Overview

With the strategic location of the island just off one of the world’s busiest shipping lanes between Europe, North Africa, and the Middle East, Malta has established itself as a leading maritime center offering an array of services and facilities to the marine industry.  In addition to taking advantage of Malta’s natural facilities, such as the numerous protected harbors dotted around the island, the country has updated the quality and level of services to further develop the maritime industry.  

The government has committed itself to reinforcing marinas and berthing facilities and to supporting industries that provide direct or indirect services, such as marine supplies and even hospitality facilities, and has undertaken significant investment to upgrade and develop marine facilities and infrastructure.  These include the construction of the Malta Freeport, Malta Oil Tanking, Malta Super Yacht Services facilities, various yacht marinas, the upgrading of the Malta Dry Docks, and the development of a luxury cruise liner terminal, together with the overall regeneration of the port areas. 

The Malta shipping register remains a success.  Since its launch in the early 1970s, the register has grown to be one of the largest marine registers in Europe and is in the top ten worldwide and in the top 20 white-listed Paris MOU Registries.  As the register grew, the government invested in new infrastructure and facilities, and qualified shipping agents and professionals offered their services within the well-regulated maritime legal framework.  The incentives for using younger vessels and the seriousness with which the flag administration carries out Flag State Inspections has contributed greatly to Malta’s continuing presence on the Paris MOU White List, which subsequently attracts blue chip shipping companies.  This means that detention in ports for breach of international conventions is less likely for ships flying the Maltese flag. 

The advantages of having a Maltese flag include:

• Exemption from Maltese income tax on the income that is derived from shipping activities of Maltese vessels of 1,000 net tons and over;
• Exemption from duty on documents on the sale or transfer of a Maltese vessel of 1,000 tons and over;
• Exemption from duty on documents on the allotment or transfer of shares in Maltese companies;
• Exemption from income tax, donation, and succession duty, in respect to Maltese vessels under 1,000 net tons subject to certain conditions;
• Reasonable incorporation and registration costs;
• No trading restrictions imposed on Maltese registered vessels; and
• No restrictions on the nationality of the master, officers, and crew, who serve on Maltese vessels.

Leading Sub-Sectors

The Mediterranean maritime economy is enjoying an upward trend, with healthy prospects for the future.  The ocean-based economy encompasses marine-related industries, natural assets, and marine ecosystem services.  All the traditional sectors of the Mediterranean maritime economy have an upward trend and should continue to increase up to 2030.  These areas include alternative energy, aquaculture, marine biotechnology, and maritime transport.

Ship Registration

Transport Malta regulates the registration of a ship under the Maltese flag and accepts vessels owned by Maltese and non-Maltese nationals, including vessels under construction.  Initially, Malta registers vessels on a provisional basis valid for six months, pending the completion of the necessary formalities to attain permanent registration.  The authority releases a permanent registration certificate following the submission of documents that include a builder’s certificate, international tonnage certificate (where applicable), proof of title, and a survey report.  All registered vessels must obtain a Radio Ship Station license.  It is also possible to register vessels in Malta under bareboat charter[1], subject to certain documentary evidence, including a declaration of bareboat charter supported by the charter agreement, an extract of the underlying registration, and a copy of the ship’s certificate of international tonnage.  Fiscal tax advantages are available to qualifying shipping activities, including the ownership, operation, administration, and management of ships.

Yacht Registration

Yacht registration under the Maltese flag is available to Maltese and EU nationals, companies incorporated in Malta or in the EU, and non-EU entities.  A Maltese registered company is the ideal structure for yacht registration in Malta.  When the yacht owner is not a resident of Malta, it is necessary to appoint a resident agent.  There are no restrictions on the nationality of the master, crew, and officers.

Maltese VAT legislation contains rules that provide an opportunity for a reduction on the VAT impact when vessels are under lease arrangements.  These opportunities are only available when a Maltese-registered company owns the yacht, and the lease agreement is for a period not exceeding three years.  The benefit arises from a reduced rate of VAT payable in Malta on the acquisition of the yacht by the Maltese company and depends on the type of vessel and its deemed use in the EU.  The effective rate of Maltese VAT varies from 5.4 percent to 16.2 percent, resulting in VAT savings from 1.8 percent to 12.6 percent.  The lease agreement must provide a purchase option at the end of the lease, and the agreement requires the approval of the VAT office in Malta.

Commercial Yacht Registration

The registration of a commercial yacht in Malta produces several benefits, including tax benefits and VAT exemptions.  Registration requires the submission of a number of documents, including a detailed survey specific to this kind of registration.  In this instance, the authority issues a provisional license, which it finalizes upon the presentation of the required documents.

The exemptions offered under Maltese fiscal law include an exemption from VAT on the importation or supply of vessels used for navigation on the high seas, the transport of passengers under commercial activities, and the supply of services consisting of the hiring, leasing, chartering, modification, or maintenance of vessels.  The Maltese tax-refund system is of particular relevance to Maltese-registered companies established by non-residents for the operation of commercial yachts.

Servicing of Oil Rigs

The Maltese government has shown interest in supporting oil rig maintenance.  In 2013, the government issued a call for an international expression of interest to convert a redundant shipbuilding facility into an international maritime hub and chose the oil and gas industry for use of the site.  The government’s vision is that the servicing of oil rigs would attract not only rigs operating in the Mediterranean, but also those in the Atlantic Ocean and West Africa.  There is the potential to host training and create an oil-pollution response center, a first of its sort in the Mediterranean, catering to the whole region.  Opportunities exist for U.S. suppliers of products and services operating in these sectors.

Opportunities

Malta offers significant potential in the broad shipping sector that resides on the island, including opportunities for direct marketing of U.S. shipping-related goods and services to the shipping companies that reside here.  

Technology and Know-How to Combat Beach Erosion

Climate change and rising sea levels have keenly affected Malta.  The government is open to proposals to restore natural sandy beach and water levels to protect and preserve the sandy beaches that attract more than two million tourists to the country each year pre-pandemic. 

Resources

Transport Malta: https://www.transport.gov.mt/maritime-40

Ministry for Transport, Infrastructure and Capital Projects (MTIP): https://mtip.gov.mt/