Aviation

Yes this was ratified and in 2010 national legislation was implemented accordingly allowing financiers of Maltese registered aircrafts to benefit from the highest standard of international protection.

The CT Convention is a fundamental tool granting owners, aircraft operators and parties to a leasing transaction with the highest level of legal certainty with respect to title of ownership, liens, leases  and allowing such persons to enforce their rights within the wide network of ratifying states.

Interests registered under the Cape Town Convention benefit from full legal force in Malta and rank prior to any other similar security interest registered with the Maltese National Aircraft Register. The CT Convention permits aircraft owners, as an additional form of security, to grant an Irrevocable De-Registration and Export Request Authorisation (IDERA) to a secured party.

Financiers are granted different tools to secure their interests and therefore encourage the financing of aircraft assets through the registration of:

• A Mortgage registered in the Malta Aircraft Register;
• An irrevocable de-registration and export request authorization and special power of attorney;
• Interests in the international registry set-up under the Cape-Town Convention.

1. By ratifying the Capetown convention on International Interests in Mobile Equipment and its Aircraft Protocol, Malta provides a high level of protection and tangible remedies whilst reducing borrowing costs;
2. The Malta Aircraft Registration Act facilitates registration of aircrafts through a set of pro-creditor rules allowing the registration of mortgages and international interests over aircrafts and or engines with the latter prevailing over Maltese-registered mortgages. In addition to this the Malta Aircraft Registration Act allows the registration of an Irrevocable De-Registration and Export Request Authorisations (IDERA) and special power of attorney.
3. The Aircraft Registration Act also allows the possibility to register an aircraft by the following persons:

• An owner acting in its capacity of aircraft operator;
• Fractional owners;
• Owner of aircrafts under construction or temporarily not being operated or managed;
• An aircraft operator under temporary title;
• An aircraft purchaser under a conditional sale or title reservation agreement authorized to operate such aircraft.
• A trustee for the benefit of other persons.

1. Possibility to set up Aviation Cell Companies allowing aircraft owners to register an aircraft or an engine or any other right under the ownership of separate cells of the same company. The patrimony of each cell is separate and distinct from that of each other cell thus allowing adequate ring fencing to assets of cell from the assets of another cell.

• All aircrafts parts can benefit from an accelerated depreciation period of four years.
• No withholding tax is applied on dividends, interests and royalties. Similarly no withholding tax applies on lease payments if the lessor is not a Malta tax resident;
• Effective tax rate of 5%;
• Possibility to apply a 15% personal income tax rate to certain categories of employees within the aviation sector;
• Competitive social security rates;
• Benefit from provisions included in an extensive network of OECD model type double taxation agreements;
• Favourable VAT treatment for finance and operating leases;
• Fringe benefit exemption for Non-Maltese natural persons with respect to the use of private aircrafts;
• No restrictions on the nationality of shareholders and directors of Maltese companies.

Absolutely No. Over the last years, thanks also to government incentives in the form of soft loans, loan guarantees, tax credits and research and development schemes Malta was able to diversify its offering to the industry and create the perfect environment able to stimulate:

• the growth of a number of well respected Maintenance, Repair and Overhaul facilities,
• the creation of qualified work force,
• the arrival of innovative players in the field of unmanned aerial vehicles and flight training academies.