DR CLAYTON FENECH LOOKS AT WHY MALTA HAS BECOME A PREFERRED JURISDICTION FOR YACHT REGISTRATION AND OWNERSHIP STRUCTURES FOR SUPERYACHTS
Since time immemorial, Malta has occupied centre stage in the maritime realm due to its strategic position in the middle of the Mediterranean Sea. Whether as a vital regional trading link or a safe harbour during turbulent times, Malta and its people have always thrived on maritime industries. Over the years however, Malta has systematically developed policies to ensure that its long-term relevance to the maritime world is sustained by reasons that go beyond its geographical location.
Malta’s membership in the United Nations, and consequently the International Maritime Organisation (IMO) and the International Labour Organisation (ILO), and its accession to the European Union have undoubtedly played a pivotal role in Malta’s rise as a reputable jurisdiction of choice for yacht registration. Today, Malta is party to and has ratified all the international conventions of the IMO and has consistently featured on the white list of the Paris MOU on Port State Control since 2005.
The other facet to Malta’s successful formula in the maritime sector is domestic policy which, to a certain extent, also draws on the island’s foreign policy of the past few decades. In fact, Malta’s Merchant Shipping Act and the relative subsidiary legislation relating to shipping organisations are largely based on their UK counterparts and form part of a broader legal framework which makes Malta a highly attractive proposition for yacht ownership structuring.
Yacht financiers also tend to look favourably towards yachts registered in Malta and owned by Maltese companies due to the robust and effective remedies available for the enforcement of their secured rights in the event of default on the part of the borrower.
The Malta Commercial Yacht Code (MCYC), revised in 2015, sets out the required standards of safety, pollution prevention and crew welfare which a Maltese commercial yacht must adhere to, based on its type and size. The standards of the code are drawn from international conventions, EU directives and feedback from industry stakeholders which ensures a pragmatic approach without compromising on quality and safety.
Further afield, Malta’s VAT rate of 18% is among the lowest in the EU, making Malta an ideal entry-point for the importation of private yachts for free circulation within the EU.
Yachts registered under the Malta flag also tend to attract the best available talent to serve onboard, mainly due to Malta’s ratification of the Maritime Labour Convention (MLC) and the applicability of EC Regulation 883/2004 on the coordination of Social Security Systems between EU member states. The MLC ensures the protection of seafarers based on predetermined minimum standards whilst Regulation 883/2004 provides clarity in relation to social security protection of seafarers within the EU.
Malta’s hard-earned reputation as a natural choice for yacht registration and ownership is backed by practical, often overlooked advantages, including its specialised multilingual workforce, sustainable costs and an overall can do attitude.