Malta has always been intimately related to transport – throughout history it has been dependent on international transport for survival, given that its size makes it unable to satisfy all of its requirements in an economic way, and on the other hand cross-border international transport has always made good use of its strategic location at the center of the Mediterranean Sea. Malta has, throughout the ages, become a transport hub of great value, and as such it has established a clear strategic national vision supporting the aviation industry. Malta’s status as a leading financial services jurisdiction and a maritime hub, together with its accession to the European Union (EU)  in May 2004, have paved the way for a world-class aircraft register.

Aircraft registration in Malta is regulated by the Malta Aircraft Registration Act of 2010. The main aim of this Act is to regulate the registration of aircraft, the registration and enforcement of aircraft mortgages, the implementation of the Cape Town Convention and the aircraft protocol.

Aircraft registration in Malta can result in significant advantages relative to registering an aircraft in other jurisdictions. Such advantages are delineated hereunder.

  • An underlying corporate tax system that is considered to be one of the best tax systems around as well as an extensive network of double taxation treaties;
  • The supply of aircraft for use by airline operators for international transport of passengers and/or goods is VAT exempt;
  • Regulation through a trusted and robust legislative framework;
  • Clear delineation of aircraft rights and interests;
  • Wide-ranging registration options for non-commercial aircraft;
  • Clear rules on the tax treatment of finance charges, tax deductions available to finance lessors and capital allowances for lessees. operating leases of aircraft are also allowed;
  • No withholding tax on payments relating to the lease if the lessor is not a Maltese tax resident;
  • The private use of an aircraft by an individual who is not resident in Malta does not constitute a taxable fringe benefit under certain conditions;
  • The possibility of dividing the aircraft title in specified fractions or percentages between co-owners. Each distinct title fraction  may be financed by (a) different creditor(s) which may use the particular fractional interest for which finance has been provided as collateral (this is referred to as fractional ownership recognition);
  • Very competitive minimum depreciation periods for the aircraft are allowed;
  • Allows a higher degree of lender protection, more effective remedies and lower borrowing costs by implementing the provisions of the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol;
  • Allows for the possibility of registering aircraft under construction once uniquely identifiable. Airworthiness surveys can be carried out upon aircraft completion;
  • Well-serviced airline industry – from ground handling services all the way to repairs and maintenance;
  • Possibility of recording various aircraft details apart from its ownership; and
  • Implementation of high safety and security standards.

An aircraft may be registered by:

  • The owner of the aircraft who operates it;
  • The owner of an aircraft that is currently under construction or temporarily out of service;
  • An operator of an aircraft under temporary title subject to the satisfaction of the conditions set out by the law;
  • An aircraft buyer under a conditional sale or title reservation agreement who is authorised to operate the aircraft.

Persons eligible to register an aircraft in Malta include:

  • Citizens of Malta, of an EU Member State, a European Economic Area State, or Switzerland, having a place of residence or business with Malta, the EU, the EEA or Switzerland, including a person sharing in the ownership of the aircraft;
  • An undertaking formed and existing under the laws of Malta, a Member State of the EU, an EEA State, or Switzerland, and having its registered office, central administration and principal place of business within the same jurisdictions, where no less than 50% of the undertaking is owned and effectively controlled by the Government of Malta, any EU Member State, or any persons referred to above, whether directly or indirectly through one or more intermediate undertakings.
  • A citizen of, or an undertaking established in, a member country of the OECD provided that it:
    • has the legal capacity to own and operate an aircraft lawfully;
    • appoints a Malta-based resident agent to represent the owner in Malta for registration purposes;
    • complies with the applicable regulations / guidelines.

Aircraft registration in Malta is relatively straightforward. The documentation required for aircraft registration follows:

  • an application for aircraft registration;
  • if the aircraft was registered, de-registration from the previous register;
  • proof of ownership;
  • proof of marking.

The aircraft owner or operator will need to obtain an Airworthiness Certificate that will grant the aircraft its license to fly.

Private aircraft may be registered by providing the aircraft’s technical specifications and operating manuals. A maintenance program approved by a Continuous Airworthiness Maintenance Organisation to ensure continuous airworthiness is normally also to be provided to comply with the Malta Register’s safety and security criteria.

A commercial aircraft operates with the main intent of transporting passengers or cargo in return for a financial reward. The EU-OPS as specified by Regulation (EC) 965/2012 of the European Commission in October 2012 regulates commercial aviation. Commercial aircraft is subject to a number of licensing and certification procedures intended to ensure that the aircraft is being properly managed and maintained with a view to guarantee safety.

Quality and safety are prime concerns for the Civil Aviation Directorate at Transport Malta. Indeed, Malta operates a very strict safety regulation regime and its name has, over the years, become synonymous with excellence in this area. It is also worth noting that Malta is a member of the European Aviation Safety Agency (EASA) and a contracting State of the International Civil Aviation Organisation (ICAO). As a matter of principle, Malta believes that being safe is a necessary but not sufficient for being considered airworthy and this has enticed considerable investment in the aircraft maintenance sector.

An Airworthiness Certificate needs to be obtained by both commercial and private aircraft. The certificate is issued only after the Civil Aviation Directorate is satisfied that an airworthiness review has taken place on importation and thereafter on a regular basis every 12 to 36 months, or as otherwise directed by the Civil Aviation Directorate. The review takes place over a period of between a day and 3 weeks and includes a physical inspection as well as an inspection of the pertinent documentation. All review findings must be disclosed unless an Airworthiness Review Certificate is issued.

The Air Operator Certificate (AOC) is issued upon confirmation that an aircraft operator has satisfied the stipulated prerequisites to guarantee safe operation. An AOC applicant needs to satisfy all technical and operational requirements. Additionally, the operator cannot hold an AOC issued by another authority. The AOC is acquired together with the Air Operating License (AOL) and empowers the operator to offer air services. The AOL is granted only if the operator satisfies all the financial and commercial requirements of the business, which must be located in an EU Member State. In order to apply for the AOL, the operator must also have an aircraft at his disposal. The AOC acquisition process is delineated hereunder:

  • Pre-application phase
  • Formal Application phase
  • Document Evaluation phase
  • Inspection and demonstration phase
  • Certification phase

Equinox Advisory can help by offering assistance through its comprehensive suite of services throughout the entire lifecycle of your aviation project starting from the license planning process and in devising a flexible yet secure structure, all the way through to the setting up phase, the obtainment of a license and the operating of the license. If it ever becomes necessary to discontinue the license, we can also help in the winding down of the activity.

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