Aircraft Registration: Malta

Malta is a small island located in the center of the Mediterranean Sea. Home to around 420,000 people, the country is famous for its sun, sea, history and culture. In recent years, Malta has also developed a reputation as a vibrant, open economy within the European Union, and gained considerable ground in establishing itself as an important financial center.

The island’s pleasant climate and favorable financial regulations have been attracting increasing numbers of foreign high-net-worth individuals to take up residence there. This has led to an increase in general aviation activity, and in the number of locally registered aircraft. Here we take a look at some of the benefits for owners and operators registering their aircraft in Malta.

Malta: A Major Regional Hub

Malta boasts the largest shipping register in Europe, and has a long history as a significant maritime hub in the Mediterranean. Today, aviation is just as important for the island’s economy as the nautical sector. Private and corporate aircraft owners are touching down in Malta in ever-increasing numbers, with aviation management companies and service providers ramping up operations to cater to the demand. Due to the island nation’s relatively small size, the airport is never further than thirty minutes away.

Malta is well on its way to becoming a serious competitor in Europe’s aircraft registration and management industry. In 2010, the Maltese government launched the Aircraft Registration Act, intended to encourage development of the aviation industry. Since then, the sector has blossomed. As of June 2017, more than 250 aircraft are registered in Malta, up from just 80 at the end of 2010.

What Facilities Are Available on the Island?

In 2012, the government inaugurated the Safi Aviation Park, a €17 million project designed to pave the way for the aerospace industry to continue flourishing. This 200,000m2 facility provides the infrastructure to support the creation of an aviation cluster, and offers a number of complementary services in one convenient location. These include maintenance, repair and overhaul (MRO) of aircraft, hangarage, and spray painting. All of this is interwoven with cutting-edge research and development facilities to create a central aviation hub which is unrivaled in the region.

Aircraft Registration in Malta

Safi Aviation Park provides state-of-the-art facilities designed to help develop the aviation industry in Malta.

There are several flight schools in Malta, together with aviation industry training organizations delivering a wide variety of courses. A number of Maltese pilots today head the training departments of the world’s leading airlines, and have played a significant role in the introduction of iconic aircraft such as the Airbus 380 into the fleets of major airlines.

What Are the Benefits of the Maltese Tax System?

One aspect of Malta’s commitment to facilitate the aviation business has been to remove undue tax burdens. No import duty is chargeable when bringing civil aircraft into Malta. In addition, any income derived from the ownership, lease or operation of aircraft engaged in the international transport of passengers or goods is deemed to arise outside Malta.

VAT is applicable as per EU law in respect of importations, intra-community acquisitions, and supply of aircraft. However, managed aircraft operated on an Air Operators Certificate (AOC) are not subject to VAT, even when used by their owners. All aircraft operated on an AOC are VAT exempt, irrespective of the number of flights and whether these are operated on the owner’s behalf or for third parties.

Any business involved in the repair, overhaul or maintenance of aircraft may benefit from investment tax credits, which can be offset against the tax due on its chargeable income. Malta also has an extensive double taxation treaty network aimed at minimizing tax liability on international transactions, which covers more than one hundred countries. Click here to view a full list of participating nations.

Why Register an Aircraft in Malta?

Thanks to the efforts of the government, Malta is considered a highly favorable territory in which to register an aircraft. Some of the advantages include:

  • A cohesive set of national laws on aircraft registration and security.
  • An all-inclusive National Aircraft Register (as opposed to a separate aircraft and mortgage register), which integrates the aircraft’s ownership and technical information along with details of third party rights over the aircraft and/or its engines.
  • Narrowing of nationality and form requirements, and extension of ownership of Maltese aircraft (under specified circumstances) to nationals of countries other than EU Member States, EEA States or Switzerland.
  • Option to have an aircraft registered not only by the respective owner, but also by operators under a temporary title.
  • Introduction of fractional ownership of an aircraft, allowing more than one person to have a vested interest in an aircraft.
  • Enhanced rights of creditors, including the possibility of registering an irrevocable power of attorney for de-registration and export of the aircraft.
  • Extensive protection and increased authority to mortgagees in relation to the cancellation of an aircraft from the register.

An aircraft may be registered in Malta by any of the following:

  • The owner of an aircraft who operates the said aircraft.
  • The owner of an aircraft which is under construction or temporarily not being operated.
  • The operator of an aircraft under a temporary title.
  • The buyer of an aircraft under a conditional sale or title reservation agreement, who is thereby authorized to operate the aircraft.

Conclusion: A Great Choice for Owners and Operators

Operators who chose to register their aircraft in Malta benefit from the available tax incentives and positive legislation, thanks to the Maltese authority’s focus on client service rather than unnecessary bureaucracy. Malta’s cosmopolitan business life and strong economic activity have also helped attract several big names in the aviation industry to the island.

Business aviation in Malta has seen steady growth in recent years, with passenger traffic at Malta International Airport increasing by 10% in 2016. Local Part-145 maintenance organizations have also contributed to the growth of business aviation on the island, through their reliable provision of line and base maintenance for a large selection of aircraft.

As a full Joint Aviation Authorities (JAA) and European Aviation Safety Agency (EASA) member state, Malta has earned a reputation for maintaining high regulatory standards in aviation. These credentials help to ensure that Malta’s flag is not just one of convenience, but one of confidence, which is respected across the globe.