Malta Yacht Leasing

The yacht leasing system is one of the most popular corporate ownership structures available for European yachts operating within the European Union (EU).

In addition to providing benefits in terms of asset separation and limitation of liability, leasing systems can, as a side benefit, provide potential for the amount of VAT payable on the value of the yacht to be reduced.

Oceanskies is a marine and aviation consultancy based in the Channel Island of Guernsey. Using its independence and experience of ownership, registration and documentation of yachts, worldwide, and specifically the EU, Oceanskies has put together a yacht leasing package established in Malta charged on an all inclusive fixed fee basis based on the work involved as opposed to a percentage of yacht value.

It is the purpose of this guide to provide background to the concept of yacht leasing and describe how the Oceanskies Malta yacht leasing system works in practice in an easy to understand guide.

Background

The Republic of Malta has historically been a popular centre for the ownership and registration of ships and yachts.

Following the accession of Malta to the EU it was decided to enhance further the appeal of Malta to yacht owners as a centre of excellence for corporate yacht ownership and registration by introducing a leasing system that was based on a model already implemented by France and Italy.

An innovation of the French and Italian leasing model was the introduction of an automatic presumption of the time that a yacht might operate outside EU territorial waters during the course of the lease.

The automatic presumption was also adopted by Malta with the standard rate of VAT in Malta of 18% being applied to an established percentage of the lease deemed to correspond to the estimated use of the yacht in EU territorial waters.

The following tables illustrate the established percentage of lease according to the type (i.e. motor or sail) and length of yacht:

Motor Yachts

Length % of lease subject to VAT Effective rate of VAT
Over 24 metres in length 30% 5.4%
Between 16.01 and 24 metres in length 40% 7.2%
Between 12.01 and 16 metres in length 50% 9%

Sailing Yachts

Length % of lease subject to VAT Effective rate of VAT
Over 24 metres in length 30% 5.4%
Between 20.01 and 24 metres in length 40% 7.2%
Between 10.01 and 20 metres in length 50% 9%

Operation of Oceanskies Malta Leasing Structure

Oceanskies is not licensed to form or manage companies but uses its experience to select service providers that are licensed to provide such services in the jurisdiction from where they operate. Oceanskies is thus able to support clients by becoming the single point of contact in respect of the ownership, registration and documentation of their yacht and by working in tandem with licensed providers we are able to provide a complete and cost effective yacht ownership and operation package.

The key stages of the Oceanskies Malta Leasing structure are as follows:

  • Incorporation of a yacht owning company in Malta (the Lessor) by a third party specialist, local company formation and administration agent.
  • EU VAT registration of the lessor in Malta. All Maltese yacht leasing arrangements must be approved on a case-by-case basis by the VAT Department of Malta.
  • Lessor contracts for the build or purchase of the yacht which will be registered in the name of the company by Oceanskies either in Malta or at any port of registry that might be favoured by the client, (for example London is popular alternative).
  • The yacht is delivered to the Lessor in Malta where Oceanskies will welcome the yacht and arrange for its berthing as well as the subsequent handling of all arrival formalities including customs clearance and, if necessary, EU importation and VAT deferment.
  • Following arrival and, if necessary, the EU importation of the yacht in Malta the lease of the yacht will be initiated by the Lessor to a third party who may be a private individual, another Maltese company or a company incorporated in a third party jurisdiction.
  • As a result of the Lessor making the yacht physically available to the Lessee at the start of the lease in Malta the Oceanskies Malta Leasing system ensures full compliance with the latest changes to EU VAT law regarding the long term hiring of a means of transport effective from January, 2013.
  • The lease agreement is provided by Oceanskies and will be of a bareboat or demise basis whereby the Lessor effectively places the day to day operational responsibility of the yacht with the Lessee who would then, for example, be expected to be responsible for its navigation, the payment of vessel running expenses and the provision of crew.
  • Following the commencement of the lease the yacht will leave Malta to commence its cruising activities under the control of the Lessee.
  • The yacht will then enjoy free circulation within the EU. After the end of the Lessor’s first VAT accounting period Oceanskies will obtain a letter from the Malta VAT Department confirming that the Lessor is properly accounting for VAT on the lease of the vessel.
  • The lease would usually run for the period of one year although the lease could in theory be extended to a maximum time frame of three years.
  •  Although there may be an option for the Lessee to purchase the yacht at the end of the lease period at a percentage of the original price any final purchase that may occur is strictly an option which may or may not be exercised by the Lessee.
  •  If the purchase is exercised then the yacht will be required to return to Malta whereupon Oceanskies will again be on hand to welcome its arrival and arrange for its subsequent sale by the Lessor to the Lessee whilst lying alongside in Malta.
  • Oceanskies, as part of its complete Malta leasing package, will handle the issue of the Bill of Sale and arrange for the production of a Certificate of VAT Paid Status by the VAT Department of Malta once all VAT due has been paid.
  • The Certificate of VAT Paid Status then becomes evidence of the VAT paid status of the yacht.

Scale of Fees, Pricing and Charging for Malta Yacht Leasing

We encourage owners, their advisers and any intermediary who might be interested in incepting a Maltese leasing arrangement to request a free no obligation quotation from Oceanskies to provide a complete cost effective Maltese leasing package for their yacht.

Unlike the majority of companies who provide Malta yacht leasing structures we do not charge on a percentage of vessel value.  We believe that to charge as a percentage of yacht value is unfair given that the work performed does not directly correlate. We handle a high value yacht in the same conscientious way as a vessel of lower value.

We also include all exit fees such as the sale and re-registration of the vessel and close down of the Lessor company as part of our package. Many other providers do not highlight these requirements in their initial fee proposals and penalise clients accordingly on exit.

 

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Guernsey Office

Oceanskies Limited

Castle Emplacement

St. Peter Port, Guernsey GY1 1AU

Channel Islands, Great Britain

Malta Office

Oceanskies (Malta) Limited

43A/1 Saint Paul's Buildings

West Street, Valletta VLT 1532

Malta

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