Maltese Shipping Companies

A pre-requisite for a Malta flag registration is the formation of a Maltese shipping company. Maltese ship owning companies are onshore companies. Shipping companies remain regulated by the Commercial Partnerships Ordinance, which in respect of other companies was replaced by the Companies Act in 1996. Thus, a ship owning company is governed by company law as it was previous to 1996, without the many legal requirements imposed by the Companies Act which is harmonised with EU law.

Limited liability shipping companies are formed by means of a public deed or a private writing. The minimum of subscribed capital required by law is Lm500 of which 20% must be paid up.  The objects of a shipping company must be restricted to the owning, managing and administering of Maltese ships, boats, yachts and vessels of any kind.

The principal place of business need not be located in Malta and there are no restrictions on the sale and transfer of shares or stock of a Maltese shipping company.

Company registration fees are Lm100; a fee of Lm25 is payable on the filling in of an annual return.

Taxation of Shipping Companies

Shipping companies are subject to corporate tax at the normal rate. However, under the Merchant Shipping Act, all gains or profits of a Malta company derived from the operation and ownership of a Maltese registered vessel are exempt from income tax.

This tax benefit applies to companies owning registered vessels of not less than 1,000 net tons engaged in the carriage of goods and passengers.

Moreover, the Minister of Finance may, upon application, extend such exemption to a vessel of a lesser tonnage and to ships not engaged in the carriage of goods and passengers.  This fiscal exemption may be applied for in respect of any Maltese registered ship, and is a mere formality for ships of 500 gross tons and over.

Maltese Shipping Company dividends distributed to corporate shareholders are exempt from tax.

The sale, transfer or transmission “causa mortis” of any ship, or of any shares in a ship-owning company is duty-free.

Formation Requirements

Also of interest:

Double taxation treaties