The Aircraft Registration Act 2010 (hereinafter the “Act”) has contributed to the recognition of Malta as a competitive jurisdiction in the aviation sector, with a vigorous legislative framework which transposes the Cape Town Convention and the Aircraft Protocol.

The aircraft register originates from this Act, allowing for the registration of aircraft and the enforcement of aircraft mortgages, international registrants, and other interests in aircraft, along with special privileges on aircraft and ranking of secured creditors.

Novel concepts and benefits under the Maltese legislative framework on aircraft registration

The Act introduced new and original concepts relating to aviation, including the recognition of joint or fractional ownership of aircrafts and the broadening of registration possibilities for aircrafts not used for air service. In addition, through this law, irrevocable de-registration is permitted, and export power of attorney along with other special powers of attorney may be granted as security.

The Act provides registrants with more visibility of rights and interests in aircraft and seeks to encourage the development of finance and operating leases, while providing clear rules on the tax treatment of the finance charge, available tax deductions to finance lessors and capital allowances for lessees. Under the Act, tax is not withheld on lease payments where the lessor is not registered as a Malta a tax resident and competitive minimum depreciation periods for aircraft are introduced.

In addition, the private use of an aircraft by non-residents is allowed, so long as the individual is an employee or officer of an employer, company or partnership whose business activities include the ownership, leasing, or operation of aircrafts used for international transport. Such private use does not constitute a taxable fringe benefit. Moreover, by implementing the Cape Town Convention, the law grants secured lenders a higher degree of protection and more effective remedies while permitting lower borrowing costs.

Persons eligible to register an aircraft in Malta

The following individuals are eligible to register an aircraft:

  • Owners of aircrafts operating the said aircrafts;
  • Owners of aircrafts under construction or temporarily not being operated or managed;
  • Operators of an aircraft under temporary title and satisfying the conditions which may be prescribed;
  • Buyers of aircrafts under conditional sale or title reservation agreement satisfying the conditions which may be prescribed and who are authorised to operate the aircraft.

Moreover, the following persons are deemed qualified to register aircrafts used in air service:

  • The Government of Malta;
  • Citizens of Malta, a Member State of the EU or the EEA, or Switzerland, having an aircraft registered in their name and a place of residence or business in any of the said countries, and including a person sharing in the ownership of such aircraft by virtue of the community of acquests subsisting between such person and a citizen as described above;
  • Undertakings formed and existing in accordance with the laws of Malta, a Member State of the EU or the EEA or Switzerland, having its registered office, central administration and principal place of business within the said countries, whereof not less than 50% of the undertaking is owned and effectively controlled by the Government of Malta, or by any Member state of the EU or persons referred above, whether directly or indirectly through one or more intermediate undertakings.

Undertakings and natural persons who are citizens of member countries of the OECD and any other country approved by the Minister by notice, may qualify to register private aircrafts. This can be done insofar as the individual has legal capacity to own or operate an aircraft, appoints a local resident agent to represent the owner in Malta for matters concerning the registration of the aircraft, and complies with the applicable regulations and guidelines.

What securities, international interests, and special privileges are registerable?

Mortgages are a registerable security under the Act. Before their registration, creditors may register privilege or charge on any part, appurtenance, or accessory of an aircraft. Sellers who are reserving ownership rights on aircrafts or part of aircrafts can also register their interest while lessees having rights to an aircraft or part of it, may also register such rights.

Interest in airframes, aircraft engines or helicopters is granted by a charger under a security agreement and are vested either in a conditional seller under a title reservation agreement or in a lessor under a leasing agreement.

Super-priority privileges include judicial costs incurred on the sale of the aircraft and the distribution of the proceeds, following the enforcement of any mortgage or other executive title, fees and charges due to the Director General, wages due to crew for their employment on the aircraft, debt due to holders of possessory lien and expenses incurred for repair, preservation to the extent of the service performed on and value added to the aircraft, along with wages and expenses for salvage.

Taxes, duties and/or levies due to the Government of Malta, and wages and expenses for assistance or recovery are also registrable privileges which enjoy the preference and status of such right concerning the aircraft once registered in the International Registry. However, such a claim must be created by the owner of the aircraft or any person whom he authorises.

What does the aircraft registration procedure involve?

Aircraft registration can be requested by submitting the appropriate application form to TM-CAD. For the application stage to take place, such an application should be supported by the required and essential paperwork as asked by TM-CAD authorities. This form can also be used to apply for the de-registration of an aircraft or to make changes to the information in the aircraft register, such as a change of ownership or an address change. During the registration process the applicant is required to submit technical and legal documentation to substantiate the information entered in the application form.

If an applicant is a body corporate seeking to register an aircraft to be operated privately in its own name, it must provide a certified true copy of the current Memorandum and Articles of Association (M&As) of the international owner, duly certified as a true copy by a lawyer or notary public, together with an original Certificate of Good Standing issued by the competent authority or company, as of recent date, referable to the international owner;

An international owner seeking to register Maltese aircraft in his own name is required to produce to the TM-CAD, an original declaration of appointment of resident agent duly notarised and legalised by Apostille. Where such an applicant is a body corporate established outside Malta, an original legal opinion is required duly notarised and legalised by a lawyer qualified in the jurisdiction where the international owner is established, issued not earlier than 3 months. An original Certificate of Good Standing issued by the competent authority or company, as of recent date, referable to the international owner, and a Certified True Copy of the valid Memorandum and Articles of Association (M&As) of the international owner, being duly certified by a lawyer or notary public, are also necessary.

When an International Registrant from an approved jurisdiction submits an application, the applicant must choose a Resident Agent who will be based in Malta prior to the registration of an aircraft. At all times, the International Registrant must have a validly appointed Resident Agent. The Resident Agent will serve as a liaison between the International Registrant and the Director General of Civil Aviation, as well as other Maltese government departments and agencies. The appointed Resident Agent must accept such an appointment in writing.

What is unique about aircraft registration in Malta?

The Maltese national aircraft registry is renowned for its high standards in accordance with EU requirements and other international regulations. With Malta being a neutral state having both economic and political stability as well as a professional English-speaking workforce, Malta is deemed to be an efficient jurisdiction for aircraft registration. Moreover, the costs associated with company formation and aircraft registration are considered to be relatively low.

E&S Group has a vast experience in the aviation industry and can assist clients in registering an aircraft in Malta. Services include:

  • Assisting in setting up aviation companies in Malta;
  • Registering aircrafts in Malta;
  • Drafting and reviewing aviation-related agreements;
  • Assisting with applications for air operator certificates and operating licences;
  • Managing of structures for VAT and tax planning optimisation.

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