Structured for Success

 What are the options when registering your Ownership Title under the Malta Flag? Matthew Attard talks us through the alternative structures available.

For owners wishing to register title of their yacht under the Malta flag and effectively operate the vessel under our system, the option to use an alternative structure to a Maltese Company (although available) is often overlooked. The Maltese corporate setup for yacht ownership is one that I believe should be recommended in most instances, especially for the larger yachts and/or for those yachts that will be commercially chartered. For one thing, when one chooses to fly the Malta flag (which should not be regarded as a flag of convenience), it is recommendable to opt for more links with the jurisdiction and the Maltese company gives you this.

In addition, we find that when owners seek finance from creditors, many financial institutions prefer to deal with a Maltese company owner because apart from securing their credit via a Maltese Mortgage, they can also pledge the shares in the Maltese company. This also facilitates any action by the creditor in case of enforcement as everything is centralised in one jurisdiction which applies non conflicting rules and procedures. 

Maltese company law is heavily based on English company law, and this factor helps foreign lawyers both better understand and feel more confident about the Maltese system, as well as how they can adapt if for their needs. There may also be tax advantages afforded to commercial yachts, which a non-Maltese Company would be ineligible for. Owners are also afforded options to account for social security payments of crew in Malta as well as consolidate employment agreements under Maltese law.

Appointing a Maltese Director or a company secretary is not compulsory under our system. Having said this, one needs to make assessments on a case-by-case basis to determine the most viable options available; there is value in choosing to appoint Maltese officers or officers based in Malta who can keep the company books, pass the necessary resolutions and issue the necessary powers of attorney in accordance with good corporate governance. Increasing presence in the jurisdiction you have chosen is slowly but surely being regarded as a wise practice to pursue.

The above is of course a very rough overview of the topic. As always, it is recommended that one seeks proper legal advice from a competent professional so that the above considerations (and others) are made early on and for the client to be guided accordingly. This will ensure that you will be placed in a position to extract all the advantages the jurisdiction has to offer as well as mitigate potential issues in the future.