Yacht Financing in Malta

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.