The Mediterranean island of Malta, which was awarded Britain’s George Cross gallantry medal for its resistance against Axis air raids and a naval blockade during World War II, is now engaged in a campaign to become as involved in the aviation services industry as it previously has been in maritime affairs. With the largest European–and the world’s seventh most extensive–shipping register, the island’s government has a vision to repeat that success in the sky through Transport Malta, part of the island’s Ministry for Infrastructure, Transport and Communications, including the civil aviation directorate.

To accomplish this, Maltese authorities highlight many perceived advantages to providers of aviation services and related businesses wanting to set up shop on the island, including its geographic position between Europe and North Africa and a largely English-speaking population. Government initiatives include a €17 million, 200,000-sq-m aviation park at Safi to host several business aircraft operators and maintenance, repair and overhaul companies.

Transport Malta and the Malta Business Aviation Association (MBAA–see box), which boasts almost 30 members, are among several MEBA exhibitors in the Malta Pavilion (Stand 540).

A key part of the campaign to attract aviation business has been Malta’s Aircraft Registration Act 2010, allowing business aircraft operators to benefit from local registration that previously served only commercial carriers; that is, those with air operator’s certificates (AOCs). According to Transport Malta, “The Civil Aviation Directorate is responsible for receiving, reviewing and processing applications for registration and entry in the [National Aircraft] Register of the relevant detailsrelating tothe aircraft and any registered mortgages.”

For those needing to operate on an AOC, Maltese approval is claimed to be granted in as few as 90 days, a period much shorter than would be possible in many much larger European Union (EU) states.

Malta operates within the EU’s tax regulations and officials are at pains to emphasize that the island is not an offshore tax haven. Nevertheless, the government has made local regulations, such as corporation tax that can be reduced to 5 percent through a reimbursement scheme, more attractive to operators than elsewhere in the EU.

Aircraft on the Maltese register at the beginning of November this year numbered 123 of more than 300 for which certificates of registration have been issued. The register grew by 20 percent during 2011, according MBAA (drawing on Transport Malta statistics).

Earlier this year, MBAA said the authority was processing more than 30 registration requests from overseas business aviation operators. AIN’s analysis of the current register suggests that about 30 business aircraft are registered, including corporate airliners. Ten airliners comprise the Air Malta fleet and more than 30 registered aircraft are microlights. Malta continues to “secure more business from a sector that gives our country prestige, direct foreign revenue, employment and added value,” said Transport Malta chief executive Dr. Stanley Portelli.

Targets Blue-chip Companies

Transport Malta has been restructuring the Civil Aviation Directorate to reinforce its ability to attract business aircraft, investing in qualified personnel and working with local law firms and other professionals, many in the financial and corporate services industries, to promote company registration in Malta. “The efforts targeted blue-chip aviation companies operating in the private- and business-aviation sectors [and] included participation in the annual European Business Aviation Conference and Exhibition (in Geneva] and attendance [at] important international industry networking seminars,” reported the government department.

The island has demonstrated that its revised aviation laws mean business, with the detention of an airliner earlier this year. In March, Fenech & Fenech Advocates were instructed and successfully carried out the first “arrest” of an aircraft under new provisions providing for precautionary seizure of aircraft in Malta.

The aircraft, an Airbus A320-211, was undergoing routine maintenance when it was arrested by order of the Malta Court as security for claims for payment of due lease fees. It was owned by a leading lessor through an Irish financial special-purpose “vehicle” (company) and operated by an Italian carrier based in Sicily.

Following the relevant application, the order was obtained and duly executed within three hours, despite “problems of formality and logistical difficulties.” The arrest was possible because the claimant’s interest was registered as an international security interest under the Cape Town Convention, which Malta ratified last year. (The arrest was subsequently lifted following agreement between the parties, but nonetheless it was a first for the island).

Assistance with Maltese aircraft registration and other corporate and financial services is available through a number of companies exhibiting in the Malta pavilion here at MEBA, including the following:

The fiscal incentives that can be enjoyed by aircraft owners and operators who register their aircraft in Malta are handled by 3A Malta, a group of accountants, auditors and business advisors.

Another company, AeroNautica (Malta) said its participation at MEBA 2010 led to “introductions, which have proved key to [our] growth in the aviation sector.” Under Malta’s highly qualified persons rules, certain AOC holders’ employees may benefit from a flat 15-percent income tax rate. Aircraft owners and operators can remain anonymous by using “a range of corporate services which include nominee shareholding or directorship and trusts,” according to AeroNautica.

Aircraft Corporate Services (Malta) states that the recent act, which widens the appeal of aircraft registration, also includes innovative legislation that not only ratifies the Cape Town Convention, but also introduces “such progressive concepts as the registration of aircraft under construction, the registration of engines and the fractional ownership of aircraft.”

Malta’s largest financial services provider, the Bank of Valetta, claims it has “always been very active in financing important sectors within our small economy, be it [in] tourism, maritime, aviation, manufacturing, [or] retail and wholesale.” This policy has recently included assistance in the purchase of a small aircraft to set up a flying school.

DC Aviation Malta is a subsidiary of Stuttgart-based business-jet charter and aircraft management and maintenance company DC Aviation, whose origins lie in the corporate flight department of Daimler Chrysler.

For M.C.M. Group, MEBA provides a shop window in which to promote its aircraft maintenance, engineering, airworthiness management, consultancy and training services, including M.C.M. Maintenance Malta.

The aviation department of lawyer Mamo TCV Advocates offers a wide variety of legal services relating to aircraft ownership, finance and leasing. The company points out that Malta’s value-added tax (VAT) department has issued leasing guidelines (based on marine practice) seeking to mitigate the VAT impact on the purchase of an aircraft and its engines. The guidelines would apply to private aircraft (not registered to a local AOC holder) that would be exempt from VAT upon importation.