Malta yachting business has never been slow; it is one of the world’s most popular jurisdictions and the largest flag registry in the EU. Nevertheless, there seems to have been a surge in interest recently that is keeping those of us in the industry even busier than usual. Where is this coming from?
Professionals familiar with yachting will already be aware of the stand-alone benefits of Malta as a registering jurisdiction. Its geographic location is ideal, particularly for VAT importation into the EU, which is one of the most common requests that we help people with. It also offers a useful 18 month temporary importation of yachts for private use. Attractive VAT incentives are available for yacht leasing schemes, and the jurisdiction also has a very strong corporate structuring regime for yachts that will be owned through a company. On top of all that, it is a well-respected and stable jurisdiction, being a sovereign state within the EU.
Yet those benefits alone can’t account for the recent surge – there has been no substantial change in the local offering that would correlate with the spike in interest. It must therefore be down to external factors. One possibility is that it is simply representative of an increase in the number of new yachts being launched but, whilst the industry does seem to be slowly picking up after the post-2008 dip, this is unlikely to account for the level of increased interest unless Malta is attracting a larger portion of international business than it has been previously.
There is some speculation within the industry that it may be down to a move away from jurisdictions associated with more aggressive tax planning. If this is indeed the case, Malta’s EU membership may be attracting owners and advisors for more than just the convenience it offers when sailing the Mediterranean. The theory rests on the increasing pressure on both individuals and companies to be more transparent in their international tax planning, which impact on structures for luxury assets such as yachts. It is an attractive theory, although I must stress it has not been backed up by any rigorous research of which we are aware.
Whatever the reason, how might this surge in interest impact on financial advisors and their clients? There is a possibility that resources may lag behind interest in the very short term, which advisors should at least be aware of when discussing timeframes and other ‘convenience factors’. For example, Transport Malta response times might reasonably be expected to stretch slightly over the coming season. There is also an increased possibility of a shortage of berths this coming summer if the surge continues, although local authorities are working to increase the number available, with a new 200 berth marina having been approved in September this year.
If you would like to discuss Maltese registration I will be at the Global Superyacht Forum in Amsterdam 16-18 November and would be happy to arrange a meeting.