Malta has a long-established and illustrious reputation within the aviation sector. A vast cross-section of aviation management companies in Malta has taken advantage of excellent facilities and a very favourable tax regime.
With the availability of a fully compliant international airport offering top-of-the-range ancillary services and high-tech office spaces close to the runway, and a highly-skilled workforce, Malta is a natural choice for aviation activities.
Coupled with the very attractive and favourable tax regime, the island is one of the most sought-after destinations to set up and operate aviation management companies.
Malta’s aviation history goes back to before the Second World War. Still, the Civil Sector came into its own after the national airline was set up in 1973. The creation of companies bolstered the sector to service the Libyan oil field industry, many of which are still in operation today.
Fast forward to 2020, and there has been a massive influx of aviation management companies in Malta. These include world leaders, including numerous airlines, ground handling operators, aircraft servicing, refurbishments, flight schools and much more.
Malta International Airport is also a hub of activity when it comes to cargo operations. This diverse cross-section of aircraft management companies in Malta falls under the Civil Aviation Directorate (CAD) under the auspices of the Transport Ministry.
The CAD is a member of the International Civil Aviation Organisation and its European counterpart, the European Civil Aviation Conference, EUROCONTROL, and the European Aviation Safety Agency.
The CAD enforces all air industry regulations, particularly about safety, clearance for operations and more. This includes licensing of qualified aeronautical personnel, implementing international air services agreements and licensing of navigation services providers.
The Aircraft Registration Act, Chapter 503 of the Laws of Malta, covers the framework for the registration of aircraft and aircraft mortgages.
The Act implements all set out in the Cape Town Convention on International Interests in Mobile Equipment and Aircraft Protocol, which was set up in 2006 and is widely regarded as a prerequisite for any jurisdiction taken seriously in the aviation sector.
One of the advantages of registering an aircraft in Malta is the concept of fractional ownership. This allows an aircraft to be split among co-owners in specified fractions or percentages. This also means that owners can specifically take ownership of engines or the airframe.
Like all companies registered in Malta, Aviation management companies in Malta that own or operate an aircraft or operate services within the sector are subject to a 35% tax rate.
This system is subject to the full imputation tax system. When tax is paid, shareholders are entitled to a refund in part or in full upon a distribution of the dividend.
The 6/7ths tax refund is one of the possible applicable rates of refunds, depending on the particular scenarios. This makes Maltese companies highly efficient tax vehicles.