Ship Registration

Ship Registration

Malta has a large shipping industry, based on its strategic location. Furthermore, as a former British colony, it has a legacy of laws and regulations that have been rooted in English maritime law and tradition. Therefore, Malta has developed a strong body of laws and a regulatory system, which have led it to be one of the most attractive flags for shipowners around the world.

Malta’s shipping register is one of the largest in the world – and Europe’s largest. Malta is a full member of the European Union. All kinds of merchant ships (tankers, floating platforms, bulk carriers, to name a few) can be registered under the Malta flag, or if used in national waters only, as commercial vessels under the Commercial Vessels Code.

Whether as a port of call or for ancillary services such as dry-docking, bunkering and transhipment operations, Malta’s location and EU membership give it strategic advantage in this industry. Its wide-spanning network of service providers means that the jurisdiction not only provides a robust framework for the registration and operation of merchant ships, but also acts as a one-stop shop for a full range of services for shipowners.

Various fiscal and corporate advantages exist: on the forefront of these is the Tonnage Tax Scheme which was revamped in recent years to remain in line with EU law, as well as the relatively straightforward process to incorporate a Malta shipping company under the Merchant Shipping Act and the absence of restrictions of nationality of owners and crew for Maltese vessels.

Provisional Registration

The first step to register a Maltese vessel is provisional registration for six months, including:

• Application form & fee
• Proof of qualification to own a Malta flagged ship
• Appointment of a resident agent for international owners
• Declaration of ownership (sworn)
• Ship Radio Station Licence (depending on equipment)
• Bill of Sale
• Cancellation of previous registry

Provisional registration may be extended for up to six months where the documentation proves difficult to obtain – allowing the prospective owner to collate all the documents necessary for permanent registration.

Permanent Registration

Upon successful submission of all remaining documents e.g., survey documents or documents proving that the vessel has all the required markings – registration is converted to permanent registration.

Yacht Registration – Private & Commercial

Yachts can be registered for either private use, or commercially for charter purpose.

Private yachts are registered with fewer formalities, being destined for personal use. Any vessel larger than 6m can be registered under the Malta flag. These yachts cannot be chartered or hired out to third parties.

The Commercial Yacht Code applies to vessels over 15m that are to be used for chartering purposes and places certain technical requirements on the vessel. Commercial registration entails fiscal advantages in terms of the ability to set off VAT incurred in expenses, as against the VAT applicable on charters – assisting cash flow.

For smaller yachts wishing to operate commercially, the Small Commercial Yacht Code applies to yachts of length that is between 12 metres and 24 metres. These yachts do not carry more than 12 passengers.

The Passenger Yacht Code applies to yachts that meet the following criteria:

• operate commercially;
• intend to carry more than 12 and less than 36 passengers;
• carry not more than 200 persons;
• do not carry cargo;
• engaged on international voyages.

Such yachts are required to meet the applicable safety conventions’ requirements, with a number of dedicated equivalencies which take into account the size of the vessel and its operations (when compared to merchant ships, to which these international conventions apply in full).

Mortgages

Ships registered under the Maltese flag are also capable of being subject to a mortgage, which is a registrable charge on the vessel denoting the claim of a creditor.

Mortgages rank according to the order in which they are filed, so that the time of filing is also noted.

Bareboat Charter Registration

The Maltese flag permits the bareboat charter registration of foreign vessels under the Malta flag, or the foreign bareboat charter registration of Maltese vessels – the main requirement is the compatibility of the two legal systems.

Bareboat chartered ships under the Maltese flag enjoy all the rights and privileges as ships registered in Malta and have the same obligations.

Ships Under Construction

Ships that are still being built or equipped are capable of being registered under the Malta flag; this ensures the protection of the rights of both the builder and the prospective owner in the transaction.

International Conventions

Malta has adopted all the major maritime conventions including SOLAS, MARPOL, the Tonnage Convention and COLREGs.

Malta-registered vessels must always carry valid statutory certificates; these are issued on behalf of the Maltese government by Recognised Organisations – specialised organisations that may be engaged to provide services of issuing survey, tonnage and convention certificates in compliance with international requirements.

Malta Shipping Companies

While it is not strictly necessary for a ship to be owned by a Malta company, companies formed under Malta’ Merchant Shipping Act with the object of owning and operating sea vessels offer corporate and fiscal advantages to the discerning shipowner.

Such companies have a simple set-up, tailored to the particular characteristics of maritime enterprise, including the appointment of a Special Attorney who is authorised to carry out certain functions in respect of the ship’s registration and certification (see below).
Furthermore, they may obtain recognition as a ‘shipping organisation’ in terms of the Malta Merchant Shipping Act and thus benefit from Malta’s Tonnage Tax scheme (see below), which is of significant advantage to healthy shipping operations.

The application of the VAT treatment to certain expenses in connection with the ownership and operation of ships, including certain repairs and maintenance is of great advantage to the operation’s cash flow.