Xpert Konnect is a series brought by DCTS, introducing exclusive insights from leading lawyers, compliance professionals and industry experts across aviation, e-gaming, yachting and other corporate sectors. The aim is to share expert practical guidance to help businesses and individuals stay ahead in an evolving world.
Fenech & Fenech Advocates, one of Malta’s leading full-service law firms, shares insights from Dr Adrian Attard, Head, Marine Litigation and Ship Finance, Dr Alison Vassallo, Head, Yachting, and Dr Diane Cutajar, Associate, Ship Registration and Ship Finance, in this three-part Xpert Konnect series on Malta’s success as a leading superyacht flag. Part 1 focuses on the robustness of Malta’s regulatory framework.
PART 1 | Robustness of the flag
Malta has made steady inroads in the superyacht arena, attracting some of the world’s most prestigious yachts and influential yacht owners. Today, Malta is a recognised world leader in the registration of superyachts and the largest European flag; in June 2026, the number of commercial and private yachts over 24m in length registered under the Malta flag stood at 480 and 889 respectively.
Robust legal protections for financiers, efficient tax structuring options, a commercially minded legal framework, and streamlined importation procedures, are all reasons for the jurisdiction’s success. These are complemented by first-class marinas, refit, chandlery and agency services offered within Malta.
Malta’s reputation as a world-class maritime flag is built on a modern, robust regulatory framework that keeps pace with industry developments.
In recent years Malta has introduced a specialised Passenger Yacht Code for larger yachts carrying 13–36 passengers and has launched the fully updated Commercial Yacht Code 2025. Effective from 1 July 2025, this revised Code replaces the 2020 version and aligns the Malta flag with the latest international safety and technical standards. These developments address industry demands driven by the continued increase in yacht size and complexity, further reinforcing Malta’s reputation for high compliance, safety, and innovation in the superyacht and commercial yacht sectors.
Meanwhile, Malta’s dedicated Small Commercial Yacht Code (sCYC), applies to commercial yachts up to 24m in length, ensuring that smaller charter and commercial yachts adhere to rigorous safety and technical standards aligned with international regulations.
Malta’s yacht regulations also offer a comprehensive yet flexible framework for yachts used privately. The recently introduced non-mandatory Safety Guidelines for pleasure yachts under 24 metres provide owners of smaller private yachts with an opportunity to obtain a Pleasure Yacht Safety Certificate by meeting recommended safety criteria, a valuable endorsement that enhances safety awareness and international credibility while remaining optional for private operators.
A further key advantage of the Malta flag is its competitive tonnage tax regime. A Maltese company owning a Malta-registered commercial yacht can opt to pay an annual tonnage tax, calculated on the basis of the yacht’s tonnage, instead of corporate tax on its operating income. This regime adds significant fiscal efficiency and certainty for commercial yacht operations under the Malta flag, making Malta even more attractive for yacht owners and operators.
The advantages of registration under the Malta flag include:
- Reliability and reputation of Europe’s largest maritime flag with a globally trusted reputation, consistently aligned with the highest safety and regulatory benchmarks.
- Straightforward and quick company and yacht registration procedures now benefiting from digital vessel certificates.
- Creditor forward jurisdiction providing swift and enforceable security through the registration of mortgages over Malta flagged vessels.
- Low company formation and registration costs, with favourable tonnage tax benefits.
- Eligibility of non-Maltese companies and certain individuals to own Malta flagged yachts through the appointment of a Resident Agent.
- No restrictions on the nationality of the shareholders and directors of Maltese companies.
- No restrictions on the nationality of the Master, officers and crew carried on board Maltese yachts.
- No restrictions on the sale or transfer of shares of a Company owning a Maltese yacht.
- A dedicated 24-hour service ensuring urgent matters are handled promptly by the Malta Ships Registry.
- Seamless switching between private and commercial use, offering maximum flexibility for chartering or private use.
PART 2 | Commercially sensitive legal solutions
The benefits that may be availed of by owners seeking a jurisdiction for the regulation of their superyachts certainly do not stop with the flag.
USE AND ENJOYMENT RULES
Malta has always been at the forefront of offering solid, reliable solutions to yacht owners depending on their individual requirements and intended use of the yacht.
The revised Guidelines regarding the place of supply of the hiring of pleasure yachts, establish the manner in which the use and enjoyment of such pleasure yachts is to be treated for VAT purposes.
These Guidelines would find their application within the context of Operating Leases set up under Maltese law, which would be formulated in accordance with best practices to ensure compliance with EU interpretations and ECJ judgements.
While the general principle is that the full taxation in Malta is applicable where the place of supply of the service is determined to be Malta, the Guidelines provide for a method of adjustment based on the actual effective use and enjoyment of a pleasure yacht within and outside EU waters. The revised Guidelines establish that this is to be calculated by reference to the period of time when the pleasure yacht is used and enjoyed outside EU territorial waters.
For the purpose of applying the Guidelines, the Lessee is to provide the Lessor with documentary and/or technological data to determine the effective use and enjoyment by the Lessee of the pleasure yacht within and outside EU territorial waters during the lease period.
Special VAT rate for charters commencing in Malta
As from 1 January 2024, and subject to compliance with a number of conditions, the charter of yachts commencing from Malta would be eligible for a special VAT rate of 12%, thereby lower than the standard 18% VAT rate applicable in Malta.
Efficient importation procedures
Malta has consistently offered efficient and attractive procedures for the importation of commercial yachts that are intended to be brought into free circulation within the EU so as to enable them to carry out their chartering season in the Med.
The introduction of measures by the authorities over the years to further strengthen the existing procedures, such as the removal of the requirement of a bank guarantee for Malta yacht owning entities, has resulted in the importation of yachts into the EU via Malta increasingly featuring as the favoured option of international advisors and owners.
PART 3 | Reliable finance mechanisms
Financing is frequently a consideration in the acquisition and operation of a yacht. Malta’s well-established maritime regime and sound legal system have established the Maltese flag as a leading jurisdiction for yacht financing and leasing transactions. Over the years, Malta has developed a sophisticated legislative and regulatory framework that balances the interests of owners, financiers, lessors and other stakeholders, providing both the legal certainty and flexibility required to support a broad range of financing and asset-holding structures.
Malta’s mortgage regime is widely regarded as one of the principal strengths of the Maltese flag from a financing perspective. A mortgage registered over a Malta flagged yacht constitutes an executive title under Maltese law, enabling a mortgagee to enforce its rights efficiently and with a high degree of certainty without the need for lengthy proceedings in the event of default. This security measure enhances lender confidence, which also facilitates access to competitive financing solutions for yacht owners.
Maltese law also permits the registration of mortgages over yachts under construction, allowing financiers to register security from the build phase and maintain continuity of security upon completion and registration of the yacht. This feature is particularly attractive in the superyacht sector, where financing requirements can often arise well before delivery, particularly for larger custom builds.
Further demonstrating Malta’s commitment to innovation in maritime finance, the Finance Charter Instrument (FCI) provides a bespoke security mechanism tailored to lease-based and alternative financing structures. The FCI enables financiers and lessors to register and protect their interests arising under finance charter arrangements involving Malta-flagged yachts, creating a transparent and legally recognised form of security that complements traditional mortgage structures thereby supporting the increasingly sophisticated financing structures being employed within the yachting sector.
CONCLUSION
While yacht purchases are often driven by passion, one solid piece of advice is that it is crucial for potential or existing owners to research and seek proper advice as early on as possible in their journey. This ultimately serves clients to obtain information on all their available options, to plan in good time and to ensure that the process remains as smooth and pleasant as possible.
While admittedly the international superyacht sector has evolved and become more sophisticated supported by an extensive network of experienced and reputable service providers, the value of trusted professional guidance remains paramount. This remains true particularly for first-time owners, who stand to benefit significantly from advisors with a proven track record, deep industry knowledge and high standards of professionalism. Engaging the right advisors from the outset can help avoid costly pitfalls, many of which may be difficult, time-consuming, or expensive to rectify at a later stage.
The Döhle Malta team is ready to support yacht owners throughout their journey, providing expertise and tailored solutions across yacht registration, corporate and trust structures, compliance and ongoing administration and governance services. With our local expertise and international reach, we help clients navigate Malta’s yachting framework efficiently and with confidence.
To find out how Döhle Malta can support your yacht ownership or management requirements, get in touch with our team today to discuss your specific needs and explore the solutions available to you.