Malta Shipping Company
Over the years Malta has established itself as one of the most renowned maritime hubs for both the leisure and commercial shipping sector. As a matter of fact, Malta has the largest maritime registry in Europe and the sixth largest in the world.
Malta is an attractive jurisdiction for ship registration due to the absence of restrictions on the sale or mortgaging of Maltese registered vessels. Moreover, there are no restrictions on the nationality of the master, officers and crew of Maltese vessels, and the possibility to register vessels under construction. Moreover, Malta is a neutral state having both economic and political stability, as well as a professional English-speaking working force and it is considered as a cost-effective jurisdiction for both ship registration and company formation.
Advantages of Registering a Ship under a Maltese Flag
- The procedure for the registration of ships in Malta is well-defined and straightforward.
- Owners, charterers and financiers of Maltese ships may benefit from highly favourable tax rates. These are on profits derived from the ownership, sale, operation and charter of Maltese ships.
- There is a complete exemption in Malta from stamp duties payable on the sale or transfer of a ship. This is also true for allotment of any share or stock of a company owning such a ship. Exchange control, capital gains tax or VAT are all exempt.
- There are no restrictions on the sale or transfer of shares of a company owning Maltese ships.
- There are no restrictions on the sale and mortgaging of Maltese ships
- There are no restrictions on the nationality of the Master, officers and crew of vessels registered under the Malta flag.
- Maltese ships benefit from preferential treatment in specific ports.
- It is possible to register vessels which are still under construction. It is also as well as other marine structures that are not ships such as oilrigs, floating docks, pontoons and barges.
Taxation of Shipping Companies under MSA
Shipping companies are subject to corporate tax at the normal domestic rate. However, if a ship is owned by a shipping company that is registered in Malta, or by an organisation recognised by the Maltese Authority, then it is entitled to certain benefits.
- The vessel that such, referred to as a ‘tonnage tax’ ship has all of its income exempt from income tax. However, the shipping company will have to pay an annual tonnage tax as well as a registration fee.
- Registered vessels must be over 1,000 net tons to benefit from these tax advantages. However, the Maltese Authorities give concessions on a case by case basis.
- No further tax shall are payable on any gain arising on liquidation, redemption, cancellation, or any other disposal of shares. This also includes including goodwill, held in any licensed shipping organisation.
- Also, no tax shall be payable by any person on interest or other income payable to him concerning any financing of the operations provided for under the MSA with regards to the objectives a shipping corporation may pursue, or for financing any ship of not less than 100 net tonnage. Maltese Shipping Company dividends distributed to the corporate shareholders are also exempt from tax if such dividends come out of gains or profits derived from the ownership or operation of a tonnage tax ship.
- Any non-resident officers or employees of licensed shipping Company in Malta, and the organisation in their respect, shall be entitled to be exempt from the provisions of the Social Security Act.
There shall also be no duty chargeable per the Duty on Documents and Transfers Act in respect of:
- The registration of a tonnage tax ship.
- The issue or allotment of any security or interest of a licensed shipping organisation
- The registration of any mortgage or other charge over or concerning any ship or licensed shipping organisation.
- Any transfer or discharge thereof, and receipt relative thereof and any assignments granted in connection therewith; or
- The assignment of any rights and interests.
Registering a Ship in Malta
All types of vessels, from pleasure yachts to oil rigs, may be registered in the name of legally constituted corporate bodies or entities. This is irrespective of nationality, or by European Union citizens; a Maltese ship may also be bareboat charter registered under another flag.
There are neither trading restrictions nor age restrictions. However:
- Ships of 15 years and over, but under 20 years, must pass an inspection by an authorised flag state inspector before or within a month of provisional registration; and
- Ships of 20 years and over but less than 25 years, must pass an inspection by an authorised flag state inspector before being provisionally registered. As a rule trading ships of 25 years and over are not registered.
The procedure for the registration of a vessel is relatively straightforward. Provisional registration, which in terms of the law has the same effect as the so-called permanent registration, can be effected very quickly. Authority to help a ship, however, will only be given once the Administration is satisfied that the vessel conforms to all the standards required by the applicable international conventions.
Provisional registration has a validity of six months. A Further six months extension may be requested. In this time, you should complete all the documentation for permanent registration. This includes, in particular, evidence of ownership and cancellation of the former registry. Authority to operate remains linked to conformity with the relative manning, safety and pollution prevention international standards.
Requirements for registering a ship or a yacht in Malta
- The owner or an authorised representative applies for registration. If required, a request for a change of name is submitted;
- A copy of the ship’s International Tonnage Certificate, where applicable;
- Proof of qualification to own a Maltese ship; in the case of a body corporate, the memorandum and articles of association.
- A declaration of ownership made before the Registrar by the owner or an authorised representative;
- Evidence of seaworthiness; in the case of trading vessels, confirmation of class;
- Payment of initial and annual registration fees.
Documents to be submitted during provisional registration:
- Builder’s certificate, if the vessel is not registered elsewhere; Otherwise a bill of sale or any other document for the registry.
- A cancellation of registry certificate from the last country of registry, showing vessel to be free from encumbrances or otherwise;
- A Certificate of Survey and a copy of the International Tonnage Certificate. This will certify compliance with Maltese Regulations.
- Evidence of the marking of the vessel per the law;
- At least one crew list.
Malta has acceded to IMO Convention STCW 1978. Maltese ships are subject to the provisions of the Merchant Shipping Act and ancillary regulations concerning the competency of officers and seamen.
There are no restrictions imposed on the nationality of the master, officers and crew engaged on Maltese Ships. However, to promote the employment of the Maltese seafarers, there is a small reduction in fees for each Maltese seafarer employed.
A Valid Minimum Safe Manning Certificate must be on board of all Maltese merchant ships. This holds for Vessels of 500 gross tonnage and over. On the entry of a vessel in the Malta register, the Merchant Shipping Directorate will issue a Minimum Safe Manning Certificate valid for five years from the date of provisional registration. After that, the Directorate will reissue a new certificate valid for five years. This happens before the expiry of the certificate. It also occurs on an equipment change, construction or trading of the ship. This will coincide with the date of the renewal of the certificate of registry.
The minimum safe manning guidelines shown below incorporate those contained in IMO Resolution A481 (XII). Authorities consider specific requirements although a practical demonstration of the ability of the crew may be required.
Authorities issue Certificates of competency on examination. Foreign certificates issued in terms of the 1978 STCW Convention are recognised where they have granted by analysis.
The master and seamen sign a contract of employment in the form of a crew agreement.
A crew agreement must contain the following details:
- Personal details of each member of the crew.
- The time at which each seafarer is to be onboard or to begin work.
- Capacity in which each seafarer is to serve.
- Wages for each seafarer.
- Agreed on leave.
- Disciplinary provisions.
- A list of persons under the age of 18 years and their birth dates.
In Maltese ports, the terms of the agreement (including records of engagement and discharge of seafarers) preferably are to be endorsed by a Maltese shipping officer and, in foreign ports, by a Maltese Consular Officer. An agreement can be made for a single voyage or, if the voyage is less than one year, it may be extended over two or more voyages.
The content on this website is for information purposes only and should not be taken as tax, legal or any other professional advice.
Contact our CBDO on LinkedIn Deborah Vella or email us on [email protected] for more information as well as for a quote. We will happily guide you through the ship registration, and company formation process and also advise you on the solutions that would best suite your needs!