Malta - The Aircraft Register of Choice within Europe

Spurred by the prosperity and solid reputation of Valletta's maritime register over the past 20 years and the increasing number of US-based owners looking towards Europe for their aircraft registration requirements, the Maltese Government has developed a comprehensive legal and regulatory framework for the registration of commercial and private aircraft, making Malta the EU jurisdiction of choice for the registration of aircraft.

The Aircraft Registration Act, 2010 came into force on 1st October 2010 and its main aim is to regulate the registration of aircraft, the registration and enforcement of aircraft mortgages and the implementation of the Cape Town Convention and the Aircraft Protocol and its interface with Maltese law.

The Aircraft Registration Act, 2010 has introduced novel concepts such as the recognition of fractional ownership of aircraft in the sense that aircraft shares and interests may be specified on registration and recorded in the National Aircraft Register accordingly. Registration can take place either by the owner itself or by the operator of the aircraft such as the lessee or by a buyer under a conditional sale or title reservation agreement authorised to operate the aircraft, or by a trustee for the benefit of beneficiaries. Moreover unlike many other jurisdictions, it is now possible to register aircraft under construction as soon as the aircraft is “uniquely identifiable” and the requirements relating airworthiness surveys are suspended until the completion of the aircraft.

Through the ratification and transposition of the Cape Town Convention on International Interests in Mobile Equipment, owners and operators of aircraft have access to the international registry for the registration of mortgages and other security interests over Malta-registered aircraft and their engines.

The Aircraft Registration Act, 2010 also grants the possibility to register irrevocable powers of attorney relating to aircraft when granted as security.

The main attractions of Malta’s legal and regulatory regime relating to aircraft can be summed up as follows:

• Transparency of all rights and interests in aircraft;
• Broad registration possibilities for all aircraft, whether used for private or commercial air transport;
• Facilitation of enforcement of mortgages and other security interests;
• No withholding tax on lease payments where the lessor is not a tax resident of Malta;
• Competitive minimum depreciation periods for aircraft;
• Applicability of the Cape Town Convention provides financiers with a higher degree of protection and more effective enforcement remedies whilst allowing lower borrowing costs;
• Availability of a wide range of airline services (aircraft and engine maintenance, repair and overhaul, aircraft management, aircraft maintenance training and other ancillary support services);
• Tax refunds to shareholders on distribution of profits;
• Extensive network of double taxation treaties; and
• No taxable fringe benefits arising from the private use of the aircraft by non-resident individuals who are shareholders, employees or officers of companies involved in the international transport of goods or passengers.

Malta’s position within the EU and the Euro zone, the registration possibilities offered to owners and operators of aircraft and the notable tax incentives offered to persons being tax resident and domiciled outside Malta, are all factors that are expected to make Malta’s National Aircraft Register extremely attractive to owners and operators of aircraft.

Through our professional team at CSB Group we can provide our assistance with a number of services in connection with the aviation industry including the incorporation of the appropriate corporate structures, registration of aircraft and aircraft mortgages, co-ordination of aircraft financing transactions, tax structuring and administration and acting as the resident agent in Malta on behalf of aircraft owners and operators.

Find out more about Aviation Tax in Malta.

For Aircraft Registration Services, including Malta Company Formation; kindly forward your query to consultancy@csbgroup.com