The guidelines relate to a leasing arrangement with respect to a yacht, entered into between a Malta company and a lessee, which may be either a company or an individual, whether resident in Malta or not.

A Malta company would be set up and this would become the new owner of the yacht. The Malta company would also be registered with a valid VAT number here in Malta. This same company would later become a lessor under the subsequent lease agreement. Given the lessor company uses the yacht for its economic activity - the leasing, it has a right to deduct any input VAT incurred on the purchase of the yacht. The monthly lease charges by the lessor to the lessee are subject to VAT at the standard Malta VAT rate of 18%.

Given that it is deemed that the yacht will be used partly in EU territorial waters and partly outside EU territorial waters, VAT would be chargeable only on the portion that the yacht is deemed, during the period of the lease, to be used in EU territorial waters.

Manning Requirements

All commercial yachts over 24 meters in length are issued with a Minimum Safe Manning Certificate. The competent authority has, over the years, built considerable experience in this field and considers applications, on a case by case basis. Malta recognises training and certificates from most reputable training establishments and countries. Furthermore, there are no restrictions on the nationality of the crew.

Compliance Surveys and Certification

An initial pre-registration survey ought to be carried out in order to draw up a record of compliance with the Code. Grey areas and specific issues are discussed between the surveyor and the Administration through a transparent and recorded procedure. Upon agreeing any recommended design alternatives and establishing that the desirable standards are achieved, the Administration issues a Certificate of Compliance to trade as a Commercial Yacht enabling operational registration. Compliance surveys can be carried by one of the approved Government Surveys or by a Recognised Organisation.

Thereafter, an annual survey is to be carried out. On yachts below 24 meters in length annual surveys may be carried out by the crew, while on yachts above 24 meters in length annual surveys are to be carried by an approved Government Surveyor or a Recognised Organisation. Annual Surveys are to be endorsed on the prescribed space on the Certificate of Compliance. A renewal survey is to be carried out every 5 years (yachts below 24 metres every 4 years). On satisfactory completion of the surveys, all trading surveys are renewed.

Green Yacht Notation

Malta yachts that are operated at extra cleanliness and safety standards are assigned a Green Yacht Notation. By rewarding high safety and environmental standards, the notation makes above standard yacht operations more attractive. Yachts with such a notation reap various benefits, including, charter preference, continuous improvement, better image and motivation and pride of crew.

Registration Procedure

A yacht is first registered provisionally under the Malta flag for six months (extendible for a further period, or periods not exceeding in the aggregate six months) during which period all documentation needs to be finalised.

Requirements for Provisional Registration

The following are a list of requirements for provisional registration:

• application for registration by owner or an authorized representative;
• proof of qualification to own a Maltese ship; in the case of a body corporate, the memorandum and articles of association; in the case of non Maltese owners, appointment of a resident agent;
• declaration of ownership made in front of the Registrar by the owner or an authorized representative;
• where applicable, copy of the current yacht’s International Tonnage Certificate;
• where applicable, application for Ship Radio Station Licence;
• payment of initial registration fees and annual tonnage tax.

The following documents are to be submitted during provisional registration:

• where there was previous ownership, a bill of sale or any other document by which the yacht was transferred to the applicant of registry;
• otherwise a builder’s certificate in the name of the applicant;
• where applicable, cancellation of registry certificate issued by the administration where the yacht was last documented;
• Certificate of Survey and where applicable, a copy of the International Tonnage Certificate issued by an approved surveyor of ships;
• evidence that the yacht has been marked in accordance with law.

Advantages of Registering a Ship under a Maltese Flag

• Ships may be registered in the name of companies or entities irrespective of nationality, or by European Union citizens;
• Low ship registration and tonnage tax costs;
• progressive reduction in registration and tonnage tax costs for younger ship;
• no restrictions on the nationality of the master, officers and crew;
• no restrictions on the sale or transfer of shares of a company owning Maltese ships;
• no restrictions on the sale and mortgaging of Maltese ships;
• no trading restrictions and, preferential treatment to Maltese ships in certain ports.