Malta: The Malta International Ship Register

Last Updated: 4 December 1997
1 A Leader in Ship Registration

1.1 Introduction

The Malta flag is one of the top ten flags that can be quoted as a flag of confidence and flexibility. It is a reputable open ship register always striving to update its legislation to bring it in conformity with international regulations and conventions; thus helping the international shipping community by enhancing further our local legislation and increasing facilities and flexibility towards the shipowner whilst improving further the reputation of our flag.

Malta's register has developed swiftly over these last few years. The Merchant Shipping Directorate of the Malta Maritime Authority has improved its safety department by increasing, inter alia, its surveyors worldwide and carrying out random inspections on Malta flag ships in different ports all over the world. Malta's safety inspection programme further consolidates the country's position in the international arena.

As previously stated, revisions are in hand to bring Malta's merchant shipping legislation in line with the stature that the register has assumed in just a few years. A review committee comprising of government, legal and industry officials together with representatives from the Maltese Shipowners Association, has been set up to further study and improve our existing Merchant Shipping Act i.e. to enhance our legal framework for the better regulation and administration of matters relating to merchant shipping.

One of the many responsibilities of the Merchant Shipping Directorate is to foster Malta's relations in international shipping fora and to administer the implementations of international maritime conventions and agreements.

Due to several bilateral treaties between various countries, the Maltese ship is nowadays one of the least flag vessels that encounters problems while trading internationally. Its good standing is evidenced by the number of shipowning and ship management companies of repute which register their ships in Malta and also by the confidence shown by leading international banks and financiers who at times recommend the Maltese register.

1.2 Registration - Clear Benefits

Ship registration and the provision of all ancillary services is the responsibility of the Merchant Shipping Directorate of the Malta Maritime Authority.

The Registry of Shipping provides fast, reliable and efficient ship registration services to users of the Malta flag. The Directorate offers a twenty-four hour, seven days a week service in the case of urgent matters. The advantages which make the Malta register the flag of your choice are:

  • Low company formation and ship registration costs
  • Complete tax exemption to owners, charterers and financiers of Maltese ships over 1000 net tons; (this exemption may also be extended to smaller ships)
  • Position of financiers is secure by amended legislation regulating mortgages and other ship debts
  • No restrictions on the nationality of the shareholders and directors of Maltese companies, and of the master, officers and crew of Maltese ships
  • No restrictions on the sale and mortgaging of Maltese ships
  • No restrictions on the sale or transfer of shares of a company owning Maltese ships
  • No trading restrictions
  • No restrictions on age of vessel , however, vessels over 20 years of age must adhere to special formalities to establish the seaworthiness of the ship
  • Exemptions and benefits in relation to company formation
  • Preferential treatment is given to Maltese ships in certain ports
  • Twenty four hour, seven days a week service in respect of urgent matters
  • Double taxation treaties with 29 countries of which 19 are currently in force and others have been initialled or signed (vide Appendix 'B')
  • No exchange control restrictions
  • Possibility to register vessel while still under construction
  • Possibility to reserve name of vessel prior to registration
  • Offshore companies operating ships enjoy all the exemptions and benefits granted to other offshore companies registered in Malta. This makes Malta an ideal base for ship operations.

2. PROCEDURES

2.1. Definition

The procedure for the registration of a ship is a well defined and relatively straight forward procedure.

In order to be eligible for registration as a Maltese ship, a vessel must be wholly owned by citizens of Malta or be a body corporate established under the laws of Malta .There, the formation of a Maltese shipping company is the first step to be taken in a Malta flag registration.

Provisional registration can be effected very quickly and has a validity of six months, although this can be extended by a further six months. By this time all documentation has to be completed for permanent registration. This includes in particular, evidence of ownership and cancellation of former registry. Authority to operate still remains linked to conformity with the relative international standards on manning, safety and pollution prevention.

2.2 INCORPORATION OF THE MALTESE COMPANY

The registration of a Maltese company is simple and inexpensive operation.. A company may be registered in a few hours on the basis of a Power of Attorney sent by the shareholders to their representatives in Malta and on the provision of the following information:

Some important characteristics of the Maltese shipping company include:-

  • the minimum amount of subscribed capital required by law is of LM500 of which only 20% need be paid up;
  • the company need not have its principle place of business in Malta;
  • there must be at least 2 shareholders who may be all foreigners;
  • no local directors are required;
  • the company is exempt from the filing of annual accounts, but instead a declaration in lieu of tax returns is filed (provided that the company is exclusively formed for the purpose of running / operating exempted ships;
  • the company may be liquidated within a few months of a company resolution to this effect.

Where all the directors of the company are foreigners, since certain formalities have to be carried out in Malta both in connection with the Company itself as well as with the eventual registration it is normal to delegate to one of the officials of our firm the authority to represent the company in matters relating to the administration of the company and to the ship registration procedures.

In the light of the recent changes to Company Law, it is now possible that the beneficial owners of the company remain completely anonymous by incorporating the company through the series of appropriately licenced nominee companies.

3. REQUIREMENTS FOR THE REGISTRATION OF SHIPS UNDER THE MALTA FLAG

A vessel is first registered provisionally under the Malta flag for a period of six months (extendible to one year) during which period all documentation must be finalized.

3.1 Provisional Registration

The requirements for provisional registration are:

  • an application for registration by the owner or authorised representative giving details of the ship and of its present registry, if any. This application may also be accompanied, if required, by an application for a change of name
  • proof of qualification to own a Maltese ship; in the case of a body corporate, the Memorandum and Articles of Association
  • a declaration of ownership made before the Registrar by the owner or an authorised representative
  • evidence of seaworthiness; i.e. confirmation of class and of validity of all safety conditions. This is only applicable to tradiang vessels and not to pleasure yachts.
  • payment of initial and annual registration fees.

3.2 Permanent Registation


A provisional certificate will cease to have effect unless the following documents are delivered to the Registrar within 30 days of provisional registry:
  • a builder's certificate in the case of a new building or if the vessel has not been registered elsewhere; otherwise, a bill of sale or any other document by which the vessel was transferred to the applicant for registry (this document must bear a date which is on or after the date of incorporation of the body corporate owning the vessel, but always PRIOR to the date on the Declaration of Ownership)
  • a cancellation of registry certificate from the last country of registry showing vessel to be free from encumbrances or otherwise
  • a certificate of survey
  • in the case of vessel exceeding 24 metres in length, a copy of the Tonnage Certificate certifying that the vessel has been surveyed in accordance with Maltese regulations which in turn are in conformity with the 1969 International Tonnage Convention
  • evidence that the vessel has been marked in accordance with the law (Carving & Marking Note)
  • at least one crew list accompanied by photocopies of the officers' certificates of competency ( not applicable to pleasure yachts).
  • In addition to the requirements already specified, the following documentation has to be produced before a Permanent Certificate of Malta Registry could be issued i.e. within six months from the date of Provisional Registry:
  • Wireless Telegraphy Station Licence form and Radio Installation Survey Report form duly signed and stamped by a qualified surveyor of a recognised classification society (A call sign will be assigned to the ship)
  • Convention certificates issued by a recognised classification society on behalf of the Maltese administration
  • an undertaking by the beneficial owners to the Registrar that they will return to the Maltese registry the provisional certificate of registry within one month from the release of the permanent certificate of registry. Such an undertaking may be sent by telex or fax.

3.3 Extension of Provisional Certificate

If all the documents necessary for the issue of the Permanent Certificate have NOT been delivered within the stipulated time, a Provisional Certificate may, on good cause being shown, be extended for a further 30 days and may be renewed further for a period of six months on the date of which the provisional registry expires. The provisional registry will not be renewed further. A completely new application will have to be submitted together with payment of initial fees if the owner still wishes to retain the Malta flag.

3.4 Expiry and renewal of Certificate of Registry

A Permanent certificate of registry once issued, must be renewed every year upon payment of annual registration fees and subject to compliance with safety requirements as laid down by law.

4. Bareboat Charter Registration

4.1 Maltese law provides both for bareboat charter registration of foreign ships under the Malta flag and also for the bareboat charter registration of Maltese ships under a foreign flag.

Vessels so registered enjoy the same rights and privileges and have the same obligations as any other ship registered in Malta. Mortgages, however, cannot be entered in the register of the ship's bareboat charter register in Malta.

The two main principles adopted at law on bareboat charter registration are the compatibility of the two registers and, that matters regarding title over the ship, mortgages and encumbrances are governed by the underlying registry, while the operation of the vessel falls under the jurisdiction of the bareboat charter registry.

A bareboat charter registration shall be for the duration of the bareboat charter or until the expiry date of the underlying registration, whichever is the shorter, but in no case for a period exceeding two years. Registration may be extended.

4.2 The following are the requirements for bareboat charter registration in Malta :

  • the ship must be bareboat chartered to a Maltese citizen or to a Maltese body corporate
  • the ship is not a Maltese ship and the a compatible register.
  • the ship is not already registered in another bareboat register.

The documents to be produced are:

  • an application for registration by the charterer or an authorised representative
  • a declaration of bareboat charter accompanied by a copy of the charter agreement
  • a transcript or an extract of the underlying registration
  • the consent in writing of the underlying registry, owners and mortgagees
  • evidence of seaworthiness, in the case of trading vessels, confirmation of class
  • payment of initial and annual registration fees.

4.3 MORTGAGES AND ENCUMBRANCES

The owner to register mortgages and encumbrances on a vessel is vest solely in the underlying registry.

4.4 CLOSURE OF BAREBOAT CHARTER REGISTRATION

Closure of the register may be obtained in the following circumstances:

  • if any of the above provisions are not adhered to;
  • at the request of the charteree;
  • at the request of the underlying registry;
  • at the request of any of the mortgagees;
  • at the request of the owners;
  • on termination of registration in the underlying registry;
  • on the lapse of the time period referred to above.

4.5 BAREBOAT CHARTER REGISTRATION IN A FOREIGN REGISTRY

On application a Maltese registered vessel may be bareboat charter registered in a foreign compatible registry subject to the written consent of the Registrar in Malta.

However, before such an application may be accepted, the consent in writing of all the registered mortgagees is required, together with a written undertaking by the owners to surrender the certificate of registry.

A copy of the bareboat charter must also be presented. During the period of the bareboat charter the Maltese flag cannot be hoisted.

The rest of the requirements and provisions are similar to those for bareboat registration into Malta but obviously the underlying registry would now be the Malta registry.

5. Mortgages

The status of the Maltese mortgage was strengthened by the 1988 amendments to the Merchant Shipping Act. All leading international financial institutions have registered mortgages in respect of Maltese ships. Once a vessel is provisionally registered, registration, transfer and discharge of mortgages may be effected immediately on presentation of the relative documents to the Registrar.

Some of the safeguards protecting the mortgagee of maltese ship include:

  • a registrered mortgage is an executive titel under Maltese Laws and can be enforced without the need for a judgement;
  • mortgagees are given a high preferential treatment in the ranking of privileged debts;
  • the Registry recognizes the right of the mortgagee to maintain the status and the validity of the registration of the vessel;
  • in case of default the mortgagee is entitled to take possession of the ship or shares in respect of which the mortgage is registered;
  • the vessel cannot be sold or re-mortagaged without the consent of the mortgagee;
  • the mortgage shall attach to the ship until it is discharged and shall attach to any proceeds from any eventuality arising from collision or other major mishap as well as to insurance proceeds;
  • a registered mortgage of a ship may be easily transferred to any person;
  • vessels constitute a particular class of movables under MalteseLaw whereby they form a separate and distinct asset within the estate of their owner fr the security of actions and claims to which the vessel is subject. In this case, all the actions and claims to which a vesssel is subject shall have preference over the ship and its proceeds over all other debts and liabilities of teh owner's estate.

6. Closure of Registry

A Maltese ship's registry may be closed at the request of the owner provided all liabilities and obligations in respect of the ship towards the State of Malta have been fulfilled and the consent of all registered mortgagees has been produced. When the ship's Certificate of Registry is surrendered the Registrar will issue a deletion certificate.

(At Appendix 'A' to this report are the Fees and Taxes which have to be paid to the Malta Maritime Authority in connection with the registration of a vessel under the Malta flag).

7. Manning

7.1 Regulations

Maltese ships are subject to the provisions of the Merchant Shipping Act, 1973 and ancillary regulations concerning the competency of officers and seamen.

7.2. Minimum Safe Manning Certificate

The SOLAS Convention requires that trading ships of 500 gross tonnage and over must carry at all times a valid minimum safe manning certificate.

Upon registration of a ship, and on application by the owner, the Merchant Shipping Directorate issues a minimum safe manning certificate valid for the period of the provisional registry. On permanent registration the Directorate will issue a minimum safe manning certificate valid for three years.

The certificate ceases to be valid upon closure of the Maltese registry of the ship or in the event of any change in the equipment, construction or use of the ship which affects the stipulated manning.

There are no restrictions as to the nationality of the seamen engaged on Maltese ships. However, the crew on Maltese trading ships must be in possession of a recognised valid certificate of competency issued in terms of the 1978 STCW Convention.

7.3.Conditions of employment

A contract of employment in the form of a Crew Agreement must be made between the master and seamen and signed in the presence of a shipping master; i.e. a Government official, if available.

In Maltese ports, the terms of Agreement (including records of engagement and discharge of seafarers) must be endorsed by a Maltese shipping officer and, in foreign ports, by a Registrar or Maltese Consular Officer, if available. An agreement can be made for a single voyage or, if the voyage is less than six months, it may be extended over two or more voyages.

7.4. Crew and Officers

The Master and Officers must be certified by recognised authorities in order to be acceptable to the Registrar. This will normally be the authority in the country of their nationality. Copies of certificates of competence are enough.

The Registrar will require a crew list indicating ranks and seamen book numbers and nationality. This may be transmitted via fax. This information is required to ascertain that the vessel is properly manned and that the master, especially, is duly qualified.

Signed crew agreements need to be submitted to the Registrar. There is no national standard of wages for seamen and officers on foreign going vessels and the local minimum wage for seamen is based on the local industry minimum wage.

7.5. Employment of Maltese Seamen

Malta has since time immemorial enjoyed the reputation of having good and reliable manpower well versed in seamanship. It has always been the wish of the Maltese Authorities to encourage as much as possible the employment of Maltese seamen on Maltese registered ships.

However, the right of a shipowner to employ foreign seamen is not in any way being restricted, nor is the shipowner being obliged to employ a minimum number of Maltese seamen as part of the crew members.

8.International Conventions

Malta is a member of the International Maritime Organisation and attends regularly several of its important Committees. It has practically adopted all the major international maritime conventions including:

CLC 69, Tonnage 69, COLREG 72, FUND 71, INMARSAT, Load Lines 66, London 72, MARPOL 73/78, SOLAS 74/78 and STCW 78.

9. Authorised Classification Societies

Survey, tonnage and convention certificates may be issued on behalf of the Maltese Government by the following classification societies:

  • American Bureau of Shipping
  • Bureau Veritas
  • Det Norske Veritas
  • Germanischer Lloyd
  • Hellenic Register of Shipping
  • Lloyds Register of Shipping
  • Nippon Kaiji Kyokai
  • Registro Italiano Navale

10. Maritime Agreements

Malta has concluded a maritime agreement with the following countries:

  • People's Republic of China
  • Russian Federation

Maltese ships also benefit from a cabotage agreement signed between Malta and the USA with regard to the carriage of empty containers.

Furthermore, Maltese ships trading in Greece benefit from an exemption from taxes on their earnings by way of a reciprocity in terms of Greek Law Decree No. 4444/1964.

11. Double Taxation Agreements

Besides regularly participating at major intergovernmental and non governmental maritime organisations, Malta is constantly striving to conclude bilateral treaties with various countries in order to ensure that Maltese ships benefit from the good standing and reputation that Malta enjoys in the international sphere. To this end Malta has negotiated a total of 29 double taxation treaties 19 of which are already operative. (A list of these treaties is attached as Appendix 'B' hereto).

12 .Conclusion

The Malta Maritime Flag is the flag of a well established and dynamic maritime centre. Maritime Malta is proud of its flag, its natural harbours and all other maritime services that it offers. Our register draws its strengths by being an integral part of such a prosperous international maritime and service centre at the heart of the Mediterranean.

Appendix 'A'

SHIP REGISTRATION FEES (BASED ON NET TONNANGE)


Registration Fees

                                                         Lm/nt

            Initial fee
            First 8,000 nt                                0.10
            Additional tons                               0.03
            Minimum fee: Lm 50

Annual Fee
            First 8,000 nt                               0.15
            next 2,000 nt                                0.08
            next 5,000 nt                                0.06
            next 5,000 nt                                0.05
            next 10,000 nt                               0.04
            next 20,000 nt                               0.03
            excess over 50,000 nt                        0.02
            Minimum fee: Lm 75

Other than for the year of first registration, the annual registration fees are increased by the following charges in respect of non-Maltese seamen:

                                                  Lm/seaman/month
            First 30 seamen                             1.00
            next 70 seamen                              0.50
            excess over 100 seamen                      0.20

Lm = US$ 2.600

Appendix 'B'

List of Double Taxation Treaties between Malta and other countries which are currently in force:

Australia                     Finland               Norway

Austria                       France           Netherlands

Belgium                       Germany             Pakistan

Bulgaria                      Hungary               Sweden

Canada                        Italy            Switzerland

Cyprus                        Libya         United Kingdom

United States of America

In addition treaties have been initialled or signed with the following countries:

  • China (operative in 1996)
  • Kuwait (initialled)
  • Poland (operative) (1996)
  • Czech Republic (initialled)
  • Luxembourg (signed)
  • Republic of Korea (initialled)
  • India (operative 1997)
  • Malaysia (initialled)
  • Slovak Republic (initialled)
  • Tunisia (initialled)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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