kind of services to commercial airlines – do you see space for further growth? Why is Malta better positioned, compared to other jurisdictions?

“Aircraft, crew, maintenance, and insurance (ACMI) has been very popular even pre COVID-19. Today, with the delays in production of new aircraft and also groundings due to engine problems, ACMI operators are very much in demand.  The Phenomena allows legacy carriers to increase capacity on demand and to replace grounded aircraft. I believe that this will remain a strong market for at least 3 more years due to lack of capacity. The problem is that many carriers are not letting go of aircraft as the new ones on order are delayed. With this scheme, we need to keep in mind however that the margins are tight, and many airlines will struggle despite the high demand. Cost is continuing to increase due to labour demands, fuel (even more with the introduction of SAF mandates kicking in next year) and overflying charges. This leaves airlines in precarious situations as we have seen with first quarter results of at least two major groups lately.”

Since you became Director of the Civil Aviation Directorate, in 2016, the industry grew and so did the Malta Aircraft Registry, which now counts over 880 aircraft and 52 Air Operator Certificate owners. Such growth needs to be constantly supported by the various administrative structures. What were the main challenges that the CAD had to face, to keep up with this growth? 

“Working within the public sector might present, at times, significant challenges because you often need a private sector mentality and the flexibility of a private enterprise to be able to give stakeholders what they need. For instance, some of the main issues were improving the remuneration for staff, getting enough headcount and have the agility to change things quickly.

The industry has gone through highs and lows both of which have brought challenges. High demand for flying means airlines recruit and offer better conditions. This makes it difficult to find people to take up regulatory posts and therefore retention becomes even more crucial. During the pandemic, the situation was the opposite, with many looking for a job but unfortunately for us, some of those who came to us for a job in those dark days left as soon as things improved in the industry. Loosing people at short notice after giving them training is a bitter pill to swallow but is something that happens in many economic sectors. 

A significant change that happened in recent years is that when I first joined, we did not accept helicopters or simulators. Today, on the contrary, we regulate the full range of activities. We have examination centres in other countries and have quite a few projects in the pipeline. Malta offers a low fixed rate of income tax to attract individuals to Malta and this has proven to be a very successful initiative that distinguishes Malta from other countries. In a way, we have been victim of our own success, and it is now difficult to match expectations of the industry while following the procedures of the public sector.”

Unmanned Aerial Vehicles are another sub sector in which Malta aims to become a main player at the international level. UAVs open the door to a multitude of services and operations. What are the main opportunities that you see, in this space?

“Since legislation was introduced by the EU, we have been monitoring the developments. We have a dedicated portal for UAVs and are actively seeking to bring to the island a testing facility that will allow research or testing of larger drones. I am very much interested in using new technology to improve urban mobility: I believe that this will be the future and we need to embrace it. The size of Malta makes it even easier as trips are short favouring electric aircraft which might not be that yet suitable for longer flights. One of the main challenges with new technology is the rather lengthy process of certification by EASA. Although millions are poured into Research and Development, the process to obtain certification and start commercial operations is taking longer than expected.”

You have recently returned from Geneva, where the CAD participated at the European Business Aviation Convention & Exhibition (EBACE) 2024. Was the event successful and do we expect further growth?

“Once again, the CAD participated with a stand at EBACE, in conjunction with the Malta Business Aviation Association. It was yet another opportunity to network, promote Malta and I must say that even this year CAD was very much busy meeting prospective clients and discussing future investments in Malta. The response was very strong, even more than expected, which indicates that we might be in for a productive period in the coming months.”

A look at the future: what do you think Aviation in Malta will look like, in 2035?

“I honestly think that the demand will peak in the next 5 years. I think there will be less airlines around and larger airlines will control the market.  I hope that, by then, we would deploy more aerial vehicles which would replace cars and even certain ferry boats between the islands.”

Dixcart Air Marine

Through our team of experienced professionals, Dixcart Management Malta Limited will assist you in all aspects of registering your aircraft in Malta. Services range from incorporation of the entity owning the aircraft in Malta and full corporate and tax compliance, to the registration of the aircraft under the Maltese Registry, whilst ensuring full compliance with Maltese Aviation legislation.

Additional Information

If you would like further information regarding Aircraft Registration in Malta, please speak to Jonathan Vassallo: advice.malta@dixcart.com, at the Dixcart office in Malta or to your usual Dixcart contact.

Charting New Waters: The Market Effects of Malta’s Small Commercial Yacht Code

Posted on | by Megan Raguro | Leave a Comment on Charting New Waters: The Market Effects of Malta’s Small Commercial Yacht Code

The Malta’s Small Commercial Yacht Code is the latest addition to the Maltese yacht legislation. Malta offers deep natural harbours, a strategic position in the middle of the Mediterranean, a climate with 300 days on sunshine per year, widespread use of English and an attractive lifestyle. Add these elements to a robust regulatory framework, state of the art marinas, refit and repair facilities, highly professional international operators and service providers and you will obtain a fully-fledged, international maritime hub. Malta has lined up, over the years, all requirements to be attractive in the yacht and superyacht industry.

The advantages of the Malta Flag

Malta has a long maritime tradition, with a very deep understanding of the industry and a reputable and an internationally recognised register, all supported by a clear, business-oriented vision. Having a yacht flying the Malta flag has numerous advantages, and we invite all those interested to read our article on why considering to register a vessel under the Malta flag.

A forward-looking authority that listens to the operators

The Merchant Shipping Directorate introduced Malta’s Small Commercial Yacht Code (sCYC), effective from the 1st of April 2024, following an extensive consultation process that involved all relevant industry stakeholders. The small commercial yacht segment has been in constant increase in recent years, and the introduction of the sCYC aims to meet the needs, demands and technological advancements of the yachting industry while, at the same time, ensuring compliance with international safety standards.

Applicability and exclusions

The Code is applicable to yachts under commercial use that:

  1. Are at least 12 metres in hull length;
  2. Are less than 24 metres in length;
  3. Are engaged in commercial operations;
  4. Carry no more than 12 passengers.

The code does not apply to Category D vessels, Rigid Inflatable Boats (RIBs), military vessels and any other vessel that is operated for non-commercial use.

The code also states that yachts may be exempted, on a case-by-case basis, and at the sole discretion of the Administration, from any of the Code’s requirements which are proven to be disproportionately onerous and technically impracticable for the yacht.

What changes for the small commercial yachts

One of the most relevant changes is that, under the sCYC, yachts from 12 metres, which previously fell outside the scope of the Commercial Yacht Code (CYC), may also be registered commercially under the Malta flag.

The sCYC updates and replaces the requirements included in the CYC, and all CYC certified yachts are deemed, automatically, to be compliant with the sCYC. However, the sCYC states that any small commercial yacht must be compliant with the new requirements at the time of the vessel’s first renewal survey conducted after 1st June 2024. In addition, sCYC Certified Yachts operating in the territorial waters of other countries must also adhere to any additional requirements stipulated by those specific countries.

The Small Commercial Yacht Code identifies the requirements in terms of safety, crew welfare and pollution prevention that are appropriate to vessels sized between 12 and 24 metres. The regulator addresses the needs of the operators while maintaining these requirements in line with those set out in international conventions and EU Regulations and Directives. This approach of using the EU Recreational Craft Directive (2013/53/EU, as amended) as the basis for the Code is clearly visible with regards to yacht’s design, stability and structure.

Conclusion

The new Small Commercial Yacht Code caters for the specific needs of this niche market. The code encourages more yacht owners to adopt the Malta flag and join the charter market by operating commercially in the Mediterranean and beyond. With this Code, the regulator addresses and accommodates the unique features of this niche market that has been gaining relevance in recent years.

Dixcart in Malta

At Dixcart Malta we have a dedicated team of professionals dealing with yachting matters including, but not limited to, yacht importation, flag registration, resident agent services, crew payroll. We are also able to assist with your Yachting related needs.

Additional Information

For further information about Malta Maritime services, please contact Jonathan Vassallo, at the Dixcart office in Malta: advice.malta@dixcart.com. Alternatively, please speak to your usual Dixcart contact.

Isle of Man: A First-Choice jurisdiction for Non-EU Superyacht Owners

Posted on | by Megan Raguro | Leave a Comment on Isle of Man: A First-Choice jurisdiction for Non-EU Superyacht Owners

The Isle of Man has a long history of maritime structuring, and Superyacht planning in particular. In recent times, there has been a growing trend in the use of Isle of Man Corporate vehicles for the ownership of Non-EU clients’ Superyachts.

In this short article we will take a flying look at why the Isle of Man has become a first-choice jurisdiction for Non-EU Superyacht Owners. Although there are specific planning opportunities depending on the owner’s jurisdiction of Tax Residency, we will take a focus on the more general advantage that Temporary Admission offers.

1. About The Isle of Man

The Isle of Man is a self-governing Crown Dependency, possessing its own Government which sets the island’s laws and tax regime. The Isle of Man offers a tax-friendly environment for corporate entities, making it a prime location for establishing Special Purpose Vehicles (SPVs) for luxury asset holding and more. Notably, the island features zero rates for Corporate Tax and Capital Gains Tax.

In almost all facets the Isle of Man is independent from the United Kingdom – almost all. Importantly, as a Crown Dependency, the UK is responsible for the island’s international affairs. Prior to Brexit, the Isle of Man had a special relationship with the European Union that allowed the island to take part in the EU Customs Union and the Single Market enjoyed by Member States.

When the UK left the EU, the island’s special relationship also came to an end, meaning the Isle of Man also lost its unique access to the EU Customs Union and Single Market.

Whilst the end of the special relationship undoubtedly had mixed results, one positive outcome was access to a VAT importation procedure known as Temporary Admission. Temporary Admission applies to the importation of a wide range of goods, including Superyachts for our purposes.

You can read more about why you should consider the Isle of Man for Yachting Post-Brexit here.

2. Temporary Admission Overview

Superyachts originating from outside the EU must be imported into the Customs Union, which can subject them to VAT at the local standard rate. This would result in a VAT liability based on the vessel’s value at the time of importation at the prevailing rate within the country of importation. Therefore, this represents a significant cost for owners of boats in excess of 24m+ in length. However, Temporary Admission (TA) can help mitigate this for private yachts.

The Istanbul Convention on TA is a Customs procedure and allows defined goods, such as means of transportation like Superyachts, to be brought into the Customs Territory with total or partial relief from import duties and taxes, subject to meeting certain conditions. For example, the goods must be imported for ‘Specific Purpose’ and are intended for re-exportation within a specified period (Article CUSTMS.16(1)).

Where TA is applicable, owners established outside of the EU who are operating private Superyachts are exempt from VAT on import, albeit Customs Duty relief varies, dependent on the jurisdiction’s classification of the vessel and its Specific Purpose for being imported.


We have provided a quick reference diagram that covers the headline details and requirements below:

Superyacht Holding Structure for Temporary Admission

Rarely is it a good idea to own a luxury asset directly, especially in the instance of a Superyacht or Aircraft. Utilising a corporate holding entity is not only helpful for mitigating indirect tax implications, but also ringfencing the legal liability of financing and operating the craft.

You can read more about the benefits of utilising an Isle of Man SPV for the ownership and financing of your Superyacht here.

As corporate ownership is the preferred method of ownership in 99% of cases, the domicile of the company will be particularly relevant if cruising in EU waters is desirable. Therefore, the owner will need to incorporate a holding entity in any Non-Eu jurisdiction to utilise Temporary Admission.

Note that the jurisdiction of establishment in this case does not necessarily have to be the same as the chosen flag of the vessel. You can read more about the various popular shipping / yacht registries here.

The Isle of Man presents a neutral tax base and stable legislative environment that is well-regarded globally for its professional services and approach to regulation. Where the Isle of Man is elected for the holding vehicle, typically either an Isle of Man Companies Act 2006 Company and/or an Isle of Man Limited Partnership incorporated with Limited Liability are the vehicles of choice. You can read more about these corporate vehicles and more in this article.

You can find some relevant case studies that cover the use of Isle of Man corporate structuring for Superyacht holding here.

3. Your Trust & Corporate Service Provider

Choosing the right Trust & Corporate Service Provider (TCSP) for your Superyacht holding vehicle is a crucial decision that requires the careful consideration of several key factors. Below you will find a short list of questions to help ensure that you select a provider that aligns with your objectives.

Is the Trust and Corporate Service Provider Well Established?

Dixcart Isle of Man has been providing Corporate Services to the owners of High Net Worth Individuals and Family Offices for over 30 years and are exceptionally well positioned to assist clients seeking to undertake corporate structuring regarding their Superyachts.

Does the Trust and Corporate Service Provider Have Professionally Qualified and Experienced Staff and Will you Have a Dedicated Point of Contact?

Our qualified accountants, trustees, chartered Secretaries, compliance professionals and more will always be on hand to assist. Due to our low levels of staff turnover, you can be confident that the relationships you build with our team will be long lasting. The Directors appointed to your holding structure will be your dedicated points of contact from beginning to end.

Does the Trust and Corporate service provider have a Transparent Fee Structure?

As most admin and compliance carried out by Trust and Corporate Service Providers is delivered on a ‘time-spent’ basis (i.e. at hourly rates), you need to ensure that the fees are transparent and that you will never be billed without understanding what it is you are paying for. At Dixcart, we prioritise transparency and undertake regular reviews to ensure a fair and open relationship with our clients and advisers. We always provide advance notice and secure client approval before taking any fee-related actions, as we believe trust is essential in nurturing sustainable relationships.

Does the Trust & Corporate Service Provider have robust compliance and regulatory standards?

Whilst it may not initially seem like the highest priority, it cannot be understated just how important the internal governance and compliance controls of the Trust and Corporate Service Provider are. This essential work is the backbone of any risk management, providing the front line of defence when it comes to any legal or tax challenges. Additionally, as the Trust & Corporate Service Provider will likely have a number of clients, you will want to ensure that their working practices are robust and in line with best practices. For example, where the TCSP runs into regulatory issues it can lead to clients having to search for a new service provider – which can be a costly and time-consuming job. At Dixcart we identify compliance as a competitive advantage, simply because it means we’re here for the long run. Our clients can rest assured that all activity is undertaken with a view to true sustainability.

Does the Trust & Corporate Service Provider have access to a body of industry professionals?

Dixcart Isle of Man have cultivated robust partnerships with leading experts across various relevant fields in the yachting industry, ranging from tax and legal planning to yacht construction, yacht management and more. This means that no matter what stage you are at, whether a new build or existing structure, we can assist clients in achieving their objectives.

4. More Than Just Superyachts

This last section is just to simply note that, where we can undertake Superyacht structuring for clients and their advisers, there are often other planning opportunities that we can assist with.

For instance, where the client is living in a jurisdiction that is not their country of origin or there is some form of international investment being undertaken, there can be significant benefits to utilising an Isle of Man Trust & Corporate Services Provider, such as Dixcart.

You can read more about all of the ways in which a Trust & Corporate Service Provider can augment your worldwide activities.

Get in Touch

If you require further information regarding the use of Isle of Man corporate structures for the purpose of holding assets such as a Superyacht, please feel free to get in touch: advice.iom@dixcart.com

Dixcart Management (IOM) Limited is Licensed by the Isle of Man Financial Services Authority

Malta Aircraft Registration Cleared for Take-off

Posted on | by Akiko Design | Leave a Comment on Malta Aircraft Registration Cleared for Take-off

Background

Malta’s strategic geographical position has assisted its aviation industry to present numerous economic opportunities, for many years. The importance of the Malta aviation sector has led the Maltese Authorities to strengthen its aviation framework to further enhance aircraft registration and aircraft operator licensing.

Malta and the Aircraft Registration Act

Malta has aimed to position itself as one of the primary aviation hubs in the EU by continually reviewing and bolstering its aviation registry. The available aviation legislation provides the aviation industry with a solid foundation. This is further complemented by; competitive aviation registration costs, the authority’s practical understanding of the aviation sector, and favourable corporate structures. As a result, the aviation framework provides several benefits to individuals seeking to register an aircraft on the island.

The importance of Malta’s flag has already been proved within the aviation industry and the inception of the Malta Aircraft Registration Act in 2010, positioned Malta as having one of the most reputable aircraft registers, within the aviation sector.

The Aircraft Registration Act has helped to enhance the aviation framework on the island. Malta has also implemented the ‘Cape Town Convention in Interests in Mobile Equipment’ and its ‘Aircraft Protocol’. Malta took additional measures to boost the aviation industry in 2012, by establishing the Safi Aviation Park, providing a number of aviation services, including training and repairs.

Benefits of Aircraft Registration in Malta

There are many benefits and innovative concepts relating to aircraft registration in Malta.

Amongst these, as mentioned above, was the enactment of the Aircraft Registration Act (Chapter 503, Laws of Malta), which came into force on 1st October 2010. This new regime was implemented to regulate the registration of aircraft, mortgages, and other securities relating to aircraft.

  • In terms of Maltese legislation, an aircraft may be registered by; an owner who operates an aircraft, or an owner of an aircraft under construction (or an aircraft temporarily not being used or managed), or an operator of an aircraft under  temporary title (subject to certain conditions), or a buyer of an aircraft under a condition of sale or title reservation agreement.

Additional benefits include:

A. More visibility of rights and interests in relation to aircraft, through the updating of the National Register;

B. Incentives to encourage the development of finance and operating leases relating to aircraft. Legislation provides clear rules on the tax treatment of the finance charge, available tax deductions to finance lessors, and capital allowances for lessees;

C. Broader registration options, extending to aircraft under construction or temporarily not in service and aircraft under a temporary title;

D. Recognition of fractional ownership of aircraft;

E. No withholding tax on lease payments where the lessor is not a tax resident of Malta;

F. Competitive minimum depreciation periods for aircraft;

G. The private use of an aircraft by an individual who is not resident in Malta and is an employee/officer of an employer/company/partnership, whose business activities include the ownership/leasing/operation of aircraft used for international transport, does not constitute a taxable fringe benefit.

H. Legislation implementation including the provision of the Cape Town Convention on ‘International Interests in Mobile Equipment’ and its ‘Aircraft Protocol’, thereby granting secured lenders more protection and more effective remedies whilst also enabling lower borrowing costs.

Tax, Standards and Flexibility Advantages of Private and Commercial Aircraft Registration in Malta 

Tax

Since 2007, Malta has offered an attractive corporate tax system whereby non-residents can claim tax refunds. In practical terms, the standard 35% corporate tax rate is often effectively reduced to between 0% and 5%.

If you are considering aircraft registration in Malta, another tax benefit is that income, from the international transport of goods and passengers outside the country, is exempt from Maltese tax.

As an EU member state since 2004, the Maltese aircraft register permits free circulation of aircraft in the eurozone, which allows tax-free commercial operation.

VAT Treatment

The VAT treatment for aircraft leasing makes Malta an attractive jurisdiction for private and commercial aircraft registration, whilst ensuring full adherence to EU laws and regulations. The rules take into account the amount of time spent by an aircraft within EU airspace.

The imposition of VAT in Malta varies according to how an aircraft is used. The key differentiation is between, an aircraft being used by an airline operator mainly for ‘reward’ in relation to the international transport of goods or passengers, or an aircraft that is being used purely for private use.

VAT implications, such as those applicable in other EU member states, are also relevant in relation to; importations, intra-community acquisitions, and/or supply of aircraft. The intra-community purchase, importation or supply of aircraft destined for use by an airline operator chiefly for international transport of passengers or goods is classified as an exempt credit supply.

The following are additional exempt credit supplies:

(a) Supplies of equipment to constructors, owners, or operators of an aircraft;

(b) Supplies of services consisting of the modification, maintenance, chartering and hiring of an aircraft.

The VAT treatment applies to all aircraft, other than those used by airline operators for international traffic, as a VAT exemption applies in this latter case.

According to Malta’s VAT legislation, the lease of an aircraft, which airline operators do not use for international traffic, is the supply of a service subject to VAT, with the right of deduction of input VAT by the lessor.

In terms of the VAT simplification procedure, the portion of the lease that will be subject to VAT, depends on the amount of time that the aircraft is used in EU airspace. As it is difficult to identify the movement of a plane in advance and the period in which the aircraft will be operated in EU airspace, Malta applies an ‘expert technical test,’ to estimate the portion of the lease that will be subject to VAT. The standard Malta VAT rate of 18% is applicable on the established percentage of the lease that is deemed to be related to the use of the aircraft in EU airspace.

In addition, Malta offers a very solid legislative environment, with an extensive double-tax treaty network and transparency of rights and interests.

Standards

Falling under the jurisdiction of the European Union Aviation Safety Agency (EASA),  the Maltese aircraft register implements some of the highest levels of regulation in the world. Aircraft registration in Malta offers business jet owners peace of mind, with its International Civil Aviation Organisation (ICAO) rating, testament to stringent safety and security standards.

In addition, Malta adheres to the Cape Town Convention on ‘International Interests in Mobile Equipment’, which specifies international standards for leases, security interests and the registration of contracts.

Flexibility

Aircraft registration in Malta offers unparalleled flexibility for international operators. Aircraft on the Maltese aircraft register can be based and freely operated from anywhere globally.

It is also possible to add an aircraft that is currently under construction or ‘out of action’ to the Malta aircraft register.

Aircraft registration in Malta allows operators to take advantage of fractional ownership of a single aircraft. The potential benefits are enormous, with several co-owners being able to detail a percentage stake, each financed by a separate creditor.

How Can Dixcart Help?

Through our team of experienced professionals, Dixcart Management Malta Limited will assist you in all aspects of registering your aircraft in Malta. Services range from incorporation of the entity owning the aircraft in Malta and full corporate and tax compliance, to the registration of the aircraft under the Maltese Registry, whilst ensuring full compliance with Maltese Aviation legislation.

Additional Information

If you would like further information regarding Aircraft Registration in Malta, please speak to Jonathan Vassallo: advice.malta@dixcart.com, at the Dixcart office in Malta or to your usual Dixcart contact.

Yacht Registration is on The Rise – Where to Register Your Pleasure Yacht?

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The global tourism industry was brought to a halt as COVID-19 restrictions saw holidays being cancelled ‘en masse’ last year. As international travel looks to be opening up again, HNWIs will play a key role in reviving the sector and one particular trend we have seen them be part of, is the purchase and registration of private yachts and/or the chartering of private yachts.

Registering your Yacht

As with any valuable asset, the ownership structure of your yacht must be carefully considered and the jurisdiction in which the yacht is to be registered is also very important. The flag chosen for registration is one of the most important decisions. Dixcart has extensive expertise in registering yachts in a variety of jurisdictions, where we have offices, in order to help simplify the process.  Here are also some top tips to think about when registering your yacht: Luxury Yachts – Top Tips for Tax Efficient Registration.

Here is a snapshot of some of the best jurisdictions for yacht registration around the world:
CYPRUS

Cyprus is a key maritime centre and is recognised as one of the most accessible registries in the EU. It has not only grown in size in the last two decades but has also made a considerable effort to increase the quality of its fleet and related services. As a result, the Cyprus flag is now classified on the whitelist of the Paris and Tokyo MOUs (Flags securing the highest rating in relation to the Memorandum of Understandings on Port State Control).

Due to its strategic location at the gateway of Europe, Africa, Asia, and the Middle East, it is a hub for shipowners and investors from all over the world, and there has been a rapid growth in the number of Cyprus shipping companies in recent years.

The procedure for registering vessels under the Cyprus flag has been designed to attract foreign investment and to build a dependable reputation, to be recognised by all of the international shipping authorities. 

Cyprus offers competitive yacht registration fees, low ongoing annual fees for yacht owners, and an attractive tax treatment for Officers and crew working on a Cyprus registered yacht (whereby they are not subject to income tax), as well as a series of other tax advantages including no tax on profits from the operational or management profits, no tax on income or dividends received from a ship management company, and a favourable tonnage tax scheme, based on gross tonnage.

The common practice for those wishing to register a vessel under the Cyprus flag is to incorporate a company in Cyprus, which will either acquire the yacht in its name, or bareboat charter the yacht. Cyprus offers a competitive rate of corporate income tax at 12.5% and low operating costs for Cyprus-owned companies. In addition, there is no estate duty on the inheritance of shares in a Cyprus shipping company and no stamp duty is payable on the ship mortgage deeds.

Find out more: Key advantages of registering your pleasure yacht in Cyprus

GUERNSEY

As a crown dependency, Guernsey has a very reputable yacht registry. It is a member of the ‘Red Ensign Group’ of British ship registries and its yachts enjoy the high standards associated with the red ensign flag.

By registering a yacht in Guernsey, owners can benefit from the advantages of a tax efficient and stable jurisdiction and the favourable tax laws of the Bailiwick of Guernsey. There is also the advantage of using a Guernsey Corporate structure to own and operate a yacht which can provide asset protection for the owner, together with other benefits.

Guernsey registration is valid internationally and all documentation is issued in English which is widely accepted around the world. There are no requirements for a Guernsey-registered yacht to physically visit Guernsey and owners have the ability to obtain a provisional registration to cover the vessel for navigation immediately after purchase. 

Another very attractive factor is that Guernsey is outside the VAT territory of the EU making the register useful for non-EU resident owners wanting to operate their vessel VAT free in Europe, and who are eligible to do so under Temporary Admission (Temporary Importation) relief.

Find out more: Benefits of Registering a Yacht in Guernsey

MALTA

Malta has the largest shipping register in Europe and is the sixth largest in the world. The procedure for registering a yacht in Malta is relatively straightforward; the Maltese authorities are approachable, whilst at the same time, meticulously follow a rigid framework of guidelines and regulations, creating a cutting edge for Malta within this sector.

The Malta flag is a European flag, a flag of confidence and a flag of choice.

Many leading international banks and financiers often recommend the Maltese register. This is due to the several advantages available:

  • No trading restrictions and preferential treatment in many ports.
  • The Maltese flag is on the white list of the Paris MoU, Tokyo MoU and on the Low Risk Ship List of the Paris MoU*. In addition, Malta has adopted all international Maritime Conventions.
  • All yachts can be registered in the name of legally constituted corporate bodies or entities (irrespective of nationality), or by European Union Citizens.
  • A Maltese yacht may also be bareboat charter registered under another flag.

Provisional registration is valid for six months, although this can be extended by a further six months; by this time all of the documentation must have been completed for the permanent registration. 

Individuals interested in registering their yacht in Malta, might wish to consider using a Maltese Cell Company. Shipping and Aviation Cell Company Regulations provide the opportunity to use a new cell structure for companies operating in the fields of shipping and aviation, and are treated as separate legal entities. This means assets and liabilities relevant to the individual cell can be segregated from the assets and liabilities of non-cellular elements, and from the other cells which may be held within the structure. A relatively simple example might be where one cell owns yacht A, the second cell owns yacht B, the third cell owns yacht C, and cell D owns the business matters in relation to ‘yacht management’. They can all be separated within the structure to ensure extra protection of the assets.

Malta is continuously reviewing their maritime legislation and introducing new regulations, ‘leading the way’ in terms of new initiatives in this sector. This includes yacht owners that have larger vessels and need to meet obligations for commercial passenger ships.

It is widely recognised when considering the operational pattern and risk profile of yachts, that these requirements, are in some instances disproportionately onerous and impractical in terms of design and implementation. As the trend for larger commercial yachts is growing, the 12-passenger limitation rule has become more problematic, resulting in an increase in administration for a number of organisations. This, combined with encouragement from the yachting industry, has provided impetus for Malta to develop the ‘Passenger Yacht Code’, to meet industry demands.

The introduction of the ‘Malta Passenger Yacht Code’ is applicable to passenger yachts which carry between 12 and 36 passengers, do not carry cargo, and which sail internationally. It is certainly a welcome development for those who plan to register larger commercial yachts under the Malta flag. It offers a solution to the many technical issues and concerns which were previously faced by prospective registrants.

Find out more: Why Malta is a great location for flagging or reflagging a yacht

PORTUGAL – MADEIRA

Madeira is part of Portugal and has full membership of the EU. This enables yacht purchasers to fully comply with EU legislation and the International Shipping Register of Madeira (MAR) is internationally recognised as a credible and competitive option in comparison to other shipping registers.

MAR maintains the high quality and safety standards of an EU register. It is regarded by the International Transport Workers’ Federation (ITF) as a flag of convenience and is included in the Paris Memorandum of Understanding (MOU) White List*.

An advantage of registering a yacht in Madeira is that it is an EU Register which allows full access to navigation in EU waters without any types of restriction for either commercial or private yachts.In addition, its EU standing has the advantage of providing substance to the VAT status of yachts registered in Madeira that operate within EU waters.

Madeira also takes into consideration the purchase of second-hand yachts. Portuguese VAT is applied to the lower acquisition price, as rules allow for devaluation suffered by the yacht (deemed market value). This can lead to a significant reduction in VAT.

Yachts that are commercially registered in MAR and are (i) used for navigation on the high seas and (ii) engaged in commercial/charter activities, benefit from several VAT exemptions:

  • the acquisition price of the yacht;
  • repair, modification and maintenance operations of the yacht;
  • fuel and oil supply;
  • the supply of goods (provisions) to have on board; and
  • the supply of equipment.

In addition, there are no citizenship requirements for the crew, and they are exempt from personal income taxes. The crew also benefit from a flexible social security regime; crew members are not obliged to contribute to the Portuguese social security regime, provided that an alternative pension scheme is guaranteed.

As mentioned above, when we have looked at other jurisdictions, many yacht owners choose to register their vessel via a company structure. The International Business Centre of Madeira (MIBC), with its advantageous tax regime, provides a highly competitive package of tax benefits. Its reduced direct taxation, with effective corporate income tax rate of 5% until 2027, combined with an exemption from withholding tax (providing the shareholders are resident in an EU jurisdiction) on payments of dividends, interest, and royalties to non-residents of Portugal, makes it an attractive location for yacht operating companies.

Madeira companies also benefit from automatic VAT registration on incorporation and are instantly provided with a VAT registration number. This makes it easier for such companies to take advantage of the various benefits available.

Madeira yacht owning companies are exempt from the initial yacht registration fee and receive a 20% reduction in the annual yacht registration fee. Plus, withholding taxes on dividends can be eliminated by routing the investment in the Madeira company through an EU holding company, for example a Maltese holding company.

Find out more: Why consider Portugal for yacht registration?

Summary

Dixcart Air Marine assists clients who own, or wish to own, a yacht. Our team of experienced professionals can provide a wide variety of services including; pre-structuring and ownership advice, registering the yacht, the accounting, added value services, tax planning, assistance with crewing and payroll (if required), and ongoing annual requirements. If you would like to speak to one of our professional advisers, please get in touch:

*White List Paris and Tokyo MOUs: Flags securing the highest rating in relation to the Memorandum of Understandings on Port State Control.

Full Fiduciary Licence granted by the Guernsey Financial Services Commission. Guernsey Registered Company Number: 6512.

Malta Initiative Moves Forward – A Shared Database of Ships Linked to Criminal Activity

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Background

Crime-linked vessels are an unfortunate reality worldwide.

The lack of information about vessels can result in countries flagging or re-flagging ships involved in criminal activities, or letting such vessels sail out of their ports unimpeded.

Main Concerns for Malta

Malta has had long-term concerns regarding contraband  linked to Italian organised crime as well as to Libyan militia groups.

The head of Malta’s sanction board Neville Aquilina, detailed in an International Maritime Organisation (IMO) Assembly “mechanisms for the full implementation of UN sanctions requirements are either too weak or inexistent”.

In addition, vessels which have been sanctioned in one country are able to sail to another jurisdiction, to obtain their license. This is possible because countries which de-flag vessels do not have the obligation of informing other countries about this and/or other actions taken.

International Database Proposal

In March 2020, in a meeting arranged by the IMO and the International Maritime Law Institute (IMLI), Malta proposed an idea to the EU to deal with this issue:

  • Malta suggested the idea of building a global database of vessels or companies, connected to illicit activities or subject to international sanctions, and for this database to be shared between countries, to help them make informed decisions.

The goal is to strengthen international maritime law, specifically, making it more difficult for criminals to obtain vessel licenses when they sail from one country to another, after their ship has been de-flagged for sanction violations in a previous country.

International Database Creation

In addition, this new information about vessels worldwide will make it easier to carry out investigations. Currently these can take years to complete because of the lack of information available.

Malta raised this idea again in 2021, during a follow-up event. In April 2021 the European Commission agreed to start working on a database across the EU, and to introduce it as soon as possible, in the forthcoming months.

Malta’s Standing

Located centrally in the middle of Europe and to the north of Africa, Malta is ranked  sixth in terms of world ship registration and regards this new initiative as being extremely important.

Implementation Intentions

Even though the objective for the database is to be used by all of the IMO state members, the IMO has not, as yet, committed to a date to implement the database.

Dixcart will keep you updated.

Additional Information

For further information about the Malta flag please contact Jonathan Vassallo, at the Dixcart office in Malta: advice.malta@dixcart.com. Alternatively, please speak to your usual Dixcart contact.

The Benefits of Ship or Yacht Registration in Portugal, with the International Shipping Register of Madeira (MAR)

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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

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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 Vassallo

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.

The Malta Aircraft Registration Regime – A Favourable Aviation Base in the EU

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Background – Malta Aircraft Registration

Malta has implemented an aircraft registration regime, structured in a manner to accommodate efficient registration of smaller aircrafts, in particular business jets.  The regime is governed by The Aircraft Registration Act Chapter 503 of the Laws of Malta which will serve as the framework for registration of aircrafts in Malta.

In recent years Malta has actively positioned itself as a favourable aviation base in the EU.  It has attracted several international carriers to operate from Malta and more importantly, the successful establishment of aircraft maintenance facilities such as those of SR Technics and Lufthansa Technik.

The Aircraft Registration Act addresses several important issues such as different types of registrants, the concept of fractional ownership and the protection of creditors and special privileges which may exist on the aircraft.  Aircraft registration is administered by the Authority for Transport in Malta.

Malta Aircraft Registration Process – Key Information

An aircraft may be registered by the owner, operator, or its buyer, under a conditional sale. Only qualified persons and entities are entitled to register an aircraft in Malta.

Qualified persons are citizens of the European Union, EEA or Switzerland and qualified entities are entities that should be beneficially owned at least to the extent of 50% by individuals who are citizens of the European Union, EEA, or Switzerland. Qualification for registration is more flexible when it comes to the registration of private jets. 

An aircraft which is not used for ‘air services’ may be registered by any undertaking established in an OECD Member State. Registration caters for issues of confidentiality in the sense that it is possible for the aircraft to be registered by a trustee. Foreign undertakings registering an aircraft in Malta are obliged to appoint a Maltese resident agent.

Malta Aircraft registration allows the possibility for separate registration of the aircraft and its engines. An aircraft which is still under construction may also be registered in Malta. The notion of fractional ownership is fully recognised by Maltese law allowing the ownership of an aircraft to be split into one or more shares. Details recorded on the public register include the physical details of the aircraft, physical details of its engines, name and address of the registrant(s), details of any registered mortgage(s) and details on any irrevocable de-registration and export request authorisation.

Registering a Mortgage on an Aircraft

Maltese law allows the aircraft to act as a security for a debt or other obligation.

A mortgage on an aircraft may be registered and as such all registered mortgages including any special privileges are not affected by the bankruptcy or insolvency of its owner.  Furthermore, the law protects the judicial sale of the aircraft (instituted by the registered mortgage) from being interrupted by the administrator overseeing the bankruptcy proceedings of the owner. A mortgage may be transferred or amended according to the relevant preferences and circumstances of the creditor. Special privileges are granted in respect of certain judicial costs, fees owed to the Malta Transport Authority, wages payable to the aircraft’s crew, debts owed in relation to the repair and preservation of the aircraft and, if applicable, to wages and expenses in relation to salvage. Interpretation of the provision of the governing legislation has been consolidated and facilitated by Malta’s ratification of the Cape Town Convention.

Taxation of Aviation Activities in Malta

The regime is supported by attractive fiscal incentives:

  • Income derived by a person from ownership, operation of leasing of aircraft is not taxable in Malta unless this is remitted to Malta.
  • 0% withholding tax on outbound lease and interest payments made to non-resident persons.
  • Beneficial depreciation period for wear and tear.
  • The Fringe Benefits (Amendment) Rules 2010 – in some cases, entities may be exempt from fringe benefit taxation (for example, the private use of an aircraft by an individual who is not resident in Malta and who is an employee of an entity whose business activities include ownership, leasing or operation of aircraft or aircraft engines, used for international transport of passengers/goods, shall not be considered as a fringe benefit, and is therefore, not taxable as a fringe benefit).

The Malta Highly Qualified Persons Programme and the Aviation Sector

The Highly Qualified Persons Programme is directed towards professional individuals earning over €86,938 per annum, employed in Malta on a contractual basis within the aviation sector.

This scheme is open to EU nationals for five years, and to non-EU nationals for four years.

Tax Advantages Available to Individuals – Highly Qualified Persons Programme

  • Income tax is set at a flat rate of 15% for qualifying individuals (instead of paying income tax on an ascending scale with a current maximum top rate of 35%).
  • No tax is payable on income earned over €5,000,000 relating to an employment contract for any one individual.

How can Dixcart help?

Through our team of experienced professionals, Dixcart Management Malta Limited will assist you in all aspects of registering your aircraft in Malta. Services range from incorporation of the entity owning the aircraft in Malta and full corporate and tax compliance, to the registration of the aircraft under the Maltese Registry, whilst ensuring full compliance with Maltese Aviation legislation.

 Additional Information

If you would like further information regarding Malta Aircraft Registration, please speak to Jonathan Vassallo (advice.malta@dixcart.com) at the Dixcart office in Malta or your usual Dixcart contact.