All types of vessels from pleasure yachts to oil rigs may be registered in the name of legally constituted corporate bodies or entities, irrespective of nationality, or by European Union citizens. A Maltese ship may also be bareboat charter registered under another flag.
Maltese vessels registered in terms of the Malta Shipping legislation are entitled to fly the Maltese Flag and entitled to enjoy the advantages presented under the law, including international recognition and protection. The ‘Malta Flag’ formally came into existence in 1973, upon the promulgation of the pertinent legislation. Maltese shipping legislation caters for important measures for control and added safeguards for the financiers, thus making financing more attractive, and a bareboat charter registration. The Maltese merchant fleet is today the largest in Europe. Moreover, Malta is a party to most of the major International Maritime Organisation (IMO) and International Labour Organisation (ILO) International Maritime Conventions and Malta flagships are obliged to strictly adhere to the provisions of these international conventions.
In order for an organisation to qualify as a shipping organisation has to obtain and maintain a licence from the Registrar-General of Shipping and Seament to enable it to carry out those activities. Moreover, its principal objects must be one or more of a list of specific activities as outlined below:
- the ownership, operation (under charter or otherwise), administration and management of a ship or ships registered as a Malta ship and the carrying on of all ancillary financial, security and commercial activities in connection therewith;
- the ownership, operation (under charter or otherwise), administration and management of a ship or ships registered under the flag of another state and the carrying on of all ancillary financial, security and commercial activities in connection therewith;
- the holding of shares or other equity interests in entities, whether Maltese or otherwise, established for any of the purposes stated in this section and the carrying on of all ancillary financial, security and commercial activities in connection therewith;
- the raising of capital through loans, the issue of guarantees or the issue of securities by the company when the purpose of such activity is to achieve the objects stated in this section for the shipping organisation itself or for other shipping organisations within the same group;
- for the carrying on of such other activities within the maritime sector which the Minister may, on the advice of the Authority, from time to time prescribe by regulations as qualifying for the above purpose.
Malta shipping legislation does not impose any trading or age restrictions. Nevertheless, the following conditions are provided for:
- ships of 15 years and over, but under 20 years, must pass an inspection by an authorized 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 authorized flag state inspector prior to being provisionally registered.
- 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 in a very swift manner. A vessel is primarily 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 ought to be finalized for permanent registration. This includes, in particular evidence of ownership of former registry. Authority to operate still remains linked to conformity with the relative manning, safety and pollution prevention international standards.
Requirements for provisional registration:
- An application for registration by the owner or an authorized representative accompanied if required by an application for a change of name;
- A copy of the ship’s International Tonnage Certificate, where applicable;
- Proof of qualification to own a Malta ship; in the case of body corporate, the memorandum of association;
- A declaration of ownership made before the Registrar by the owner or by an authorized representative;
- Evidence of seaworthiness;
- Payment of initial and annual registration fees.
Benefits of Malta Ship Registration
What makes Malta a Flag of Choice?
The following benefits are associated with the Malta flag:
- ships may be registered in the name of legally constituted corporate bodies or entities irrespective of nationality, or by European Union citizens;
- low ship registration and tonnage tax costs. Younger ships enjoy progressively lower registration and tonnage tax costs;
- attractive incentives to owners, registered charterers and financiers of Maltese ships of over 1,000 net tonnage; these incentives may also be extended to smaller ships;
- no limitations 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 limitations on the sale and mortgaging of Malta ships;
- no trading limitations and advantageous treatment to Malta ships in certain ports;
- Malta has the required infrastructure to provide the whole range of maritime services, as an international maritime centre.
What makes Malta flag of Confidence?
The following characteristics enhance Malta’s reputation as a flag of confidence:
- serious and proficient maritime administration;
- adherence to international standards through the flag state inspectorate;
- twenty four hours, seven days a week service in respect of urgent matters;
- sound multilateral and bilateral relations;
- active participation in international shipping fora.
Ships under Construction
Malta shipping law provides for the registration of vessels that are being built or equipped.
The requirements relating, inter alia, to survey and safety of ships already built and, to the declaration of ownership where the builders have not yet effected delivery to owners will be suspended until construction is completed or until delivery has been made.
Vessels to be classed as trading ships are to be built under the supervision of a recognized organisation.
Bareboat Charter Registration
Malta bareboat charter registration allows ship owners the option to capitalise on the use of their vessels by providing more operational flexibility. Two scenarios of this type of Malta vessel registration are allowed by Maltese law: the bareboat charter registration of foreign ships under the Malta flag and the bareboat charter registration of Malta ships under a foreign flag.
The main principles adopted at law are, the compatibility of the two registries and, that matters regarding title over the ship, mortgages and encumbrances are governed by the underlying registry. The operation of the vessel falls under the jurisdiction of the bareboat charter registry. The particular foreign ship registries which have been declared to be compatible to date by the Minister responsible for shipping according to law for purposes of bareboat charter registration are exhaustively indicated in List of Compatible Ship Registries.
Within these parameters vessels which are bareboat charter registered in Malta, enjoy the same rights and privileges, and have the same obligations, as any other ship registered in Malta.
A bareboat charter registration shall be for the duration of the bareboat charter or until the expiry date of the underlying registration, whichever is the shorter, but in no case for a period exceeding two years. Registration may also be extended.
The requirements and registration procedure for bareboat charter registration in Malta are similar to a normal registration, with a number of exceptions as follows:
- ship is bareboat chartered to a body corporate, entity or such other person qualified to own a Malta ship;
- ship is not a Malta ship, and is registered in a compatible registry;
- ship is not registered in another bareboat registry;
- registration fees and annual tonnage tax for bareboat charter registration are the same as those applicable for normal registration.
Bareboat Charter Registration of foreign ships under the Malta flag
The maximum period for such registration is two years, which period may be further extended for additional periods of two years each should the parties involved agree to do so. The registration procedure does not differ much from normal registration of a vessel and the documents to be filed comprise a declaration of bareboat charter accompanied by the charter agreement together with consent letters from the underlying registry, owners and mortgagees.
Vessel is registered as bareboat charter need to conform to the same obligations and also benefit from the same rights and privileges accorded to vessels registered under the Malta flag.
Bareboat Charter Registration of Malta ships under a foreign flag
The first step to carry out this type of registration involves the issue of consent by the Maltese maritime authority to that effect. Such consent will only be issued upon filing and review of the pertinent documentation such as consent by registered owners and mortgagees, and evidence of compatibility of foreign registry where applicable.
Private Pleasure Yacht Registration
Any yacht may be registered under the Malta flag. The Malta flag offers the possibility to register a yacht for pleasure or commercial use. A pleasure yacht, as understood by the Maltese Merchant Shipping Directorate, is one of 6m in length or more, which does not carry passengers for reward and is not engaged in trade.
A commercial yacht is considered to be one of not less than 15m in length with a gross tonnage not exceeding 3000 gross tons. Yachts registered under the Commercial Yacht Register are such that do not carry cargo, carry not more than 12 passengers on board and are owned and/or operated by an individual or corporate entity for the commercial use thereof.
In terms of Malta shipping legislation, the registration of pleasure yachts is normally done in two stages namely, the Provisional Registration followed by the Permanent Registration. For Provisional Malta Registration of a yacht, certain basic documentation must necessarily be presented to the Merchant Shipping Directorate following which a provisional certificate of registration would be issued.
Malta Provisional Registration lasts for six months during which time other documents would need to be presented for Permanent Registration. The six month period of Provisional Registration can be extended where needed.
Super Yacht Registration – Commercial Yachts
The Malta Commercial Yacht Code was launched in 2006 and was developed mostly based on industry established standards, but unlike other Codes, the Malta Code brings together in one document the requirements for both yachts below 24 metres and yachts above 24 metres. The Code has been proving successful and has gained acceptance and recognition within the industry.
Maltese law is very advantageous for the operation of commercial yachts. The Commercial Yacht Code gives the opportunity to yacht owners to have their yachts registered under the Malta flag as a commercial vessel which therefore enables them to pay an annual tonnage tax on the tonnage of their yacht instead of income tax on earnings with savings made on building and operational costs.
Yachts Eligible for Registration as a Commercial Yacht
- Yachts in commercial use of over 15 meters in length and which do not carry cargo and do not carry more than 12 passengers;
- All types of yachts can be registered as a commercial yacht under the Malta flag, including historical and training yachts;
- Yachts over 24 meters in length are to be built to the requirements and standards of a classification society authorised to issue statutory certificates on behalf of the Government of Malta. Malta recognises all leading classification societies. Yachts below 24 meters in length do not require to be classed.
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 Surveyors 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.
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 would need to be prescribed whilst in the case of non-Maltese owners, the appointment of a resident agent is necessary;
- declaration of ownership made in front of the Registrar by the owner or an authorized representative;
- where applicable, a copy of the current yacht’s International Tonnage Certificate;
- where applicable, an 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.
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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.