Legal infrastructure for the registration of charter yachts on commercial basis is expected soon.  The MMA is currently drawing up a list of guidelines defining charter yachts. This would enable the necessary legislation to be drawn up for them to be registered under the Maltese flag as commercial ships, rather than as pleasure boats.

The draft regulations will be discussed next month with local and foreign experts to ensure that these comply with international standards due to the fact that these yachts travel to the four corners of the world. Furthermore, local authorities want to ensure there are no loopholes.

Another point is the use of terminology.  For example, the term ’pleasure’ is too easily misunderstood so abroad it might be clearer to use the word ’commercial’ yacht.

Yachts used for charter are currently registered as pleasure yachts, missing out on any possible tax advantages of being registered commercially.

Even though British standards and guidelines are being applied the MMA are looking at other international scenarios to find a framework that is more suitable for our country’s needs.

The recent legislation allowing yachts to pay VAT at a reduced rate brought the Maltese government about Lm4 million but a condition was imposed whereby the yacht had to visit Malta physically.  However, the Executive Director said that he did not envisage any condition being imposed for chartered yachts to visit Malta.  The Merchant Shipping Directorate is a service oriented authority and if need be they will send their own inspectors.

Once the legislation is in place, a number of yacht owners who charter their yachts are expected to change their flag to a Maltese one.  It appears that there is indeed a large and lucrative market for such registrations. GM International Services Limited is following closely any developments as they unfold in order to ensure that it is geared up to cater for the expected influx of registrations.