Tax Efficient

Aviation Registration & Services

Financing & Leasing

Aircraft Management Companies

Fractional Ownership

Short Depreciation Periods

Aviation, highlighted by the Maltese Government as a growth industry is actively encouraged with the provision of very attractive fiscal benefits.

As a highlighted industry, Malta has undergone some significant changes in order to encourage the aviation industry:

  • The Aircraft Registration Act, 2010 has opened up and increased flexibility in the registration and use of  financing for aircraft,
  • Acceding to the Cape Town Convention of International Interests in Mobile Equipment & Aircraft Protocol – the international standard – ensures added security to creditors; allowing  ‘self help’ remedies without recourse to courts; possibility of ‘Cape Town discounts’ on interests rates for financiers,
  • As a member of the EU, Malta issues commercial operators with EU-OPS 1 certification (aircraft) and JAR-OPS 3 (helicopters); providing 24/7 registration

Added to which, aircraft and air operating companies can enjoy significant fiscal and taxation benefits, which include:

  • No withholding taxes on lease payments made by Maltese lessees to non-residents in respect of aircraft operated in the international transport of passengers or goods
  • No withholding taxes on interest payments made by the Maltese lessees to non-resident financial lessors
  • Competitive depreciation allowances for aircraft and engines
  • Tax credits for companies engaged in the repair, overhaul or maintenance of aircraft, engines or equipment incorporated therein
  • Tax refunds to shareholders on distribution of profits
  • Extensive double tax treaty network
  • No taxable fringe benefits arising from the private use of aircraft by non-resident individuals who are shareholders, employees or officers of companies involved in the international transport of goods or passengers.

For more information as to Malta’s tax and fiscal benefits for the aviation industry, please go here.

Eligibility to Register Aircraft
Persons, trusts or undertakings that may register aircraft:

Commercial Registrations

  • Government of Malta,
  • Owners operating or owing aircraft, under construction, or temporarily not in operation or managed,
  • Operators of aircraft, under a temporary title (i.e. lessee),
  • Buyers under conditional sale or title reservation or similar agreement, satisfying certain conditions & has operation authorisation,
  • Trustees of qualifying beneficiaries.

Private Registrations
No EU restrictions: individuals, citizens of a recognised undertaking established in a OECD member country, or   another country approved by the Government of Malta, if such individual: (i) can legally own or operate an aircraft; (ii) appoints a Malta resident agent to represent the owner’s registration interests in Malta; and (iii) complies with applicable regulations.

Security Registration – National Aircraft Register
Malta has introduced flexible rules so as to allow as many owners & operators as possible to register aircraft with the Malta aircraft registry:

  • Citizens of EU member states, EEA or Switzerland having a place of business or residence therein
  • Companies or other undertakings in a form recognised by Maltese law (comparable to UK Companies Act), having its registered office, central administration & principal place of business within EU, EEA or Switzerland.

A non qualifying natural person who is a citizen of, or a   company or undertaking established in an approved jurisdiction, can register an aircraft under construction, or not used to provide air service.

Fractional Ownership
An aircraft’s title may be split between co-owners in fractions or percentages; each fraction can be financed and secured by different creditors.

Each fractional ownership interest may be:

  • Noted in the National Aircraft Register – certifications are issued by the Director General of Civil Aviation,
  • Treated as separate international interests via the Cape Town Convention – each interest capable of being separately registered in the International Registry.

Fractional interests are also recognised under the Cape Town Convention; each fractional interest may be registered in the International Registry.

Security of Creditors’ Interests
Under Maltese law, mortgages are used as security over   aircraft for creditor’s interests in respect of loans or debts.  Mortgages can be executed in favour of a security trustee who would be entitled to exercise all rights in relation to the mortgage.  As such a pool of financiers may appoint one of themselves (or another) to expedite or oversee  matters relating to the mortgage.

Owners’ Priority. In bankruptcy or insolvency matters, all  owner claims have security preference over all other creditors.  Security over an aircraft and the engine (whether attached or not) is separated in so far as the assets are the property of different owners. Self help is available in the even of a mortgage default, without requirement of the Courts. Subject to giving notice to the debtor, the owner may  sell, take possession in full or share portion, maintain registration, lease, and / or receive payments and income, of the aircraft.

Acumum’s Aviation Department can provide you with a variety of services:

  • Tax-structuring and optimisation of operators’ business
  • Registration, transfer and deletion of aircraft
  • Registration, amendment, transfer and discharge of national and/or international security rights in respect of Malta-registered aircraft
  • Chartering and leasing agreements
  • Purchase and sale transactions
  • Servicing, maintenance and repair agreements.
  • Searches of the Malta national aviation register
  • Searches of Maltese aircraft-owning entities
  • Co-ordination of aircraft financing transactions, preparation and review of loan agreements, security agreements, statutory mortgages over aircraft body and engines, collateral deeds of covenants, issuing of legal opinions
  • Structuring and implementation of aircraft re-finance transactions
  • Co-ordination of all technical requirements for the operation of commercial aircraft with industry experts
  • Enforcement of claims against Malta-registered aircraft and their engines, and aircraft situated in Malta

For more information about the services that Acumum offers, please contact us.