Insights

A yacht in Malta may be registered as a pleasure yacht or as a commercial yacht. There are now more than 230 commercial yachts, with an average length of 31 metres, registered under the Malta flag.

The registration and operation of Maltese commercial yachts is principally regulated by the Merchant Shipping Act (Chapter 234 of the Laws of Malta), subsidiary legislation enacted thereunder and a code of practice known as the Commercial Yacht Code (the “Code”). The Code originally published in 2006 has since been amended. The present version is now the Code as published in 2015.

A yacht owner wishing to register and operate a Maltese commercial yacht must comply with the requirements contained in this Code as administered by the Merchant Shipping Directorate within Transport Malta.

The Code imposes those standards of safety, pollution prevention and crew welfare which are appropriate for the type and size of yacht being registered. The requirements imposed by the Code were developed whilst considering the relevant IMO Conventions, EU Directives and industry standards.

The Code also lays down the key elements and qualifying criteria for commercial yacht registration in Malta, which include:

• A minimum overall length of 15 metres
• No tonnage limitations
• Commercial use for sport or pleasure which does not carry cargo and which does not carry more than 12 passengers
• Applies to motor and sailing yachts
• Any type of yacht may be registered as a commercial yacht including historical, training and racing yachts
• May operate worldwide subject to navigational notations granted by the Malta flag authorities based on the type and size of yacht in question
• Initial survey must be carried out by an authorised surveyor or recognised organisation
• Once compliant, the yacht is granted a “Certificate of Compliance to Trade as a Commercial Yacht” valid for 5 years subject to an intermediate survey for yachts below 24 metres in length and an annual survey for yachts above 24 metres in length
• Yachts of 500 GT and above must be classed by a recognised organisation and maintain class throughout the period of commercial yacht registration
• No nationality restrictions for master, officers and crew
• Save for the compliance requirement with the Commercial Yacht Code, the same procedure for registering any other vessel under the Merchant Shipping Act applies to the registration of a commercial yacht

Under Maltese law, yachts may be owned by:

• either EU, EEA and Swiss residents residing in Malta and corporate bodies established in Malta; or
• EU, EEA and Swiss residents not residing in Malta or foreign corporate bodies through the appointment of a local resident agent.

In addition to the qualifying criteria outlined above, the Code addresses a number of matters which warrant particular attention and which provide for an overall flexible regime.

One example of this flexibility, is the recently addeed facility granted to an owner of a Maltese commercial yacht wishing to change the yacht’s certification from commercial to pleasure. This is aimed towards those occasions when a yacht is in use but is not being chartered– therefore, it is being privately used. When such change is done often and within short periods of time, the commercial yacht certificates may be retained on board and re-used when the yacht is operated commercially.

The Code also allows for a fast track procedure for LY2, LY3 and Codice del Noleggio certified yachts transferring to the Malta flag. Such yachts will be issued with an operational commercial certificate upon initial application and are thereafter given 3 months to complete any necessary surveys and formalities.

Traditional and historical yachts are also dealt with. Owing to their very nature, such yachts may be unable to comply with all of the requirements stipulated in the Code. Consequently, the Maltese registry has been willing to make equivalent and tailor made arrangements on a case by case basis whilst respecting the historical design and character of such yachts.

The Code further offers flexibility to owners and operators of commercial yachts wishing to participate in races. In fact, commercial yachts need not be fully compliant with the Code during races and during transit passages to and from the race location, provided the Registry is informed beforehand and all persons on board are covered by a valid insurance policy whilst racing and during the transit passages. Owners that would like to register their non-commercial yachts as ‘racing yachts’ may also do so on a case by case basis.

Maltese law provides for a comparatively simple regime for the registration of yachts designated as ‘pleasure yachts’ – yachts that are intended solely for private use. There is substantial flexibility in the applicable regime, particularly for pleasure yachts of a smaller size.