Aviation Law in Malta
The primary source of Maltese Law relating to the registration of aircraft is the Malta Aircraft Registration Act of 2010 which implements the provisions of the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol which ensures that irrespective of the nature of an aircraft being that it does not have a fixed location, the enforceable rights of third parties are enforceable and the international interests of such persons protected.
Main benefits of registering aircraft in Malta
The range of advantages of having a Malta-registered aircraft is not in any way short. The inception of the Malta Aircraft Registration Act in 2010 resulted in Malta having one of the most reputable aircraft registers and served to boost the country’s aviation sector. Notably, the Act provides for:
The possibility of registering aircraft under construction once the craft is uniquely identifiable;
The possibility of recording various details pertaining to the aircraft, its ownership or any other relevant interests;
The possibility of registering an “international interest” pursuant to which security interests are created, and their priority ranked;
Broad registration possibilities for aircraft not used in commercial air transport.
The aforementioned, within a well-regulated and high-quality eco-system, complemented by competitive aviation registration and renewal costs, with the backing of an attractive corporate tax system and numerous fiscal benefits, mark the 9H register as one-of-a-kind.
The use of trusts and fractional ownership
The Aircraft Registration Act introduced the possibility of registering fractional ownership in aircraft, affording co-owners to each register their proprietary interest in the aircraft as well, as co-financing and multiple security interests registrable as each fraction, may be financed by different creditors.
Moreover, the Act recognises trusts as owners, recognising the interests of beneficiaries albeit the trustee is the eligible and registrant and the beneficiaries are not named on the public register, guaranteeing the continued confidentiality of the instrument of trust.
Who is qualified to register an aircraft in Malta?
One would qualify as a registrant of an aircraft depending wholly on the nature of the use of the aircraft, that is, whether for private or commercial purposes.
Qualifying registrants of aircraft destined for use in commercial air services are the Government of Malta; citizens of Malta or the European Union or the EEA or Switzerland provided they are resident or have a place of business in such country and entities formed and existing in accordance with the laws of Malta or the European Union or the EEA or Switzerland with a principal place of business and central administration in such country provided that at least 50% of such entity is owned beneficially by the Government of Malta or a citizen of Malta, the EU, the EEA or Switzerland.
The operation of a craft in commercial air services necessitates an Air Operator Certificate and an Air Operating Licence, both issued by the Civil Aviation Directorate.
As for the registration of private crafts, any natural person who is a citizen of a member country of the OECD, or is an entity established in such country, or is otherwise a citizen of or established in a country which is approved in terms of the Aircraft Registration (Approved Jurisdictions) Regulations of 2011, may register the aircraft on the Maltese register, provided it has the legal capacity to own/operate an aircraft in terms of Maltese law and is compliant with applicable regulations and guidelines.
Importantly, where the member country of which the applicant is a citizen or in which the entity is registered is not Malta, there would need to be appointed a local resident agent to represent the owner in Malta for matters concerning the registration of the aircraft.
Who is eligible to register an aircraft?
Qualifying registrants may register aircraft in Malta in one of a number of capacities, namely as an owner operating an aircraft; an owner of an aircraft under construction (or which is temporarily not being operated or managed); an operator of an aircraft under a temporary title; a purchaser of an aircraft under a conditional sale or title reservation agreement who is authorised to operate the aircraft; or a trustee for the benefit of beneficiaries.
Tax Benefits for Private Aircrafts in Malta
The private use of an aircraft by an individual who is not resident in Malta and is an employee or an officer of an entity whose business activities include the ownership leasing or other operation of aircraft used for international transport does not constitute a taxable fringe benefit.
Moreover, from a VAT perspective, private aircraft leasing guidelines serve to reduce the percentage of VAT payable on lease charges, whereby the VAT rate is calculated based on time spent in European Union airspace and the craft’s range in KM.
The local availability of a broad range of airline-related services further bolsters the Aviation Industry in Malta, including not only aircraft registration but also leasing, the availability of legal professionals, insurance, and financing, and aircraft and engine maintenance, repair and overhaul, aircraft management, aircraft maintenance training and other ancillary support services, all within an environment that boasts high standards of safety and security.
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