AG Advisory – Expertise and Experience in Maltese Yacht Leases
- Manuel Schembri
- Jul 29
- 3 min read
The first Malta yacht leases were introduced in the yachting industry way back in 2005 following on the experience in other member states. Over the years this solution has evolved, mainly as a result of the changes in legislation and judgements of the European Courts of Justice, whilst in 2018 the original lease solution was discontinued. Since then, building on the experience we held we began advising prospective yacht owners the use of a lease contract for yachts based on the provisions of the Maltese Civil Code and following the existing provisions of the Maltese and VAT laws. In addition, Malta introduced a useful guideline to clarify its interpretation of the use & enjoyment principle in case of use of yachts outside the EU, whilst operating under a lease subject to Maltese VAT. The jurisdiction then provided us with all the other elements needed to make a Maltese yacht lease a useful and interesting tool for prospective yacht owners and advisors.
Malta has built a reputation as a yacht friendly jurisdiction over the last 20 years, providing for all the elements to facilitate the owners and professionals working in the business. The flag and yacht register is efficient and incorporates processes facilitating yacht registration and operation. The corporate landscape allows for company formation and administration which provide protection for the owners via limited liability, and flexibility in respect of operations. A culture of compliance ensures that vetting is done properly in respect of all projects, whilst on-going checks are done regularly, and yearly company accounts are drawn up and subject to external audits. The banking system has also now developed to cater for the industry particularly through E-Payment Institutions.
Any yacht lease to be duly set-up requires a Malta company to be incorporated and duly registered for VAT with the local authorities. Appointing Malta based directors with experience and genuine control and decision making powers, allows the company to have the necessary substance once the lease is set up in Malta. A yacht must be in Malta at the time the lease is contracted so as to ensure VAT on same is due and payable in Malta.
Prospective yacht owners often reach out to us with one aim, they want to use the yacht in the EU with their family and friends on board with peace of mind. A Malta yacht lease is intended to meet this aim so that the ownership set-up is clear and straightforward, the company owning the yacht properly administered and in a timely manner, and VAT too should be duly accounted for.
Appointing AG Advisory to help structure a yacht project together with the owner, or owner’s office, and his/her preferred lawyers and tax advisors, will allow us to apply over 20 years of experience and expertise in yachting in all useful aspects including yacht registration, VAT advisory and compliance, company formation and administration, crew contracts and payroll, amongst others to plan, project accounts and apply our know how.
Thereafter appointing us to implement any approved structure allows us to apply our experience and expertise to the benefit of the owners and the professionals assisting them. Our role will be that of ensuring the project is properly financed and that same is duly documented, as well as to discuss, and possibly draw up and negotiate the terms of the lease agreement. It is crucial that the terms of the lease agreement are at arms’ length. We will often act as directors of any Malta entity set up ensuring decisions on the yacht sale, lease operation, crewing and various administrative matters are taken swiftly and are properly documented from Malta. Good corporate governance and substance rules also dictate that we draw up, file and hold proper accounts, VAT returns and financial records and we take responsibility for same. This will ensure a proper set up, as well as a timely operation and support.
Reach out with any prospect or project, we look forward to sharing our experience and assist.
AG Advisory was set up in the beginning of 2024 with a focus to providing advisory services to the global yachting industry, particularly in the area of VAT. Our base is Malta and our team vaunts over 20 years of experience and expertise in the various aspects of the industry. During these years we had had the opportunity to advise, support and assist in respect of many Maltese yacht lease structures garnering expertise as we learnt and matured.
