The Aircraft Registration Act joins other legislative packages in ensuring that Malta continues developing as a premier jurisdiction for international commercial, estate planning and financial activity. Malta’s established reputation as a solid jurisdiction for ship finance, can now be extended to asset finance in general, as well as aircraft finance in particular. Being a modern and sophisticated law which besides regulating aspects of aircraft registration, ownership, nationality, aircraft mortgages, special privileges and related matters, it introduces innovative concepts with the sole purpose of establishing a more competitive aircraft register.

Through this new modern approach Malta, also basing itself upon the extensive experience acquired in the financial services sector, an area which has seen Malta acquire international recognition for its success, is now extending to the aviation sector. Malta does not only seek to offer attractive fiscal benefits (consisting mainly in a Tax Refunds and Participation Exemption regime) as but offers the benefit of a good network of Double Taxation Agreements coupled with solid service levels. Furthermore, Maltese tax legislation contains special rules aimed at facilitating cross-border aircraft operations including financing.

Malta also offers the added advantage that it forms part of the Euro Zone which eliminates exchange control issues between participant jurisdictions.

Malta’s ratification of the Cape Town Convention clearly facilitates the process of acquiring and financing aircraft. In a nutshell the current Maltese Aviation law regime recognizes and adopts all known legal mechanism and techniques required to establish itself as a premier aviation services jurisdiction:

  • recognition of fractional ownership of aircraft, as well as the possibility of establishing segregated cells within aviation undertakings;
  • the possibility to register an aircraft under construction;
  • the possibility for non EU interests to register aircraft not engaged in air services or under construction, provided that a resident agent is appointed;
  • international qualification to register aircraft, via operators based in Malta or the EU;
  • irrevocable de-registration and export powers of attorney and other special powers of attorney granted as security to financiers etc., will be recognized and may be entered into the register;
  • aircraft form separate and distinct assets within the estate of their owners for the security of actions and claims to which the aircraft is subject (in case of bankruptcy of the owner of an aircraft, all actions and claims, to which the aircraft may be subject, shall have preference over all other debts of the owner’s estates);
  • preservation of special privileges or reservation of title of aircraft on accessories of aircraft;
  • aircraft mortgages fully recognized and enforceable, with full self-help remedies available to the mortgagee;
  • mortgagee and other holders of a security interest are protected even when the aircraft ceases to be registered in Malta. The Registrar is empowered to communicate independently with the mortgagee or holder of any security interest to take all action required, including granting extensions for the validity of relevant registrations, the orderly closure of the registry and enforcement of the mortgage or other security interest, and the safe operation of the aircraft.

For further information, kindly contact Dr. Tonio Fenech.