Who is eligible to own a Maltese registered yacht?
Yachts may be registered under the Maltese flag by:
- Maltese individuals and Maltese registered companies;
- EU citizens and EU registered companies; and
- Non-EU residents and entities.
In the case of a non-EU residents, a Resident Agent shall need to be appointed to act as the main point of contact between the international owner and the Maltese authorities.
The resident agent shall be responsible to sign and file all declarations and forms with the Maltese authorities and departments on behalf of the international owner and to act as the judicial representative of the international owner for judicial proceedings in Malta.
The resident agent shall also have the following powers:
- Sign and file, on behalf of the international owner, applications, declarations, notices, returns and any other document required in terms of Maltese law;
- Apply, on behalf of the international owner, for the registration of a ship or the closure of register of a ship, and to perform any ancillary act in relation thereto;
- Pay all relative fees and taxes payable in terms of Maltese law;
- Do, on behalf of the international owner, all other things as may be considered conducive or ancillary for the registration of a ship under the Merchant Shipping Act or for the maintenance of such registration;
- Do, on behalf of the international owner, all other things as may be considered conducive or ancillary for the cancellation of the registration of a ship under the provisions of the Merchant Shipping Act;
- Authenticate documents issued by the international owner.
What is the procedure for registering a vessel?
The process of registering a vessel in Malta is simple and straightforward and is divided into two stages– Provisional Registration and Permanent Registration.
For the owner of the vessel to be issued with a Provisional Registration Certificate, the application form together with relevant documentation (such as the application for change of name of yacht (if applicable), the proof of qualification to own a Maltese vessel, the provision of a copy of the vessel’s current International Tonnage Certificate) have to be submitted to the authorities in Malta. Together with the aforementioned documentation, there shall also be the payment of the initial registration fees and the annual tonnage tax.
Once the documents are vetted by the authorities, a certificate for provisional registration is granted for a period of six months.
During provisional registration, further documentation has to be submitted so that the vessel may be permanently registered. For instance, if the vessel was previously registered in another jurisdiction, during provisional registration, the certificate of cancellation from registry is required from the administrative authority where the vessel was last documented. If the required documents are not submitted within these 6 months, the period of provisional registration may be extended further.
Furthermore, the Registrar may impose a condition that the vessel be inspected by an inspector or surveyor of vessels prior to the provisional registration. This was prompted by previous incidents involving Maltese flagged vessels, particularly the Erika incident which served as an incentive for this change.
Once the vessel is permanently registered, the provisional certificate of registration shall be returned and a permanent certificate of registration shall be issued. The certificate shall then be renewed on each year after its issuance.
For permanent registration of the vessel, the following documentation must be filed with the registrar:
- A certificate of survey
- A copy of the vessel’s tonnage certificate issued under the Authority of the Government of Malta
The Registrar-General may exempt those vessels which are under construction or being rebuilt from filing the said certificates for a period of one year. Upon good reason being shown, such period may be extended for another year.
Does Maltese law allow for bareboat charter registration?
While time and voyage chartering are the more renowned forms of chartering, bareboat chartering is another way in which any vessel may be chartered. Bareboat chartering concerns the lease or sub-lease of a vessel to a charterer for a stipulated period of time. The bareboat charterer is granted full use and enjoyment of the vessel however, he shall not have the right to sell or mortgage the vessel.
This ‘full use and enjoyment’ places on the bareboat charterer the responsibility for the operation of the vessel in terms of both management and crew. The charterer is therefore subrogated into the obligations of the owner insofar as maintenance of the vessel and conformity with applicable law is concerned. Moreover, the charterer must ensure that the vessel is returned to the owner in a state which complies with the provisions of the contract governing the bareboat charter arrangement. Most commonly, this would mean that the vessel is returned in the same condition it was delivered in, save for ‘wear and tear’ which is considered reasonable and fair.
The question is – why does a vessel need to be registered for bareboat chartering?
A charterer may be required to temporarily register the ship in a foreign registry other than the one in which it is currently registered. Upon this registration, the vessel shall temporarily fly and operate under the supervision of the foreign registry and the original register (also referred to as the ‘underlying registry’) shall only regain jurisdiction and control over the vessel upon the termination of the bareboat charter registration. Notwithstanding this shift in control, the underlying register shall still retain control over matters regarding title over the ship and mortgages.
Maltese law permits for bareboat chartering registration both into and out of Malta. Therefore, it is possible for a foreign vessel to be bareboat charter registered under the Malta flag and also for a Maltese vessel to be bareboat charter registered under a foreign flag. What is important is that the Maltese and the foreign register are compatible registers.
The process for bareboat charter registration in Malta is similar to the normal registration procedure, while fees for registration are the same as those applicable for normal registration.
Is it possible to convert a commercial yacht to a pleasure yacht, or vice versa?
Although Maltese law is rather silent on changing the status of a yacht in this manner, Transport Malta (‘TM’) issued guidelines regarding changing the status of a yacht from a commercial to a pleasure yacht in the Commercial Yacht Code (‘CYC’).
To change a yacht’s status from commercial to pleasure, the applicant, whether the owner or manager of the ship, must supply their confirmation that they will withdraw the Certificate of Registry issued in favour of a commercial yacht upon receipt of the certificate evidencing the status of the vessel as a pleasure yacht. The owner (or manager) will then have to return the previous Certificate of Registry indicating a commercial status to the administration. The documentation necessary for a yacht to maintain its commercial status shall continue to be held by the Master of the vessel.
The application process to change from a pleasure to commercial yacht is similar to the above process and while the owners or managers must confirm that they will surrender the certificate to the registry upon receipt of the updated one, further processes have to be followed, this depending on whether the yacht was previously registered as a commercial vessel or not.
If a vessel was previously registered as a commercial yacht and it has continued to maintain its surveys and certificates, it shall only require declarations by an appointed surveyor or classification society to this effect, and a declaration by the Master confirming that as from the last periodical survey, there were no damages sustained by the vessel which would result in the Certificate of Compliance to Trade as a Commercial Yacht, the Class Certificate and any other applicable certificates being rendered invalid.
On the other hand, if the vessel that did not maintain its certificates, it shall require completion of the surveys and reports until it is confirmed by an appointed surveyor or classification society that it conforms with the requirements set out in the CYC. Upon completion of the above, TM shall then confirm whether these requirements have been met and issue a Certificate of Compliance to Trade as a Commercial Yacht.
It is noteworthy that TM’s guidelines recommend that yachts which have changed their status from commercial to pleasure yachts maintain the requirements for commercial yachts (as stipulated in the CYC) so as to facilitate any future changes in status.