Malta Aircraft Registration Act

The Minister has announced that shortly Malta would be enacting a new Aircraft Registration Act. The aim of this legislation is to support the aviation industry. Malta has recently attracted the likes of Lufthansa Technik, MCM, Comlux and DC Aviation, all renowned names in the aviation world. More recently, the Malese department of Civil Aviation has issued an air operator certificate to Carre Aviation Ltd. operating a CRJ 200 with 15 seats and Orion Malta Ltd. operating a Hawker 800. This legislation tackles a number of issues but primarly and of significant importance would be Malta's adoption of the Cape Town convention with regards to aircraft mortgage registration but again Malta on the forefront. This legislation also tackles important issues such as local representation, shared and frational ownership for residents and non residents both from the EU and non EU countries. Based on Malta's performance so far, its position of high standing with EASA, other important fiscal legislation all within the EU framework, Malta is expected to frow its register exponentially especially among business jet and general aviation aircraft owners, who want a cost effective, reputable aircraft registration within the EU framework.

Ebace 20 - 22 May - Geneva

Europe’s leading companies continue to find the competitive advantage that is gained through the use of Business Aviation, Europe’s engine for growth. European companies are prospering as their employees overcome distances between various locations throughout Europe (and the world), save time in congested airports, maintain security and optimize their time when they must travel to grow business. EBACE2008, in Geneva May 20, 21, 22, is the flagship forum for the European business aviation community to find products and services from the world’s top vendors. Also at EBACE, the European regulators and government officials who make decisions that directly affect business aviation operations in Europe and around the world meet face to face with the companies who are using aviation to facilitate their business. EXHIBIT/SHOW HOURS: TUESDAY, MAY 20 10h00 – 18h00 Exhibits in Halls 5, 6 and 7, and Static Display of Aircraft Open WEDNESDAY, MAY 21 09h00 – 17h00 Exhibits in Halls 5, 6 and 7, and Static Display of Aircraft Open THURSDAY, MAY 22 Exhibits in Halls 5, 6 and 7 Open 09h00 – 16h00 Static Display of Aircraft Open 09h00 – 15h00 We will be at EBACE from the 20th to the 22nd May, anyone who would like to meet to discuss, future trips to Malta, the potential of the Maltese register and AOC, feel free to drop me a line. In the meantime I will try to post some notes on my experiences at the show, while in Geneva.

Tax Implications in Biz Aviation

Malta is not yet synonymous with business aviation, but the business aviation industry my well look a little deeper in what this tiny island in the middle of the Mediterranean has to offer, other than the great weather and historical places. Over the years Malta made a name for itself as a low tax country, first by offering offshore legislation as far back as 1988 and of late, since Malta became a full member of the European Union, by offering a unique infrastructure whereby international trading companies can benefit from unique fiscal framework within the European Union. As airports become more congested and successful businesses experience growth and offer their services to a global audience, the more business aviation will increase. In a recent EU publication it was estimated that since 2002 the business and general aviation rate of increase was almost twice as high as that of scheduled airlines, percentage wise. In spite of the current air of economic doom and gloom, which invaribly will effect economic growth and business profitability, there is a school of thought that maintains that the current airline woes will just make business aviation more attractive, especially with the advent of VLJ's which make the service more affordable to a wider spectrum of businesses and individuals. With this growth in utilisation of business aircraft, the industry has started to attract greater attention from regulatory institutions, but also the more knowledgable end user, business traveler, is strating to frown upon the so called low-tax operations in so called flag of convenience countries. This is where Malta is in a league of its own. Malta was the first country to adopt JAR-OPS as its legislation, and today offers, JAR-OPS 1 Air Operating Certificates, soon EU OPS 1, as EASA takes over from JAA, thus Malta is no flag of convenience, but has a respected aviation authority within the European framework. The trade secret is that the Maltese government has legislated fiscal laws acceptable to the European Union, but not just, as Malta has in excess of 50 double taxation treaties, whereby one can have a tax effecient(low tax) infrastracture, not considered as tax evasive by the European Union. In essence non resident shareholders, individuals or organisations who setup a Maltese company for trading internationally, although the company is taxed at 35% on its pofits, on decleration of dividends, the non resident shareholders are refunded 6/7 of the tax paid. There are various scenarios possible of how one, whether an operator, an owner, a broker, a management organisation can benefit from the Maltese formula. We have put together a team of consultants with various expertise from airworthiness to financing, from legal to tax advise for individuals or organisations who want to investigate these opportunities further. A tax efficient infrastructure, does not neccessarily mean a Maltese Operating certificate, there various scenarios available which would allow an organsation to maintain its current AOC and country of register yet still benefit from the Maltese fiscal incentives. As oil prices and labour cost continue to increase, a tax efficient infrastructure could give an operation the competitive edge or a business the opportunity to become more efficient and own a business jet.

History of Maltese Business Aviation

In some of my earlier posts, I have mentioned that the Maltese Department of Civil Aviation has issued the first AOC to a foreign based Lear 60XR. Further to the interest that the Maltese infrastructure is soliciting in the Business Aviation community, I thought that I expand a little further on this niche industry in Malta. Due to Malta's strategic geographical location, this island at the heart of the Mediterranean has always played an important role in international trade, even before the advent of the aircraft, in fact Malta has always played an important role in the maritime trade. Having been a colony of all the major empires, Phonecian, Roman, Arab, Knights of St. John, French and the British Colony, Malta has played an important part in the history of the Mediterranean. Having been a colony of the British Empire during World War II, Malta was introduced early first to military and then to commercial aviation. Malta had its aircraft register established in the sixties. Because of Malta's strategic importance, maritime industry, as well as our association and influence by the United Kingdom, although not a Geneva, London or Paris, Malta always had a steady flow of private and general aviation aircraft passing through. As Malta started to aspire to become a member of the European Union, and established itself as a respectable and stable democracy, with sound legal and financial legislation framework in the early nineties, Malta started seeing a number of business entrepreneurs who flew to our shores in their business jets. One can describe Capt. Lino Xuereb as a pioneer in this industry, having been the first person to set-up a company with a business jet based in Malta. Capt Xuereb got the first busness aircraft in the early nineties, a Citation II, which served both the local community of businessmen and individuals and corporations in the surrounding Mediterranean countries. Having got the first Maltese AOC with a business jet on its licence, Capt Xuereb never looked back, today he is the most experienced Maltese business jet pilot, and still is flying and running the only company with a business jet, a Lear 60, based in Malta. On the otherhand, myself at Sierra Aviation, established in 2002, Sierra Aviation, which todate remain the only company dedicated to business aviation services. As Malta became a full member of the EU, adopted the Euro and is a member of JAA/EASA, I feel Malta has a lot to offer to the business aviation community. Malta is not only strategically located in the heart of the Mediterranean, offering a bridge between Europe and North Africa, but our 300 days of sunshine (no icing conditions), relatively low labour cost(in comparison with mainland Europe), excellent fiscal infrastructure within an EU environment, and of course internationally recognised aircraft operating infrastructure such as JAR OPS 1/EU-1. If one is shopping for an aircraft register Malta has a lot to offer, aircraft can be operated commercially and privately (Isle of Man on aircraft in the private category are allowed), freedom of movement (Swiss registered aircraft are not allowed to fly between Moscow and France, and are restricted with regards to internal flight in some EU countries), excellent fiscal benefits and yes why not great weather.

Malta: Not just an island in sun

Malta is a small island in the centre of the Mediterranean having a population of less than 400,000 people, famous for its sun, sea, history and culture, but not just. Joined the European Union in 2004 and at the start of 2008 became part of the Eurozone as Malta adopted the Euro. As the manufacturing industry sought greener pastures in Eastern Europe and the Far East, and with the emerging tourist markets again in Eastern Europe giving Malta a good run for its money, Malta had to seek alternative sectors wherefrom to attract foreign investment. An island bereft of any natural resources, except for maybe its weather, Malta betted on the service industry, especially in Information and Communication industries. One such success was becoming the first European country to offer a licence to online gambling sites, similarly with the yacht register and call centres. Malta has two major advantages on the rest of Europe; a. its tax infrastructure and b. the language. The former was an important part of Malta’s negotiation for the accession into the EU, whereby the Maltese government based on the island’s socio/economic standing with respect to the rest of the EU successfully negotiated a very favourable tax rate for foreign investment in the island, where in effect a foreign shareholder was taxed at only 5% on the revenue. The latter being the language, which Malta wisely had after its independence from the UK in 1964, kept the English language as its national language together with Maltese, which means that all of Malta’s laws are in both Maltese and English and the whole population is fluent in the English language. Which brings us to what to date is probably one of Malta’s best kept secrets. Sierra Aviation, the islands only dedicated business aviation company, realised that Malta was sitting on a gold mine. As the business jet owners community continued to increase on the European continent, and with ever stringent regulations for the operation of such business jets especially in Europe, Malta gives the opportunity to business jet owners to register their aircraft, management companies to obtain world recognised JAA/EASA operating licence from an English speaking EU country, with a 5% tax rate and double taxation with agreements with most EU countries, low labour cost, and amongst the lowest authority fees in Europe. With support of the Maltese Government, and the Department of Civil Aviation, Stanley Bugeja CEO of Sierra Aviation reckons that it is only a matter of time before Malta would become renowned for the safest, yet cheapest business jet operating licence infrastructure in Europe. Malta should have the first non Maltese owned but Maltese registered aircraft and operating licences as early as the first half of 2008. If you are a business jet owner, Malta offers probably the best European tax infrastructure and lest we forget best weather all year round in Europe.