Yacht financing in Malta is an option for individuals who want to own their own luxury yacht but do not want to pay the full price in cash outright. Due to the risks associated with yacht financing, yacht financing in Malta can be challenging, but it can also provide several benefits to yacht owners.
Key Legal Issues
- Yacht Financing in Malta
- Leasing Structures in Malta
- Tax Benefits in Malta
Yacht Financing in Malta in a Nutshell
Yacht Financing is the key to acquiring one’s super yacht without paying the price in one go. Financing allows the yacht's cost to be spread out over a longer time, making it more affordable and attainable. Additionally, financing can provide tax benefits and allow individuals to purchase yachts outside their budget. However, the process can be quite complex.
Financial Leasing in Malta
This model is ideal for those seeking financing for smaller amounts. At the start of the leasing, the vessel is legally owned by the financer, however, the economic ownership of the vessel will be vested in the financee or lessee. There might also be the possibility for the lessee to purchase the vessel at the end of the lease period.
Operating Lease in Malta
Another type of financing structure available is that of an operational lease. This is available to higher-value yachts and provides for the payment of VAT (Value Added Tax) to be charged on the lease rentals and not on the purchase value of the yacht. Therefore, the initial VAT consideration due on the value is deferred. Commonly, a company is set up specifically for each vessel operated through this system and will be owned by the financer. The yacht will subsequently be rented for a fixed lease period to the lessee. At the end of the lease, the lessee would normally be offered the option to purchase the yacht or purchase the company holding the yacht. For commercial leases, there are no VAT implications during the lease period as the item would be used for the furtherance of trade. For privately used yachts, the deferral of VAT is optimized as it is distributed over 20 years.
Why Malta?
Malta does not offer merely an ideal geographic location in the middle of the Mediterranean Sea. The Maltese flag is the largest in the EU (European Union) and the sixth-largest in the world. This is not only because there are no nationality restrictions to ownership or due to the easy registration process. Malta has a sound legal regime backing up its Merchant Shipping Directorate, which provides the required peace of mind for both financiers and yacht owners alike. The Maltese mortgage system is quite straightforward, and the flag authorities administer the law strictly, but fairly, ensuring clarity and correctness.
What this Means for You
Thanks to the benefits of yacht financing, you are steps closer to acquiring your vessel without parting with sizable considerations. Malta offers you the optimal environment for this. The benefits of a financing structure are many, rending this option extremely attractive. Firstly, by spreading out the cost of the purchase over a longer period, the yacht becomes more affordable. Secondly, taxation in Malta for leasing structures have been deemed beneficial. Lastly, such forms of leasing provide ownership at the outset. Therefore, you can start enjoying your new yacht immediately.
How we can help
Our Maritime Law Practice Group regularly advises on transfers and purchases, structured financing and refinancings of all types of vessels, from sailing yachts to cargo vessels. Our team has, through its established links with various credit and other financial institutions throughout the world, assisted in numerous transactions involving the registration of statutory mortgages on Malta-flagged ships. Our Maritime lawyers have long been involved in typical or complex transactions in this area and through the use of Malta solutions, based on the country's sound legal framework, have added value, and given solutions beyond the traditional execution of orders.
