SHIPPING

GET IN TOUCH

Malta company incorporation timelines are subject to applicable AML/CFT due diligence and regulatory checks.

Ideal for businesses in sectors like trading, holding, investment, fintech, remote gaming, shipping, and aviation, Malta is a top choice for international entrepreneurs and investors seeking a tax-efficient corporate structure.

At Promethean Advisory Limited, we offer a full suite of services for Malta company setup, corporate maintenance, and trustee services through our sister company, Promethean Trustees Limited. Let us guide you through the process and ensure your business benefits from Malta’s advantageous tax regime and business-friendly policies.

Promethean offers the following services

Merchant Shipping

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.

 

Malta shipping legislation does not generally impose trading or age restrictions; however, vessels of ten (10) years and over may be subject to flag state inspection requirements, with stricter conditions applying to vessels aged fifteen (15) years and over.

 

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 Maritime Conventions – the International Labour Organization (“ILO”) and International Labour Organisation (“ILO”). Malta flagships are obliged to strictly adhere to the provisions of these international conventions.

To qualify as a shipping organisation, the organisation has to obtain and maintain a licence from the Registrar-General. Moreover, its principal objects must be one or more of a list of specific activities as outlined below:

Qualifying activities include the ownership, operation, administration or management of ships, the holding of equity interests in shipping entities, and the raising of finance in support of shipping operations within the same group.

  • The ownership, operation (under charter or otherwise), administration and management of a ship or ships registered as a Maltese 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 authorities, 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 ten (10) years and over, but under fifteen (15) years, must pass an inspection by an authorised flag state inspector before or within a month of provisional registration; and

  • Ships of fifteen (15) years and over are required to pass an inspection by an authorised flag state inspector prior to being provisionally registered. As a rule, trading ships of twenty-five (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 affected in a very swift manner. A vessel is primarily registered provisionally under the Malta flag for six (6) months (extendible for a further period, or periods not exceeding in the aggregate six (6) 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.

Provisional registration is valid for six (6) months and has the same legal effect as permanent registration. This period may be extended within statutory limits, provided that satisfactory progress is demonstrated towards completion of permanent registration requirements.

  • An application for registration by the owner or an authorized representative accompanied if required by an application for a change of name;

  • Proof of qualification to own a Maltese ship; in the case of corporate bodies, the memorandum of association;

  • A copy of the ship’s International Tonnage Certificate, where applicable;

  • A declaration of ownership made before the Registrar by the owner or an authorized representative;

  • Evidence of seaworthiness; in the case of trading vessels, confirmation from class;

  • Where applicable, request for the Administration to authorise the appropriate recognised classification society to issue the ship’s certification;

  • Where applicable, application for Minimum Safe Manning Certificate;

  • Application for Ship Radio Station Licence;

  • Payment of initial and annual registration fees and annual tonnage tax.

Benefits of Malta Ship Registration

  • ships may be registered in the name of legally constituted corporate bodies or entities irrespective of nationality, or by EU citizens;

  • twenty-four (24) hours, seven (7) days a week service in respect of urgent matters;

  • low company formation, ship registration and tonnage tax costs;

  • Maltese law provides for registration of yachts that are being built or equipped;

  • attractive tax incentives to yachts and superyachts owners encouraging commercial operation;

  • no restrictions on the sale or mortgaging of Maltese registered yachts and superyachts;

  • a dynamic registration with one of the largest ship registers in the world and very active in EU fora and international organisations such as the International Maritime Organization (“IMO”);

  • a sovereign state, member of the EU with political, fiscal and social stability;

  • progressive reduction in registration and tonnage tax costs for younger ships;

  • incentives may also be extended to smaller ships;

  • no restrictions on the nationality of the master, officers and crew;

  • no restrictions on the sale or

  • Serious and proficient maritime administration;

  • Adherence to international standards through the flag state inspectorate;

  • Sound multilateral and bilateral relations;

  • Active participation in international shipping fora.

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.

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 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 (2) 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:

  • yacht is bareboat chartered to a body corporate, entity or such other person qualified to own a Malta vessel;

  • yacht is not a Malta yacht, and is registered in a compatible registry;

  • yacht is not registered in another bareboat registry;

The maximum period for such registration is two (2) years, which period may be further extended for additional periods of two (2) 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 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 Maltese 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:

  • the application for registration by the charterer or an authorised representative;

  • a declaration of bareboat charter accompanied by the charter agreement;

  • a transcript or an extract of the underlying registration;

  • a copy of the yacht’s International Tonnage Certificate; and

  • the consent in writing of the underlying registry, owner and mortgagees.

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 six (6) meters 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 fifteen (15) meters in length or more, which do not carry cargo, carries not more than twelve (12) passengers and operated by the owner or body corporate owning the yacht for commercial use.

The following classes of yachts will be considered for commercial registration:

  • Yachts in commercial use of not less than fifteen (15) metres in length and not more than twenty-four (24) metres.

  • Superyachts in commercial use of more than twenty-four (24) metres in length and less than five hundred (500) gross tonnes.

  • Superyachts in commercial use of more than twenty-four (24) metres in length and five hundred (500) gross tonnes and over.

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.

Commercial yachts are regulated under the Commercial Yacht Code and Passenger Yacht Code, as amended and applied by Transport Malta from time to time.

Malta permits the commercial registration of yachts of not less than fifteen (15) metres in length, including superyachts exceeding twenty‑four (24) metres, subject to compliance with the applicable yacht codes.

Maltese law is very advantageous for the operation of commercial yachts. The Malta 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.

The following classes of yachts will be considered for commercial registration:

  • Yachts in commercial use of not less than fifteen (15) metres in length and not more than twenty-four (24) metres.

  • Superyachts in commercial use of more than twenty-four (24) metres in length and less than five hundred (500) gross tonnes.

  • Superyachts in commercial use of more than twenty-four (24) metres in length and five hundred (500) gross tonnes and over.

The Malta Tonnage Tax System

The Merchant Shipping (Taxation and Other Matters relating to Shipping Organisations) Regulations (“Regulations”) exempt from income tax in Malta any income derived from shipping activities. Eligibility is subject to EU State Aid rules, substance requirements, and formal declaration to the Registrar of Ships.

 

For the exemption from Malta income tax to apply, the vessel has to be operated through a genuine shipping organisation which has assumed risks and responsibilities related to the operation of a tonnage tax ship or to carrying out of shipping activities. The vessel must also declare a tonnage tax ship. A ‘tonnage tax ship’ is a ship of any net tonnage, which is engaged in shipping activities.

 

‘Shipping activities’ are defined in the Regulations as the international carriage of goods or passengers by sea in terms of the EU Maritime State Aid Guidelines and such other activities that have been approved or considered as eligible for tonnage tax purposes by the European Commission and activities as are integral or directly linked to the business of operating tonnage tax ships, when carried out in conjunction with activities of international carriage of good or passengers, including commercial yachts, as well as ancillary activities qualifying in terms of the Regulations.

 

The regulations include the following eligible vessels: cable laying, pipe laying, research vessels and multi-purpose, break-bulk and other types of support vessels. Specifically excluded vessels are: fishing and fish factory ships, private yachts and ships used primarily for sport or recreation; fixed offshore installations and floating storage units; non-ocean going tug boats and dredgers, ships whose main purpose is to provide goods or services normally provided on land, stationary ships employed for hotel and or catering operations (floating hotels or restaurants), ships employed mainly as gambling and/or casinos (floating or cruising casinos), non-propelled barges.

 

A shipping organisation must own, operate, administer or manage at least 60% of its total tonnage under the flag of an EU/EEA state. The Regulation allows ships registered in any EU/EEA state other than Malta to qualify for the regime if an amount equivalent to the Malta tonnage tax is paid to the Malta ship registry. Non-EEA ships will be able to benefit from the Malta tonnage tax when their commercial and strategic management takes place from an EU/EEA country.

 

Separate accounting must be kept for receipts and payments relating to shipping activities and activities relating to any other business. Tax returns and other documentation should also distinguish clearly eligible and non-eligible income; and Respective ship registration fees and tonnage tax should be paid.

  • Shipping organisations are exempt from paying tax on income derived from shipping activities under the Income Tax Act. No minimum tonnage requirement applies.

  • Qualifying shipping organisations may also file a simplified tax declaration instead of a regular income tax return.

  • The regulations also provide that the profits derived from shipping activities are exempt from tax in the hands of the shareholders following a distribution thereto.

  • The transfer of shares in a shipping organisation is subject to capital gains and stamp duty exemptions.

  • Commercial shipping activities are generally subject to extensive VAT exemptions.

  • Ship management activities (technical management and crew management activities) will continue to benefit from the exemption under the Income Tax Act.

  • The Regulations also grant an exemption from tax under the Income Tax Act on any income, profits or gains derived from the sale or other transfer of ship tonnage tax ship which had been acquired or sold whilst under the tonnage tax system or from the disposal of any rights to acquire a ship which when delivered would qualify as a tonnage tax ship.

If the conditions for the tonnage tax system are not met, or the shipping company or ship manager opts to renounce to the benefits and concessions granted by the regime, then the profits from the shipping activities would be subject to the Maltese standard corporate rate of 35%. However, upon a distribution of the said taxed shipping profits, the shipping company’s shareholders may be entitled to claim a 6/7ths refund of the Malta tax suffered by the shipping company on the profits so distributed, thereby resulting in an effective tax rate of 5% on the distributed profits.

The Malta VAT Yacht Leasing Scheme

In March 2020, Malta published its Guidelines regarding item 12 of part two of the third schedule to the value added tax act (“Guidelines”) regarding its VAT treatment options establishing the means in which leased pleasure yachts are to be treated for VAT purposes, with a particular focus on the use and enjoyment provisions on yacht leasing supplies. The Guidelines issued on the subject matter reflect EU developments and practices.


With respect to operating leases, it is possible for a lessor/owner of a yacht to lease out their yacht to a lessee for a consideration for a specified period of time (both for a short-term lease or a long-term lease). Through such a structure, VAT would be payable by the lessee on the monthly lease instalments, which VAT would be payable on a quarterly basis and depending on the actual use and enjoyment of the yacht within EU waters.


In order to benefit from the said VAT treatment option, the following conditions would need to be satisfied:

  • The lessor must be a Maltese entity and possess a valid Maltese VAT identification number to be eligible for the Yacht Leasing Scheme;

  • There must be a yacht leasing agreement in place between the lessor and lessee setting out the conditions of the lease;

  • The lessee must be a non-taxable person, i.e. not using the yacht for commercial business purposes;

  • The yacht must be placed at the disposal of the lessee in Malta;

  • The lessor must maintain documentary and/or technological data to determine the actual use and enjoyment of the pleasure boat within and outside EU territorial waters;

  • An annual declaration must be filed by the lessor with the Commissioner for Revenue within the prescribed timeframe.

The scheme works depending on the ratio of use and enjoyment of the yacht in or outside EU territorial waters. As a general rule, full VAT payment at the rate of 18% is payable when the place of supply of the service is in Malta; however, in cases where the actual effective use and enjoyment of the pleasure yacht would be outside EU waters, there is an adjustment method that would apply. The end result will be that VAT would only be charged on the actual use and enjoyment of the yacht by the lessee in EU territorial waters. To this end, no VAT shall be due on the portion of the lease where the yacht is effectively used and enjoyed outside EU territorial waters.


Therefore, Malta VAT will be applicable solely on the use of the yacht within EU territorial waters; the applicable VAT rate will be reduced, depending on the effective use and enjoyment of the yacht, possibly making it amongst the lowest VAT rates within the EU Member States.


Malta applies a VAT treatment for yachts based on the EU principle of actual effective use and enjoyment, subject to documentary and technological evidence and audit review.

 

Importantly, the VAT treatment options also provides an element of flexibility when it comes to exiting or terminating the lease. In the eventuality that at the end of the lease the lessor decides to contract the sale of the yacht in Malta, then VAT at the standard rate of 18% is charged on the value of the yacht upon subsequent sale.


In such a case should the Maltese VAT Department be satisfied that the necessary rules and regulations have been duly observed, a VAT Paid Certificate would be issued.

Yachts intended for commercial use may opt for VAT deferment on the importation as follows:

  • Obtaining a VAT deferment on the importation of the commercial yacht by a Maltese owning entity having a Maltese VAT registration; without needing to set up a bank guarantee (as previously required);

  • Obtaining a VAT deferment on the importation of the commercial yacht by an EU owning entity having a Maltese VAT registration, provided that the company duly appoints a VAT representative in Malta, without needing to set up a bank guarantee (as previously required); or

  • Obtaining a VAT deferment on the importation of the commercial yacht by a non-EU owning entity on provision by the importing entity of a bank guarantee amounting to the VAT payable on 0.75% of the value of the yacht, capped at one million euro;

To opt for the first proposed VAT deferment structure, one would need to incorporate a shipping company in Malta, which company would need to obtain a valid Malta VAT identification number. In each instance, the importation of the commercial yacht will require the yacht to physically call at Malta in order to undergo VAT and Customs procedures. Following which, the yacht would be imported into the European Union with the VAT payment deferred accordingly rather than paid upon importation. In such a case, the yacht would be able to roam freely and circulate within EU waters.

There are no restrictions on the nationality of the master, officers and crew engaged on Maltese yachts and superyachts. A commercially registered superyacht of more than twenty-four (24) metres in length will be issued with a Minimum Safe Manning Certificate following receipt and review of the application for a safe manning document. Commercial yachts of not more than twenty-four (24) metres in length are not issued with a Minimum Safe Manning Certificate, however, shall comply with the minimum manning requirements as set in the Commercial Yacht Code.

Foreign certificates issued in terms of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”), require an endorsement issued by the Maltese Administration attesting their recognition. On case by case basis other yacht certification may be accepted.

An initial survey is required to draw up records of compliance with the Commercial Yacht Code (“Code”). Alternative arrangements may be discussed between the surveyor and the Administration through a transparent and recorded procedure. Upon complying with the Code, the Administration issues a Certificate of Compliance to Trade as a Commercial Yacht enabling operational registration. Compliance surveys may be carried out by one of the appointed ship surveyors or by a recognised organisation.

All yachts below twenty-four (24) metres in length have to undergo an intermediate survey whilst yachts larger or equal to twenty-four (24) meters in length have to undergo annual surveys.

The Certificate of Compliance is renewable every five (5) years and surveys may be carried out by an Appointed Ship Surveyors or by a Recognised Organisation,

During a renewal survey a survey similar to the one carried out during initial survey must be carried out.

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 (6) months (extendible for a further period, or periods not exceeding in the aggregate six (6) months) during which period all documentation needs to be finalised.
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 and in the case of non-Maltese owners, appointment of a resident agent);

  • declaration of ownership made in front of the authorities 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:

  • a builder’s certificate, if the vessel has not been registered elsewhere; otherwise a bill of sale or any other document for registry;

  • a cancellation of registry certificate from the last country of registry, showing vessel to be free from encumbrances or otherwise;

  • in the cases of SOLAS (International Convention for the Safety of Life at Sea) ships, copy of the last updated Continuous Synopsis Record issued by the Administration where the ship was last documented;

  • Certificate of Survey and 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 legally constituted corporate bodies or entities irrespective of nationality, or by European Union citizens.

  • low company formation, ship registration and tonnage tax costs;

  • progressive reduction in registration and tonnage tax costs for younger ships;

  • these incentives may also be extended to smaller ships;

  • 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;

  • twenty four (24) hour, seven (7) days a week service in respect of urgent matters;

  • Malta is an international maritime centre providing the whole range of maritime services;

  • attractive incentives to owners, registered charterers and financiers of Maltese ships of over 1,000 net tonnage.

Premium Ancillary Services

In addition to the regulatory, structuring and maritime advisory services described above, Promethean provides a number of premium ancillary services supporting yacht owners, operators and private clients active within the yachting sector.

 

Through our established industry network, we assist individuals and family offices seeking yacht charter opportunities in Malta and across Europe. Acting on an introduction and facilitation basis, we connect clients with reputable charter brokers and operators specialising in luxury yacht charter services, ensuring access to trusted providers and professionally managed charter experiences.

 

We also assist yacht owners who wish to place their vessels into charter operations. Owners may approach us to be introduced to recognised yacht charter management companies and charter brokers operating in Malta and other key Mediterranean yachting jurisdictions. Through these introductions, owners may explore opportunities to generate charter income while ensuring their vessels are managed by experienced and reputable industry participants.

 

These services complement our core shipping and maritime advisory offering and provide clients with practical access to trusted professionals within Malta’s established yachting ecosystem.

Let Us Help You

Get in touch to find out more about ways Promethean can help with your specific needs.
CONTACT US