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THE MALTA FLAG
The Malta Flag formally came into existence as an ‘open’ register in 1973 with the promulgation of the Merchant Shipping Act, Chapter 234. It has experienced significant and constant growth since inception and has now established itself amongst the largest shipping registries in the world in terms of tonnage.
The Registry is administered by the Malta Maritime Authority, which was established in 1991 following the enactment of the Malta Maritime Authority Act, Chapter 352.
The Act provides that the homeport of every vessel registered under the Maltese Flag is ‘VALLETTA’.
ADVANTAGES TO SHIPOWNERS
The following are some of the advantages and benefits which accrue to users of the Malta Flag:
- Vessels of 1000 net tons and over are automatically exempt from income tax and from duty on transfers or assignments, donations and succession duty. Exemption from income tax also applies to dividends paid to shareholders;
- Vessels under 1000 net tons (with the exception of pleasure boats) also qualify for the same exemptions, although such exemptions are only granted in accordance with current policy and after the filing of an appropriate application;
- No exchange control authorizations are required for the purpose of incorporating or operating a shipping company insofar as 80% or more of the shares are owned by non-residents. This also applies to the taking of security for loans or other facilities over Maltese-registered vessels owned by companies registered locally;
- It is possible to register vessels which do not fall within the strict definition of ships, such as oil rigs, floating docks, pontoons and barges;
- There are no restrictions on the nationality of shareholders and directors of shipping companies;
- Company incorporation costs are low and the registration fees are highly competitive;
- Procedures for the registration or deletion of vessels as well as for the registration and discharge of mortgages are user-friendly and uncomplicated;
- A number of double taxation and bilateral maritime agreements with other maritime nations are in force;
- No trading restrictions are imposed on vessels registered under the Malta Flag;
- Malta is a politically stable democracy and this guards against arbitrary changes to applicable laws and regulations.
INTERNATIONAL OWNER
Since the enactment of the Merchant Shipping Act in 1973, it was a pre-requisite for a ship to be wholly owned by Maltese entities for registration under Malta flag. However, in terms of the introduction of the Ships Eligible for Registration Regulations, an International Owner, whether an entity or an individual, is considered as qualified to own a Maltese ship or share therein, provided certain requirements are satisfied.
a. by citizens of a Member State of the European Union
- certified true copy of passport
- original Declaration of Appointment of Resident Agent, duly notarized and apostilled
b. by foreign corporate body/legal entity
- original Memorandum & Articles of Association of Incorporation
- Good Standing Certificate
- original Declaration of Appointment of Resident Agent, duly notarized and apostilled
- Legal Opinion duly notarized and apostilled, confirming that the corporate records of the corporate body/entity have been examined and giving the details of the directors and holders of office and of persons authorized to represent the corporate body/entity and to bind it with their signature and to appoint resident agent
The Legal Opinion should:
- confirm the date of incorporation of the foreign entity and that it is still in good standing as of the date of the legal opinion;
- confirm its shareholders and directors;
- confirm the officers and identify the persons who have judicial and legal representation;
- confirm that the objects include the ownership/operation of ships and their registration under any flag of choice;
- identify its officers who have the authority to appoint a Resident Agent in Malta to assist in the registration of the ships and the registration of mortgages thereon;
- be dated not more than one month prior to the registration of the ship
MALTESE SHIPPING COMPANY
Since May, 2004, the date of Malta’s accession to the EU, a number of legal notices came into effect affecting the procedures and structures possible for Maltese companies, including those intended to own Malta flagged ships.
In any case, all companies registering ships under the Malta flag are tax exempt in so far as the ownership and operation of such ships are concerned and on any gains arising on the liquidation, redemption, cancellation or any other disposal of shares, securities or any other interest, including goodwill in any shipping organization. Any gains arising from the financing of a shipping organization are also tax exempt.
A Maltese shipping company can now have wider objects, including, ship management, holding shares in other shipping companies and to register ships in other jurisdictions. It is now possible to have single member companies – it is no longer essential to have a minimum of two shareholders. Shares pledges can now be registered under our law and will be fully effective against the company.
a. registration requirements
- proposed name of the company;
- details (name/s and address/es) of shareholder/s and number of shares to be held by each;
- in case of individual shareholders – certified copies of their passport;
- in case of company shareholders – certified copy of the Certificate of Incorporation, Memorandum and Articles and a Good Standing Certificate;
- details (name/s and address/es) of the director/s to be appointed and certified copies of their passport;
- power of attorney
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