Number #1

Registrar in Europe

Leading Provider

Of aircraft registrations
  • Telephone: +357-22030536 | Fax: +357-22030543

Number #1

Registrar in Europe

Leading Provider

Of aircraft registrations

Malta Registry

Aviation – Aircraft Registry – A new Aircraft Register for Malta

Aircraft Registration Act, 2010

The “Aircraft Registration Act, 2010” has entered into force with effect from Friday 1st October 2010 pursuant to legal Notice 446 of 2010.   Malta has acceded to the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol.

The Act regulates:

    • the registration of aircraft and aircraft mortgages;
    • the aircraft register;
    • the recordation and enforcement of aircraft mortgages and other interests in aircraft;
    • the special privileges on aircraft;
    • the ranking of secured creditors;
    • the implementation of the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol and its interface with domestic law.

Novel Concepts

    • Recognition of fractional ownership of aircraft;
    • Widening of registration possibilities for aircraft not used for air-service;
    • Permitted registration of irrevocable de-registration and export power of attorney;
    • And other special power of attorney granted as security.

Advantages under the new and other related legislation:

    • More visibility of rights and interest in aircraft;
    • Encourages the development of finance and operating leases of aircraft and provides clear rules on the tax treatment of the finance charge, available tax deductions to finance lessors and capital allowances for lessee;
    • Boarder registration possibilities;
    • No withholding tax on lease payments where the lessor in not a tax resident of Malta;
    • Competitive minimum depreciation periods for aircraft;
    • The private use of an aircraft by an individual who is not resident in Malta and is an employee/officer of an employer/company/partnership whose business activities include the ownership/leasing/operation of aircraft used for international transport does not constitute a taxable fringe benefit;
    • Implements the provisions of the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol thereby granting secured lenders a higher degree of protection and more effective remedies whilst allowing lower borrowing costs.

Who may register aircraft

    • An owner of the aircraft who operates the said aircraft;
    • An owner of an aircraft under construction or temporarily not being operated or managed;
    • An operator of an aircraft under a temporarily title who satisfies the conditions as may be prescribed;
    • A buyer of an aircraft under a conditional sale or title reservation agreement which satisfies the conditions which may be prescribed and who is authorised to operate the aircraft;
    • Who may register aircraft, Aircraft Registration Act, 2010 Mandatory entries in the register;
    • The physical details of the aircraft and the engines attached to the aircraft and any replacement engines owned by the registrant to the extent they are designated for use on the aircraft;
    • The name and address of the registrant in what capacity the registrant has registered the aircraft;
    • The details of any mortgages registered over the aircraft and subsequently all registrable transactions related to the mortgage;
    • The details of any irrevocable de-registration power of attorney, or other power of attorney granted to an owner or to a lessor of an aircraft or granted by way of security to the mortgagee, or to a third party, granting powers relating to the exercise of rights to the aircraft, or to the closure of the register on behalf of the registrant.

Persons eligible to register in Malta:

    • The Government of Malta;
    • Citizen of Malta or a citizen of a Member State of the EU, or an EEA State, or Switzerland, having a place of residence or business within Malta, the EU, the EEA or Switzerland, including a person sharing in the ownership of such aircraft by virtue;
    • Of the community of acquests subsisting between such person and a citizen as described above in whose name the aircraft is registered;
    • An undertaking formed and existing in accordance with the laws of Malta, a Member State of the EU, or an EEA State, or Switzerland, and having its registered office, central administration and principle place of business within Malta or the EU, or an EEA State, or Switzerland, whereof not less than 50% of the undertaking is owned and effectively controlled by the Government of Malta, or by any Member State of the EU, or by any persons referred to above, whether directly or indirectly through one or more intermediate undertakings.

For private aircraft:

    • A natural person who is citizen of, or an undertaking established in a member country of the Organisation for Economic Co-operation and Development and any other country approved by the Minister by Notice for the purpose of the Act (termed “International Registrant” in the Act), provided it-
      • has legal capacity to own/operate an aircraft in terms of law;
      • appoints a local resident agent to represent the owner in Malta for matters concerning the registration of the aircraft;
      • complies with applicable regulations/guidelines.

Information entered into the National Aircraft Register:

Mandatory entries in the register

    • The physical details of the aircraft and the engines attached to the aircraft and any replacement engines owned by the registrant to the extent they are designated for use on the aircraft;
    • The name and address of the registrant in what capacity the registrant has registered the aircraft;
    • The details of any mortgages registered over the aircraft and subsequently all the registrable transactions related to the mortgages;
    • The details of any irrevocable de-registration power of attorney, or other power of attorney granted to an owner or to a lessor of an aircraft or granted by way of security to the mortgagee, or to a third party, granting powers relating to the exercise of rights relating to the aircraft, or to the closure of the register on behalf of the registrant.

Permitted entries in the register

    • The ownership rights in the aircraft or an engine including when held by a trustee, by one or more owners, divided into fractional shares, or held under an agreement with reservation of ownership rights or under conditions effecting title;
    • The lessee / lessor rights in relation to the aircraft or an engine;
    • The details of the resident agent where the registrant is an international registrant;
    • Information on any international interest registered in the International Registry, and debtor thereof;
    • Any charge or reservation of ownership rights or lessee rights prior to the registration of a mortgage.

Security registrable in the National Aircraft Register:

    • A mortgage;
    • Prior to the registration of a mortgage:-
      • Any creditor may register his privilege or charge on any part, appurtenance or accessory of any aircraft;
      • A seller reserving ownership rights on an aircraft or on any part thereof, may register his interest in the register of the aircraft;
      • A lessee having rights to an aircraft or any part thereof.

Eligibility to register aircraft

Qualified persons may register aircraft in Malta in any of the following capacities:-

  • As owner of the aircraft who operates the said aircraft;
  • As owner of an aircraft under construction or temporary not being operated or managed;
  • As operator of an aircraft under a temporary title who satisfies the conditions as may be prescribed;
  • As buyer of an aircraft under a conditional sale or title reservation agreement which satisfies the conditions which may be prescribed and who is authorised to operate the aircraft.

Qualifying Registrants

The following persons are qualified to register aircraft in Malta:

Aircraft used in services (commercial)

  • The Government of Malta
  • A citizen of Malta or a citizen of a Member State of the E.U. or of an EEA State, or Switzerland, having a place of residence or business in Malta, the E.U., the EEA, or Switzerland.
  • An undertaking formed and existing in accordance with the laws of Malta, of a member state of the E.U.. of an EEA State, or of Switzerland, and having its registered office, central administration and principle place of business within Malta, the E.U.. or the  EEA State, or Switzerland, whereof not less than 50% of the undertaking is owned and effectively controlled by the Government of Malta, or any Member State of the E.U. or by persons referred to above, whether directly or indirectly through one or more intermediate undertakings;
  • Trustees for such interests (the beneficiaries of the relevant trust would be considered to determine eligibility to register).

      All operators of aircraft engaged in commercial air transport activity are required to be in possession an Air Operator Certificate (AOC) and an Operating Licence.  The Civil Aviation Directorate at the Authority for Transport in Malta has the capacity to certify operators of aircraft in accordance with Annex III to Regulation (EC) 3922/1991, as amended (EU-OPS 1).

Private aircraft

A natural person who is citizen of, or an undertaking established in a member country of the OECD and any other country approved by the Minister by notice, provide it_

  • Has legal capacity to own / operate an aircraft in terms of law;
  • Appoints a local resident agent to represent the owner in Malta for matters concerning the registration of the aircraft;
  • Complies with applicable regulations/ guidelines.

Registration facilities

Registration of aircraft under construction

It is possible to register aircraft in the Maltese aircraft register whilst under construction or temporarly not being operated or managed.  The requirements related to, inter alia, the airworthiness of the aircraft in such cases, would be suspended until completion of the aircraft.

Fractional Ownership

It is not uncommon for the title to an aircraft to be split among co-owners in specified fractions or percentages.  Each fractional interest may be financed by a different creditor which takes security over the particular fractional interest it has financed.  Each ownership interest may now be annotated in the national aircraft register and in certificates issued by the Director General of Civil Aviation.

Fractional interests in aircraft may also be treated as separate international interests under the Cape Town Convention, and each fractional interest in an aircraft or aircraft object is separately registrable in the International Registry.

Annotation of ownership interest

Every person who holds an interest by way of ownership or title in the aircraft or share therein may make a request in writing to the Director General to have his mane, address and interests or title noted in the Certificate of Registration.

Security registered in the National Aircraft Register

Under Maltese law, aircraft constitute a particular class of movables forming separate and distinct assets within the estates of the owners for the security of actions and claims to which the aircraft may be subject.  In the case of bankruptcy and / or insolvency of the owner of an aircraft, all actions and claims to which the aircraft may be subject, shall have preference on the aircraft, over all other debts of the estate.

Any security over aircraft shall not extend to any engine attached to the airframe, which is not owned by the airframe owner.  Each of the owners retain ownership of their asste and the engine shall not, for the purpose of Maltese law, accede to the airframe .

The Director General of Civil Aviation registers aircraft mortgages in the Register pursuant to an instrument creating a mortgage.  A registered mortgage will entitle the mortgagee, in the event of default of the mortgagor, to the following self help remedies without the need of the leave of any court, and upon giving notice in writing to the debtor:

  • To take possession of the aircraft or share therein in respect of which the mortgagee is registered;
  • Sell the aircraft;
  • Apply for any extensions, pay fees, receive certificates and generally to do all such things in the name of the owner or registrant as may be required in order to maintain the status and validity of the registration of the aircraft;
  • Lease the aircraft so as to generate income therefrom;
  • Receive any payment of the price, lease payments, and any other income which may be generated from the management of the aircraft;

Mortgagees, by virtue of the legislative amendments, have been granted more extensive powers in respect of the cancellation of the register of an aircraft and have the option to register any power of attorney granted in their favour as creditor granted by way of security for the de-registration and export of the aircraft.

International interests registered in the International Registry.

As a consequence of Malta’s accession to the Convention, interests in airframes, aircraft engineers or helicopters which are granted by a chargor under a security agreement, or vested in a person who is the conditional seller or in the lessor of an aircraft, may be registered in the International Registry and shall be regulated by the provisions of the National Implementing Law un the Act.  The Implementing Law was specifically drafted as a model law by the aviation Working Group.

Subject to special privileges and Malta’s Declarations pursuant to the Convention, the general rule is that and international interest ranks prior to national security interests.  International security interests registered in the International Register shall have full effect in Malta, and one shall therefore not be required to register any security also in the National Aircraft register.  The creditor may, however, request that the international security interest be all the same entered in the National Aircraft Register – subject to the general rule that the international security interest shall be operative in its own merits and shall always prevail over the National Aircraft Register in case of any conflict or discrepancy.  Furthermore, there is also an option, once an international interest has been registered in the International Register, to file a prohibitory notice in the National Aircraft Register prohibiting the registration of security interests in the national register without the express consent of the creditor in question.

 

Special privileges over aircraft

Special privileges, over aircraft has been narrowed down under the Act compared to the previous situation.  The debts listed below enjoy super priority and any debts secured by a Maltese mortgage or charge in the International Registry, shall rank after such debts.  The super priority special privileges are_

  • Judicial costs incurred in respect of the sale of the aircraft and the distribution of the proceeds thereof pursuant to the enforcement of any mortgage or other executive title;
  • Fees and other charges due to the Director General arising under applicable law of Malta in respect of aircraft;
  • Wages due to crew in respect of their employment on the aircraft;
  • Any debt due to the holder of a possessory lien for the repair, preservation of the aircraft to the extent of the service performed on and value added to the aircraft;
  • The expenses incurred for the repair, preservation of the aircraft to the extent of the service performed on and value added to the aircraft;
  • Wages and expenses for salvage in respect of the aircraft.

 

The Act also provides for registrable privileges which once registered in the International Registry enjoy preference and status of such right in relation to the aircraft only if claim is created by the owner or the aircraft or a person authorised by him.  This category of privileges comprises –

  • Taxes, duties and/or levies due to the Government of Malta in respect of the aircraft and
  • Wages and expenses for assistance or recovery in respect of the aircraft.

 

Increased rights and remedies

In implementing the Cape Town Convention, the Act offers increased predictability of rights and remedies in aircraft transactions and provides added protection to holders of security interests  in aircraft in an event of default.  Upon the insolvency of the debtor (in those cases where Malta is the primary insolvency jurisdiction) the insolvency administrator or the debtor is required to:

  • Give possession of their aircraft to the creditor by the end of a waiting period of 30 days, or
  • Cure all defaults and agree to perform all future obligations under the relevant agreement.

Tax issues

Malta’s taxation system has transitioned from a typical offshore regime in 1980’s to a tax regime which is fully integrated into that of the EU and which passed all tests of probity.  When Malta joined the EU in 2004, Malta’s taxation system was thoroughly scrutinised and important amendments were made.

The cornerstone of Malta’s tax system – the imputation system of taxation of dividends whereby shareholders are credited with the tax suffered by the company on the distributed profits – was maintained.  However, tax refunds to shareholders upon distribution of dividends by companies are now also available in respect of income distributed from Maltese Taxed Account (previously refunds were available only in respect of profits allocated to the Foreign Income Account and profits distributed by International Trading Companies) are now available without discrimination to all shareholders (previously only non-resident shareholders were entitled to refunds).

Together with the enactment of the Aircraft Registration Act, a new tax aviation package was also published.  The aviation tax package signals the Maltese government’s commitments to the aviation industry in Malta, in the belief that such industry will be a success story in the same way as that of the insurance business, the fund industry and other niche sectors.

Highlights of the aviation tax package are:

  • No withholding taxes on lease/royalty 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.

 

All Maltese companies and branches of foreign entities are governed by the same corporate taxation rules, whatever line of aviation business the undertaking is involved in.

Corporate Feature

Maltese law provides for the re-domiciliation of companies to Malta from other compatible jurisdictions thus ensuring the continuing corporate existence of the migration entity.  Accordingly, the company retains all the assets, rights, liabilities and obligations previously held or due by it enabling such undertakings to avoid dissolution or winding-up thus avoiding the consequent termination and re-establishment of contracts and agreements in their aircraft structures and transactions.

Conclusion

Malta offers a wide range of aviation related services ranging from aircraft registration to aircraft and engine maintenance, repair and overhaul to software development, aircraft management, aircraft maintenance training and ancillary support services.  It is home to well established aircraft maintenance organisations and is fast becoming a favourable location for other related services supporting the aviation industry.

Click here to complete our registration form.

Top