Pre-pandemic, Malta International Airport saw over seven million passenger movements.
Handling some 97.5% of all inbound tourists arriving in Malta,
this is clearly the primary facility for the tiny island nation of 525,000 inhabitants.
However, despite the country's small size, Malta's aircraft registry lists far more airplanes
than its relatively small international airport could handle on a regular basis-
jets from Austria's Lauda and Portugal's Hi Fly are included. But why is this the case?
Listing an aircraft under a certain country's aircraft register means that those planes are
held to that country's air regulations. So, while a Russian Aeroflot Airbus A350 might
mainly operate in and out of Moscow, its place on the aircraft registry of Bermuda
holds it to Bermudan standards and regulations. According to charter and aircraft management firm
Air CM, the Maltese aircraft register offers aircraft owners peace of mind,
with its ICAO rating as a testament to the stringent standards of safety and security.
Of course, if you know anything about international business, you'll know that's
not the primary reason some non-Maltese airlines register some or all of their fleets in Malta...
In addition to competitive aviation registration costs,
KPMG Malta highlight's the Maltese authority's quote "practical understanding of the aviation
sector and favorable corporate structures." In summarizing Malta's aircraft registry as
a financially beneficial destination, let's examine a few of the listed reasons for
registering an aircraft in the country: Firstly, aircraft temporarily not being
operated or managed can be registered here. Malta's aircraft registry recognizes
fractional ownership of aircraft -allowing registration of aircraft under construction;
Malta has an extensive tax treaty network with over 70 jurisdictions, including the US
There’s no withholding tax on lease payments where the lessor is not a tax resident of Malta;
Malta has attractive direct and indirect aviation tax opportunities for leasing of
aircraft, including tax depreciation, and partial shareholder tax refunds;
And there’s no restrictions on the nationality
of shareholders and directors of Maltese aviation companies.
A final reason cited by a few sources is that Malta is a signatory to the Cape Town Convention
on International Interests in Mobile Equipment and its Aircraft Protocol.
This sets international standards for leases and contracts, and offers creditors a higher
degree of protection and more effective remedies, while, also allowing for lower borrowing costs.
Some of the more notable commercial operators on the Maltese registry include Hi Fly, Corendon,
SmartLynx, as well as Ryanair subsidiaries Lauda Europe and Malta Air. Although Malta Air does
obviously operate service to Malta, this is only a small portion of its 140+ aircraft.
Lufthansa Group subsidiary Eurowings soon hopes to take advantage of Malta's aircraft registry too.
According to Malta Independent, the move will include the application for an Air Operator
Certificate in the country. However, a Eurowings spokesperson was clear that the move was not
to avoid taxes, saying that “The complex double taxation in
Austria has been a disadvantage for Eurowings Europe crews for years…”
For its non-Austrian crew, the spokesperson notes that problem of double tax returns and
complex accounting processes would increase with each new base opening- and registering in Malta
avoids this complexity. So did you know about Malta's
aircraft registry as a tax and business-friendly destination? Let us know by leaving a comment.