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28 April 2021
As the largest maritime flag in Europe and the sixth largest flag globally, the Malta maritime flag is chosen by corporate entities and individual owners alike for both commercial and pleasure crafts of all types and sizes. The Malta Ship Registry has always sought to keep up with the requirements of the industry, remaining accessible to those interested in using the Malta flag while at the same time ensuring to maintain the highest standards and avoid any abuse.
When deciding on the ownership structure for a vessel to be registered under the Malta flag, owners may opt for one of the various possibilities acceptable in terms of Maltese law. These include:
In the case of a non-Maltese entity or foreign individual (referred to in Maltese law as an 'international owner'), said non-Maltese owner must appoint a resident agent that is habitually resident in Malta for the purposes of acting as a channel of communication between the Maltese authorities and the non-Maltese owner. For foreign individuals, the appointment of a resident agent is not required if the individual resides in Malta. The same options apply to bareboat charterers registering their interests under the Malta flag.
Once appointed, the resident agent is empowered by the international owner to:
Consequently, the appointed resident agent does not require a separate power of attorney to carry out said activities, but is authorised to do so pursuant to the appointment and in terms of the law. The resident agent also acts as a judicial representative of the international owner in case of any judicial proceeding in Malta.
The appointment of the resident agent takes place pursuant to a statutory declaration which reproduces the wording of the law and is accompanied by documentation relating to the international owner. For a corporate entity, this includes the statute of the entity together with an updated good standing certificate and legal opinion. For an individual, this would include a certified passport copy.
While the appointment of a resident agent is for an indefinite period and no term can be specifically included in the declaration of appointment, the law provides that the resident agent may resign at any time; the international owner may also remove the resident agent provided that a new one is appointed in its stead.
For a Maltese company, the memorandum of association usually includes a special attorneys clause which lists the attorneys situated in Malta and appointed by the company for the purposes of signing and filing all documents required for the registration and deletion of vessels on behalf of said Maltese company, as well as any other paperwork (eg, notices or declarations) ancillary to the registration.
Although the resident agent (in case of an international owner) and the special attorneys (in case of a Maltese company) are authorised to do anything related to the registration of vessels under the Malta flag, specific transactions, such as the registration of a transfer of ownership or a mortgage over the vessel, do not fall within the powers of the resident agent or special attorney. A separate power of attorney specifically authorising the attorney to represent the international owner or Maltese company (as the case may be) is required to enable the Malta Ship Registry to recognise the authority of the resident agent or special attorney in such transactions. This is intended to protect the owner's interests and ensure that no abuse is allowed by the resident agent or special attorney unilaterally disposing of or encumbering assets without the owner's specific authorisation.
The Malta Ship Registry's success is a result of a balance between strict technical requirements which attract vessels of the highest standards and flexibility in promptly adapting to the shipping industry's needs. The legislative framework supporting the whole structure, including that relating to ownership requirements, is constantly updated – whether this relates to Maltese or international shipowners. An example of this are the amendments inserted into Maltese law as a consequence of Brexit to ensure continuity for British individual shipowners using the Malta flag which would have otherwise no longer satisfied the eligibility requirements following Brexit.
For further information on this topic please contact Lara Saguna Axiaq at Fenech & Fenech Advocates by telephone (+356 2124 1232) or email (firstname.lastname@example.org). The Fenech & Fenech Advocates website can be accessed at www.fenechlaw.com.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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