On 4th April 2025, significant amendments to Malta’s Merchant Shipping Act (Cap 234 of the laws of Malta) came into force through Act I of 2025 – Merchant Shipping (Amendment) Act (Act), marking a milestone in the evolution of Malta’s maritime finance framework.

The most notable development is the introduction of a legal regime for the registration of finance charter instruments, allowing financiers and lessors to secure their interests in charter-based financing structures. Under the new articles 49B and 49C, a “finance charter” is recognised as an agreement – typically a bareboat or demise / bareboat charter – entered into primarily for financing purposes, granting the charterer possession, operation and/or control of the vessel.

The amendments also grant lessors statutory rights of repossession upon default, aligning their remedies with those of mortgages under Maltese law.

Additional reforms introduced by the Act include:

1. A legal regime is now in place for registering a finance charter interest over a vessel (i.e. where a charter or lease is structured for financing purposes); and
2. Mortgages over ships under construction are now permitted and registrable;
3. A new article 45B allows correction or amendment of registry details (e.g. mortgagor/mortgage name of address) without the need for full re-registration;
4. The maximum age for vessels eligible for registration under the Maltese flag is reduced from 25 to 20 years;
5. Streamlined administrative powers have been delegated to the Registrar – General, ensuring faster and more efficient decisions;
6. Provisions aimed at enhancing digitalisation have also been included, allowing for certain required documents or declarations to be substituted by digital copies;
7. A statutory definition of “bareboat charterer” is now included, distinguishing operational and ownership roles, with a and clearer differentiation between traditional bareboat charters and finance charters used as security instruments;
8. Strengthened crew wage protections, extending the claim period from three months to twelve months in line with the Maritime Labor Convention.

These reforms mark a decisive step in aligning Malta`s maritime framework with international financing practices.

By introducing a finance charter security regime, enhancing mortgage flexibility and streamlining registry processes, Malta reinforces its position as creditor- friendly and forward- looking maritime jurisdiction.

Contact us today on yachts@acumum.com for more information.