Whilst it is safe to say that the process of registering of a Commercial Vessel under the Maltese flag is very similar to that which would need to be followed for the registration of private pleasure vessels in Malta, there are in place a number of requirements which shall be met, for the Merchant Shipping Directorate to give its green light and approve the commercial registration of a vessel.
In this regard, Maltese law clearly states that a Maltese ship may operate as a commercial yacht or in a similar type of operation for the carriage of persons, provided that such ship is properly certified as being in compliant with the Safety and Load Line Conventions, or with any other applicable laws and regulations.
Registration Requirements
Size of the Vessel
When it comes to the registration of vessels as commercial, the Merchant Shipping Directorate prohibits the registration of vessels having less than 15 meters in length, and differentiates between three different classes of vessels, namely:
- Yachts of not less than 15 meters in length and not more than 24 meters;
- Superyachts of more than 24 meters in length but not more than 500 gross tonnes;
- Superyachts in commercial use, of not more than 24 meters in length and 500 gross tonnes and over but less than 3000 gross tonnes.
Applicants
Similar to the registration of pleasure vessels under the Maltese flag, all Maltese and European Union Citizens, as well as all body corporates established in Malta may register a vessel as commercial under the Maltese flag.
It should however be noted that non-resident owners, i.e.: EU Citizens, Swiss citizens, or residents of the EEA, who are not resident in Malta and/or foreign entities enjoying legal personality would need to appoint a resident agent before they can proceed with registering a vessel as commercial in Malta.
Documents
Before a vessel can be registered as a commercial vessel under the Maltese flag, the below documents would need to be submitted to the Merchant Shipping Directorate, amongst others:
- application for registration by the owner;
- copy of the yacht's international tonnage certificate {where applicable);
- application for radio station license;
- builder's certificate;
- certificate of survey;
- bill of sale of any other document showing the transfer of ownership;
- evidence that the yacht has been made in accordance with the law;
amongst others.
The Merchant Shipping Directorate shall have a right to request additional documents and information as deemed necessary and on a case by case basis.
Registration Process
The registration process of commercial vessels is very similar to that of private vessels with a few exceptions.
Commercial vessels will first be provisionally registered for a term of 6 months. Following the lapse of the said term, and on submission of all the necessary documents by the owner to the Merchant Shipping Directorate, the vessel will be permanently registered as a Commercial Vessel under the Maltese flag.
Commercial vessels, unlike private vessels, would need to undergo a pre-registration survey in order to acquire the Certificate of Compliance to Trade as Commercial Yacht.
A surveyor or a Classification Society recognized by Transport Malta would need to be engaged in order to carry out an inspection onboard of the vessel, during which, the surveyor would inspect the Radio and the Global Maritime Distress and Safety System (GMDSS) equipment.
The Emergency position-indicating radiobeacon (EPIRB(s)) and the automatic identification system (AIS) of the vessel (if applicable) will also be tested, and the appointed surveyor would also need to confirm that the vessel is also compliant with the Maritime Labour Convention and with any other applicable laws and regulations.
In this regard, the owner of the vessel will have a duty to provide the surveyor with any and all requested documents in order to sufficiently demonstrate that the vessel is in conformity with all applicable requirements and regulations.
Once the inspection is completed, a survey report will be compiled by the appointed surveyor. This will be submitted to Transport Malta for review and if the Merchant Shipping Directorate is satisfied that all is in order, it will proceed with the issuance of the Certificate of Compliance to Trade as Commercial Yacht.
The said certificate of compliance will therefore attest that the vessel complies with the technical, safety, pollution prevention, and manning standards and that it has met all the necessary requirements.
This certificate is renewable every 5 years, and additional surveys would need to be carried out by an appointed ship surveyor or by a recognised organisation every 5 years.
Commercial Yacht Code
The Commercial Yacht Code (CYC) is meant to regulate the commercial yacht industry, by determining standards with which all commercial yacht owners are expected to abide.
It has been drawn up by the Merchant Shipping Directorate in line with applicable laws, regulations, and international standards and sets out the requirements in connection with crew welfare, minimum safety standards, protection of personnel and crew, navigation, and communication, manning, and crew certification, prevention of pollution whilst at sea, amongst others.
Commercial yacht registration in Malta, has during the past ten years, seen a considerable increase, and a need was felt to update the third edition of the Commercial Yacht Code which was published in 2015.
Following a consultation with several stakeholders including surveyors, manufacturers, yacht management companies, yacht builders, yacht repair yards, amongst others, the fourth edition of the Commercial Yacht Code was published.
This became effective from the 1st of January 2021 and is applicable to all commercial vessels. Existing vessels which were already certified in accordance with the third edition of the CYC, had until the 1st of June 2021 to ensure conformity with the new amendments of the Code.
Pros and Cons
It should be noted that Commercial Yachts shall not be allowed to:
- carry cargo; and
- carry more than 12 passengers.
Furthermore, all yachts below 24 meters in length would need to undergo an immediate survey, whilst vessels which are larger or equal to 24 meters in length, would need to undergo annual surveys.
Having said that, the Maltese flag offers numerous advantages to ship owners who intend on registering their vessels as commercial in Malta some of which include:
- the implementation of the 'Tonnage Tax System' from which commercial yachts may benefit. This will allow commercial yacht owners to save significant amounts when it comes to the operational cost of the vessel;
- several VAT and TAX incentives;
- no restrictions when it comes to the nationality of the directors or the shareholders of Maltese companies;
- no restrictions when it comes to the nationality of crew members working on board Maltese flagged yachts;
amongst others.
How Can We Help?
- Resident Agent Services
- Commercial Yacht Registration
- Vessel and sale purchase;
- Offer guidance as to the formalities and the requirements which would need to be adhered to;
- Preparation of the necessary forms and documents;
- Company Incorporation;
- Liaison with surveyors;
- Ensuring that any and all required deadlines are met;
- Application for radio licence;
- Drafting of Agreements in relation to the employment of crew members, chartering of vessels amongst others.
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.
