Aviation Services in Malta 

Representing a leading financial services jurisdiction within the European Union, Malta has long established a sound political vision inline with the requirements of today’s aviation industry. Following its international success in the maritime industry, Malta is now gearing up to bring the aviation, private jet, and registration sectors on a par. 

On the 1st October 2010, the Aircraft Registration Malta Act 2010, often referred to as the “Act” came into force with the intention of regulating aircraft registration and implementing aircraft loans, while implementing the Cape Town Convention as well as the aircraft protocol and its interface within Maltese legislation.

The Act has introduced a number of concepts and advantages related to aircraft registration and mortgages in Malta as follows:

1. Highly attractive corporate taxation structures 
2. Fractional ownership of aircraft is acknowledged, which implies that the title may be divided in specified percentages or fractions between co-owners through trust structures, which may be individually financed by various creditors.
3. Wide registration prospects for aircraft not intended for commercial air transport
4. An extensive network of double taxation treaties and a sound legislative framework
5. Transparent interests and rights of aircraft
6. Encourages the development of operating leases and aircraft financing while providing clear rules about taxation, including any tax deductions or capital allowances
7. Non-residents may benefit from no withholding tax on any lease payments
8. Private use of an aircraft by a non resident representing a employer or company whose business activities include the leasing, ownership, or operation of an aircraft for international transportation will not constitute a taxable fringe benefit
9. Competitive aircraft minimum depreciation periods
10. Implementations of provisions found within the Cape Town Convention that grant a higher level of protection and efficiency to secured lenders whilst lowering borrowing costs
11. Option of registering an aircraft under construction
12. Option of recording several details related to the aircraft including ownership or other areas of interest
13. Local availability of a wide range of services related to aviation
14. EU standards of safety and security
    

The Act ensures that whenever a trust relation is present, and the Director General is requested to review the identity of the underlying beneficiaries, certain procedures have been put into place in order to safeguard the confidentiality of the trust agreement in line with Maltese law. In these cases, the Director General is obliged to ensure that any disclosure required for the purposes of aircraft registration will not negatively impact of the trust operation and its inherent confidentiality.

The Act also recognises the benefits resulting from the engagement of trusts, with a specific mention of fractional ownership. In this case, the provision for coordination and regulation of the beneficiaries’ interests and rights are noted in the trust deed, allowing for several possibilities.