Malta has one of the largest shipping registry in the European Union and has internationally distinguished itself as a white flag state, thanks to the high standards required by Transport Malta, the authority which regulates the sector. Since the Maltese flag is one of the top flags in the world, this has ensured that the flag of Malta would not become a flag of convenience, and as a result, has helped gain the trust of foreign investors within the Maltese shipping industry. Furthermore, Transport Malta fees are amongst the lowest in the European Union, while the country’s tax system provides considerable fiscal benefits to operators and ship managers. In fact, contrary to what happens in other countries where VAT is applied to the purchase of a yacht, in Malta, VAT is reduced to between 4% – 16%, depending on the size and the weight of the yacht at the time of registration, as yachts can be registered while still under construction. This percentage rate excludes those boats that are only allowed to sail in protected waters.

Malta is an attractive base for the registration of commercial and pleasure yachts, as well as super yachts. There are already over 300 super yacht owners who have chosen Malta as a base for their yachts in order to take advantage of the location of the country and the cost-effective services provided by marinas and ancillary companies, as well as the regime for boat ownership which offers a number of specific incentives to boat owners, as can be seen in the table below.

VAT incentives for sailing boats and motor boats

Type of Yacht Length of Yacht % of lease subject to VAT VAT reduction VAT rate
Sailing boat Up to 10 metres 60% 40% 10.8%
Sailing boat Between 10.01 and 20 metres 50% 50% 9%
Sailing boat Between 20.01 and 24 metres 40% 60% 7.2%
Sailing boat Longer than 24 metres 70% 30% 5.4%
Motor boat Between 7.51 and 12 metres

(if registered in the commercial register)

60% 40% 10.8%
Motor boat Between 12.01 and 16 metres 50% 50% 9%
Motor boat Between 16.01 and 24 metres 40% 60% 7.2%
Motor boat Longer than 24 metres 30% 70% 5.4%
Motor yacht Up to 7.51 metres

(if registered in the commercial register)

90% 10% 16.2%
Boats allowed to sail in protected waters Any length 100% 0% 18%

How to register a yacht in Malta

When registering any type of yacht in Malta, you have to state the purpose of its use such as whether the yacht will be used for private use, for rental purposes, partly private and partly for rental, or strictly rental so as that the relevant authorities will be aware of the full picture when applying for a reduced VAT. This is due to the fact that Maltese companies that purchase yachts are allowed to enter into a lease-sale agreement of their asset with a third party. Moreover, it is also important to state the frequency of use and the months during which the yacht will be sailed.

Legal Assistance

Our in-house legal team assist our customers throughout the registration process with Transport Malta. As a ship owner or manager, we can help you benefit from the highly affordable registration costs and fees of service charged in Malta, which would result in substantial savings to you or your company.