Malta: Law of Offshore

Malta Table of Statutes

This is a non-exhaustive list of the main statutes affecting offshore and non-resident business. The statutes are listed in alphabetical order – click on the statute for a fuller description of the statute, the legal regime it forms part of, or in some cases the text of the law.

Business Promotion Act 2003
Collective Investment Funds Law 1988
Companies Act 1995
Exchange Control Act 1972
Financial Services Centre Act 1988
Freeports Act
Immigration Act 1970
Income Tax Act
Industrial Development Act
Investment Services Act 1994
Offshore Trusts Act 1988
Prevention of Financial Markets Abuse Act, 2005
Professional Secrecy Act 1994
Recognition of Trusts Act 1994
Trusts And Trustees Act 2004
Trusts Income Tax Regulations 2005
Venture Capital Fund (Tax Credit) Regulations 2006

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Malta Trust Law

The Offshore Trusts Act 1988 was amended by The Trusts and Trustees Act 2004, which became effective in January 2005, and allows Maltese residents and firms to use local trusts, while also furthering Malta's international obligations on non-discrimination, transparency and the prevention of money laundering.

The government believes that the legislation, which creates a more streamlined and simplified trust regime, will make Malta much more attractive to both international and domestic clients, by offering greater flexibility and certainty. The new Act eliminates the nominee company regime, and introduces a licensing regime for professional trustees.

Until 2005, trusts in Malta were based on the Offshore Trusts Act 1988, which was largely based on Jermal trust law, itself a common law implant stemming from English trust law. Trusts under this Act must have non-resident settlor and beneficiaries, and trust assets must not include Maltese real estate.

The Recognition of Trusts Act 1994 gave effect to the Hague Convention, and results in a division of trusts into:

All trusts, including foreign ones, must register with the Maltese Financial Services Centre (MFSC), which costs EUR250 for application and processing and EUR100 upon approval. Foreign trusts which do not register with the MFSC will not benefit from the tax advantages of registered foreign trusts (they are tax-exempt). Under the 2004 Act, transfers of assets into a trust or a change of beneficiaries may give rise to a charge to tax.

Under the 2004 Act, a registered trust must have a Maltese Professional Trustee as one of its trustees, which files an annual declaration of conformity with the law; no accounts or tax returns need be filed.

Some of the main features of Maltese trust law are as follows:

Unit Trusts

There are no special provision in Maltese law covering Unit Trusts, which are therefore treated in the same way as ordinary Maltese trusts, and have the same tax regime.

Confidentiality

Maltese trust law establishes the confidentiality of trust documents and dealings and the actions of the trustee. The Professional Secrecy Act 1994 imposes strict confidentiality rules on all professionals, officials and other individuals who recieve privileged information in the course of their duties; the sanctions are heavy fines and imprisonment.

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Malta Ship Management and Maritime Operations

The original Maltese Merchant Shipping Act 1973 based on English law has been adapted and modernised in 1986, 1988 and 1990; and further improvements are planned. The Merchant Shipping Directorate of the Malta Maritime Authority supervises the sector and has developed a world-wide network of surveyors and inspectors. Malta is a member of the International Maritime Organisation and has adopted almost all the major international maritime conventions, including:

CLC69, Tonnage 69, COLREG 72, FUND 71, INMARSAT, Load Lines 66, London 72, MARPOL 73/78, SOLAS 74/78 and STCW 78.

The Maltese registry accepts all types of vessel, from pleasure yachts to oil rigs, provided they are owned by citizens of Malta or a company registered in Malta. Provisional registration is given quickly, allowing six months (can be extended to 12) for formalities to be completed. The documents required for provisional registration are:

Initial Registration fees are on a sliding scale from EUR575 for up to 2,500 tons with an annual registration fee of EUR875, a fee of EUR0.23 per ton is payable from 2,500 tons to 8,000 tons. Above 8,000 tons, the fee for tonnage above the minimum drops to EUR0.07 and the initial registration fee increases to EUR1,840 for 8,001 to 10,000 ton vessels, EUR1,980 for 10,001 to 15,000 ton vessel, EUR2,330 for 15,001 to 20,000 ton vessels, EUR2,680 for 20,001 to 30,000 ton vessels, EUR3,380 for 30,001 to 50,000 ton vessels and EUR4,780 for vessels above 50,000 tons.

Annual fees are EUR875 and EUR0,35 per ton in excess of 2,500 tons and up to 8,000 tons, EUR2,800 for 8,000 to 10,000 ton vessels with EUR0.19 per ton in excess of 8,000 tons, EUR3,180 for 10,000 to 15,000 ton vessels plus EUR0.14 per ton in excess of 10,000 tons, EUR3,880 for 15,000 to 20,000 ton vessels plus EUR0.12 per ton in excess of 15,000 tons, EUR4,480 for 20,000 to 30,000 ton vessels plus EUR0.09 per ton in excess of 20,000 tons, EUR5,380 for 30,000 to 50,000 ton vessels plus EUR0.07 per ton in excess of 30,000 tons and EUR6,780 for vessels above 50,000 tons plus EUR0.05 per ton in excess of 50,000 tons.

Permanent registration requires a considerable amount of documentation, essentially similar to that required by all registries.

Bareboat charter registration is allowed both of foreign ships under the Maltese flag and of Maltese ships under a foreign flag. There are no restrictions on the nationality of crew in Maltese law, and no age limit for ships, although ships older than 20 years must pass an inspection before or within one month of provisional registration; ships older than 25 years must pass an inspection before provisional registration.

The shipping laws are flexible with regard to sale or mortgaging of ships. Following provisional registration, mortgages can be registered, transferred or discharged with the Maltese Registrar. A registered mortgage can be enforced under Maltese law without the need for a judgement. A Maltese registry can be closed at the owner's request provided that liabilities towards Malta have been fulfilled, and with the consent of all registered mortgagees.

Masters and Officers must be certified by recognised authorities; crew lists must be provided giving rank, seamen book numbers and nationality. There must be a Crew Agreement between the Master and the seamen, witnessed by a shipping master; it is submitted to the Registrar. Maltese local minimum wage agreements apply to seamen and officers.

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