Company in Malta

Malta is an EU Member State with
an Exceptionally Advantageous Tax Regime

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Malta company formation package: 345 EURO – arrangement of Malta company formation and bank account (via officially licensed local member / partner firms) including VAT and Tax registration. "FBS KOTSOMITIS", operating since 1998, is a well-known and established international professional services network with officially licensed and regulated local member / partner firms. Contact us to start process by sending an email to enquiries@fbsmalta.com, by using our contact form or by calling at +356 2338 1500.

Aviation

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Malta Aircraft Registration

The Aircraft Registration Act, Chapter 503 of the Laws of Malta, (“the Act”) is the regulatory framework for the registration of aircrafts and aircraft mortgages.  The Act implements the provisions of the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol (“the Convention”), following Malta’s accession to the convention, further cementing Malta’s reputation as an aviation centre.

Eligibility Criteria

The registration of aircrafts in Malta is restricted to “Qualified persons”, i.e. any of the following:

  • Government of Malta;
  • Any EU / EEA and Swiss person (including body corporates);
  • Trustees for such interests;
  • All operators of commercial aircrafts in possession of an Air Operator Certificate (AOC);
  • Any natural person who is a citizen of, or an undertaking established in a member country of the OECD with the legal capacity to own and operate an aircraft, provided that such person appoints a local resident agent.

Qualified persons may register an aircraft in Malta, insofar as they are either:

  • owners of the aircraft (includes aircraft under construction, in which case the airworthiness of the craft shall be assessed after construction); or
  • operators of the aircraft (under a temporary title); or
  • buyer of an aircraft under a conditional sale or tile reservation

Fractional Ownership

A novel concept introduced by the Act is the concept of fractional ownership, thereby allowing an aircraft to be split among co-owners in specified fractions or percentages.  Each ownership interest may be annotated in the national aircraft register and in certificates issued by the Director General of Civil Aviation, who shall register the name, address and interest or title of the owner holding such interest.

Security

An aircraft is by of its very nature a movable.  However, in terms of the act, an aircraft is deemed to constitute a separate and distinct asset from the estate of their owners for the security of actions and claims to which the aircraft may be subject.  Therefore in the event of insolvency or bankruptcy brought about against the owner of the aircraft to which the aircraft may be subject, shall have preference over other debts of the owner’s estate.

Another innovative feature, is the possibility to segregate separate parts of the aircraft, so it is possible to have ownership, and consequently security, limitedly over the engine or spaceframe of the aircraft.  A registered mortgage may therefore be secured over a part of the aircraft.  In the event of default by the mortgagor, the mortgagee may:

  • give possession of the aircraft or share secured;
  • sell the aircraft;
  • apply for any extension, pay fees, receive certificates to maintain status and validity of the aircraft;
  • lease the aircraft to generate income therefrom;
  • receive any payment of the price, lease payments and any other income generated from the management of the aircraft.

Tax and Fiscal Benefits

Like all companies resident in Malta, companies which own and/or operate an aircraft would be subject to income tax on company profits at a rate of 35%. However, this is subject to Malta’s full imputation tax system, wherein tax paid by a company in Malta is, on the distribution of a final dividend, imputed to the shareholder as a tax credit against the shareholders’ tax liability. Therefore, a shareholder will, upon a distribution of the dividend, be entitled to a refund in part or in full of any advance tax levied on the distributing company. The full imputation tax credit thereby renders Maltese companies highly efficient tax vehicles, with a number of applicable refunds to shareholders possible. The default refund applicable to a fund management company in respect of active trading income, is a refund of 6/7ths. These tax benefits essentially consist of a net tax leakage of just 5% on income and gains deriving from trading activities (or as low as 0% when grossed up with foreign income tax), as set forth in the table below:

Maltese Company No Foreign Tax With Foreign Tax
Net Foreign Income 2000 2000
Grossing up with Foreign Tax 0 105
Chargeable Income 2000 2105
Tax at 35% 700 737
Credit- Double Tax Relief 0 105
Malta Tax Payable
(tax at 35% less tax credit)
700 632
Shareholder of Maltese Company
Refund on distribution
(6/7 of Malta Tax Payable)
600 632*
Effective Tax Paid in Malta 100 0
Effective Tax leakage in Malta on Net Income 5% 0%

*632 (6/7ths of 737)

Click here for a more thorough understanding of the TAX TREATMENT OF THE MALTA COMPANY

  • Tax credits for companies engaged in the repair, overhaul and maintenance of an aircraft, engines of equipment incorporated therein;
  • No withholding taxes on outbound lease and interest payments made to non-resident persons;
  • Beneficial capital allowance rules on depreciation of an aircraft;
  • No taxable fringe benefits from private use of an aircraft by non-resident individuals who are shareholders, employees or officers of companies involved in the transport of goods or passengers.

Contact one of our officers for any enquiring regarding aviation registration and security and start reaping full benefits of a reputable, low-tax EU jurisdiction. Simply fill in the contact box below or contact us by email on enquiries@fbsmalta.com or by calling at +356 2338 1500

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