Shipping

In terms of the Merchant Shipping Act, a vessel that can be registered in Malta comprises any description of vessel used in navigation, whether self-propelled or not, and it includes barges, pontoons, floating establishments, installations or structures, oil rigs and other similar vessels.

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The registration process is quite straightforward. Besides complying with technical requirements mandated by the IMO for a particular vessel type (compliance with applicable conventions), the registration process would entail the filing of the following documents: (i) an application for registration (ii) a declaration of ownership (these two items are required in order to obtain provisional registration) (iii) documentation evidencing the root of title of ownership of the vessel and (iv) a deregistration certificate from the vessel’s previous registry (originals of the latter two items are required within six months from provisional registration). The registration of a vessel by a bareboat charter is also permitted, provided that the aforementioned requirements are satisfied.

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Vessels (of any type and however used) can be registered in the name of: (i) citizens of Malta, (ii) Maltese companies, (iii) foreign companies, provided that these appoint a Maltese resident to act as their Resident Agent (a form of registry representative) and (iv) any citizen of the EU, EEA or Switzerland provided that such citizen appoint a Resident Agent as above described. The appointment of a Resident Agent and all administrative formalities in that regard are administered by the Merchant Shipping Directorate of Transport Malta.

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Mortgages over vessels can be registered in Malta in order to secure the performance of any obligation/s (whether existent or future obligations) and/or the payment of a sum/s of money by a creditor (whether such debtor is the shipowner, or whether the debtor is a third party for whom the shipowner is providing a guarantee for the performance of obligations or the payment of amounts due, by virtue of the mortgage over an owned vessel).

In order to benefit from the terms of Maltese law relating to mortgages, a mortgage must be registered with the Ship Registry and recorded accordingly.

The enforcement of mortgages allows self-help remedies at the time of the occurrence of a default in terms of the transaction documents regulating a particular financing arrangement. Subject to the completion of basic procedures, the default amount (including an accelerated amount if applicable) would constitute an executive title in terms of Maltese law (equivalent to a judgment). This would allow any enforcing creditor to: (i) proceed to the sale of the vessel, whether by public auction or under private charter (sale to a private buyer sourced by the mortgagee) under the authority of the court or otherwise directly by the mortgagee in terms of Maltese law and the terms of any Deed of Covenants; or (ii) proceed to recognition of such executive title as a judgment in other European jurisdictions with a view to seizing the mortgaged vessel accordingly.

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Any registered owner or bareboat charterer of a Malta-registered sea-going vessel that is involved in the international carriage of goods or passengers by sea for reward, is entitled to a tax exemption on income on all revenue generated solely from such activity, provided that the relevant tonnage taxes are paid over a particular vessel owned or otherwise bareboat charter by such entity.

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