The Aircraft Registration Act
The Aircraft Registration Act has recently been enacted and will come into force in the very near future. The Act introduces a number of innovative concepts in order to make the Maltese Aviation Register competitive with the world’s leading aviation registers. The Aircraft Registration Act regulates aircraft registration and aircraft mortgages, while also providing for special privileges on aircraft and the ranking of secured creditors. A fundamental aspect of the Aircraft Registration Act is that it implements the Cape Town Convention thereby granting secured lenders a higher degree of protection and more effective remedies, allowing lower borrowing costs. Amongst the major changes introduced, of particular significance and pragmatic importance to anyone interested in registering aircraft in Malta is the recognition of fractional ownership of aircraft. The Act is also complemented by several amendments to Malta’s tax legislation providing for several tax incentives. These include a deeming provision in the law whereby income derived from the ownership, leasing or operation of aircraft or aircraft engines shall be deemed to constitute income arising outside Malta. Such income is taxed on a remittance basis and therefore exempt from income tax unless remitted to Malta. The Act comes as a result of Malta’s continuous commitment to become an excellent centre of aircraft operations and particularly a favourite EU jurisdiction to foreign investors doing international business.