What are the options for registering an Ownership Title under the Maltese Flag? We explore the protocols…
It’s a common misconception that in order to register a yacht under the Malta flag, one would need to set up a Maltese shipping company, in the absence of being a Maltese national or resident. Although a yacht owner often chooses a Maltese corporate set-up for yacht ownership purposes, our legal regime also allows European Union (EU), European Economic Area (EEA), British (UK) and/or Swiss (CH) nationals not residing in Malta; and foreign (non-Maltese) corporate bodies, to register a vessel under the Malta Flag whenever it is determined that a Maltese structure can be done away with.
These individuals and foreign corporate authorities are referred to as international owners. When an international owner opts to register a vessel in Malta, they must firstly appoint a local resident agent, whose function and role is to act as the representative of such foreign owner in Malta. In addition, the resident agent is there to provide an easily ascertainable local link and point of contact for Malta’s registry and other relevant local authorities.
The resident agent will need to collect a number of documents prior to onboarding an international owner as a client. In respect to foreign companies, this includes collecting copies of the articles of association, the certificate of incorporation and a recent good standing certificate. As international owner individuals, the resident agent will be tasked with collecting a copy of the individual’s passport or identity card. The resident agent will also need to collect all relevant due diligence documents in order to create a proper profile on such company or individual and enable it to assess the international owner’s reputability.
In addition to the above, in respect to foreign companies, it will need to be provided with a simple legal opinion issued by a legal practitioner in the country wherein the foreign company is registered. The purpose behind such legal opinion is to confirm critical facts about the company, namely that it is properly incorporated, that its objects allow it to own vessels and that it is still in good corporate standing, amongst other things. A declaration of appointment of the resident agent, and a service agreement, are the other two documents to be provided.
Individuals will similarly need to provide a declaration of appointment of the resident agent, and enter into a service agreement with the same resident agent. Once all the documents are satisfactorily provided and the clients are onboarded, the resident agent is responsible for submitting these documents with the Malta registry, and once officially recognised as the international owner’s resident agent, such owner will be considered eligible to register vessels in Malta.
As a law firm that regularly assists international clients seeking to operate Malta-flagged vessels, we noticed that clients of larger commercial yachts tend to prefer setting up a Maltese corporate structure for yacht ownership under the Malta flag; in particular due to the increasing desire to create substance in the flag state. However, it is useful for clients to understand that other options exist under the Maltese system, which can be used to their advantage and cater to their particular needs.