The global aviation industry is touching down in Malta and is becoming an important contributor to the island’s growing investment pie. A new legislative framework has turned Malta into a recognised address for the registration of both private and corporate jets, while maintenance, repair and overhaul (MRO) providers have long discovered Malta to be a profitable base. The country is also a leader in a broad range of other aviation services as it hosts firms catering for everything from crew training to engineering services and communication. With the worldwide aviation industry growing at a rapid pace, Malta is keen to expand its already impressive aviation cluster by attracting more aircraft leasing, finance and charter companies.
Malta’s first aircraft register was established in the 1960s, but it was the introduction of a new Aircraft Registration Act in 2010 that helped Malta become a serious competitor in Europe’s aircraft registration and management industry. The Act offers an easy registration procedure for private aircraft and has been designed to accommodate the most demanding structures and trends in aircraft ownership. There are now close to 220 aircraft and some 30 operators listed in the Maltese aviation registry. 2015 also brought a number of firsts, with two Airbus A340 and a Sukhoi Superjet 100, the latter being the first ever model of its type to be registered in the European Union, opting for the Malta flag. Corporate charter airlines such as Comlux, Orion Malta and Carree all registered aircraft in the country, while Austrian private jet company VistaJet has relocated its headquarters and registered 50 aircraft in Malta. The Civil Aviation Directorate of Transport Malta, the regulatory authority for all transport in Malta, provides a very attentive, personal service to companies setting up in Malta.
Leasing & Finance
Malta has also implemented the Cape Town Convention, now widely recognised as a market standard in aircraft finance transactions. The island is well placed for the structuring of air finance deals through various methods, such as syndicated loans and securitisation. In fact, a wide variety of asset classes can be securitised under Malta’s Securitisation Act, including lease and charter payments for aircrafts. In addition, the regulator has developed a procedure for aircraft leasing, and VAT payments are only due for the time an aircraft is being used in the European Union. With 40% of the world’s aircraft being leased today, aircraft leasing proves to offer tremendous opportunities for Malta to position itself as a Mediterranean hub alongside established or emerging centres, such as Dublin and Singapore.
Service & Maintenance
These business streams are strongly supported by investment in physical infrastructure, such as the €17 million, 200,000-square metre Safi Aviation Park. The park hosts a number of business aircraft operators and MRO facilities, including Lufthansa Technik, which began servicing aircraft in Malta in the early 2000s, prompting other companies to follow suit. The growth of the industry has also allowed the establishment of flight academies, as well as permitting the island’s educational institutes to offer aviation-related training. Added to its very supportive environment, Malta has taken strides in attracting an even greater share of top-tier talent and world-class firms by extending tax-friendly policies, originally drawn up for the finance industry, to the aviation sector. Foreign aircraft managers coming to Malta can now benefit from a reduced income tax rate.
Malta’s government has also announced its intention to invest heavily in the aviation industry’s research and development sector in order to retain its competitiveness on a global scale, while the Aircraft Registration Act is currently being refined. The new version is expected to include targeted incentives to make Malta even more attractive to companies offering aviation-related services. This bodes well for the future, and there is little doubt that Malta will be able to reinforce its position in the years ahead.