Aviation – Acumum Advisory

aviation

Overview

Malta’s strategic location in the Mediterranean, its full EU membership, and its robust regulatory framework make it a leading jurisdiction for aviation.

The Maltese aviation sector has grown from a small registry established over 30 years ago to a well-respected international registry, actively encouraged through highly attractive fiscal opportunities, including competitive registration fees, operational costs, and VAT incentives.

Acumum Advisory provides end-to-end advisory support for aircraft owners, operators, lessors, and financiers. Through experience, expertise, and established business relationships, we have the insight needed to advise on all aspects of Malta’s aviation framework, from initial registration and corporate structuring through to obtaining an Air Operator Certificate (AOC) and an Air Operating License (AOL), as well as ongoing compliance.

Why Malta is a Premier Aviation Jurisdiction

Malta has implemented EASA’s standards in aviation while providing highly attractive fiscal incentives on VAT and competitive registration fees and operational costs. Accession to the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol has served to bolster the value that registration in Malta brings to aircraft owners and financiers alike.

Key advantages of registering an aircraft in Malta:

Full EU member state, party to key international aviation conventions
EASA-compliant standards and safety framework
Cape Town Convention signatory — robust protection of creditors’ and owners’ interests
Attractive tax incentives, including accelerated depreciation, investment tax credits, and VAT structuring opportunities
Competitive registration fees based on maximum take-off weight (MTOW)
Recognition of fractional ownership
Minimum depreciation periods for aircraft
No restrictions on nationality for non-EU owners who appoint a resident agent
Automatic VAT exemption on importation for aircraft operating under an AOC
In bankruptcy or insolvency matters, all owner claims have security preference over other creditors; self-help is available in the event of a mortgage default without resorting to the courts

Aircraft Registration

Eligibility

The Malta aircraft register is held at the Civil Aviation Directorate (CAD) is open to a wide range of individuals and corporate entities, including private jets, commercial airliners, helicopters, and aircraft under construction. Eligible registrants include:

Citizens of the European Union, the European Economic Area (EEA); , or Switzerland, residing or having a registered office in one of these jurisdictions
A company or undertaking formed in accordance with the law of Malta, an EU Member State, an EEA state, or Switzerland, with its registered office, central administration, and principal place of business within these territories;
A natural person who is a citizen of, or a company established in, an approved jurisdiction outside the EU/EEA, provided they appoint a resident agent in Malta

Acumum Advisory is fully authorised to act as resident agent, fulfilling this requirement and representing owners’ interests with the Maltese authorities.

Registration Process

The registration process is managed by the Civil Aviation Directorate (CAD) of Transport Malta and follows these key stages:

Reservation of registration marks — application to reserve the desired Maltese registration marks (e.g., 9H-XXX)
Submission of application and documentation — including proof of ownership (Bill of Sale), aircraft details, evidence of de-registration from any previous registry, and due diligence information on the owner or operator
Technical inspection and airworthiness review — the CAD reviews technical records and may require a physical inspection to ensure compliance with applicable EASA airworthiness standards
Issuance of Certificate of Registration — once all legal and technical requirements are satisfied, the CAD issues the Certificate of Registration

With all required documentation in order, registration can often be completed within a few weeks.

Taxation of Income

Malta’s taxation system is based on the principle of domicile. A single-purpose vehicle (SPV) or a company owning a single asset, incorporated outside Malta, and therefore not domiciled in Malta, will not be subject to Maltese tax except where income is remitted to Malta. This is subject to certain conditions relating to ‘effective management and control’.

Depreciation

Accelerated depreciation of engines, airframe, and other parts is available. The minimum depreciation periods are as follows:

Category	Years	% Per Year
Aircraft airframe	6	16.7%
Aircraft engine	6	16.7%
Aircraft engine / airframe overhaul	6	16.7%
Aircraft interiors + other parts	4	25%

Investment Tax Credits

Any person or business involved in repairing, overhauling, or maintaining aircraft, engines, or related equipment may benefit from investment tax credits against the tax due on chargeable income. Unutilised investment tax credits may be carried forward against tax due in subsequent years at a multiplied amount.

Finance and Leasing

The finance lessee is considered the owner of the aircraft, rather than the finance lessor. This results in the following treatment:

Operating leases:

Lessor: Tax is levied on the full amount of the lease income if responsible for maintenance; tax depreciation for wear and tear can also be deducted
Lessee: Can deduct 100% of the amount of lease payments if responsible for maintenance; tax depreciation for wear and tear can also be deducted

Finance leases:

Lessor: Taxed only on the interest portion of the finance charge
Lessee: Regarded as the owner; can deduct finance charges and costs for repairs, maintenance, and insurance, and claim tax depreciation

VAT on Importation

Depending on the structure employed, importation of an aircraft into the EU may be arranged so that no VAT is levied. There is an automatic exemption of VAT for aircraft operating under an AOC. In 2020, Malta introduced a policy allowing for the importation of private registered aircraft involved in operational leasing under certain conditions.

Aircraft Operating Certificate (AOC)

An Aircraft Operating Certificate (AOC) is the fundamental approval required to conduct commercial air transport in Malta and across the EU. It certifies that an operator has the necessary professional capability and organisational structure to ensure the safety of its operations. Air transport organisations are required to have an AOC authorising them to carry out any air service within the EU in accordance with Council Regulation 1008/2008 on common rules for the operation of air services in the Community.

The AOC is defined under the Regulation as: “A certificate delivered to an undertaking confirming that the operator has the professional ability and organisation to ensure the safety of operations specified in the certificate, as provided in the relevant provisions of Community or National law, as applicable.”

In Malta, the competent authority that regulates the aviation sector is Transport Malta. The Maltese Civil Aviation Directorate (CAD) has established the rules and procedures for granting an AOC.

Note: The application for the issue of an AOC must be submitted at least 90 days before the date on which the applicant intends to begin operations.

Main Requirements for an AOC

The principal place of business and, if any, the registered office, must be in Malta
The applicant must satisfy the CAD that they are able to conduct safe operations
Applicants must appoint an accountable manager responsible for establishing and maintaining an effective management system
Applicants must nominate persons responsible for the management and supervision of flight operations, crew training, ground operations, and continuing airworthiness

The 5 Stages of Obtaining an AOC

Stage 1 — Pre-Application
The applicant enters into preliminary discussions with the Flight Operations Inspectorate of the CAD. The CAD provides complete information on the type of operations that may be authorised and the data and procedures required. The applicant submits a Pre-Assessment Statement (POPS form) to establish intent, while the CAD carries out a parallel assessment of the financial, economic, and regulatory status of the applicant and proposed operation.

Stage 2 — Application
Upon completion of the financial, economic, and regulatory assessment, the CAD makes a provisional determination on the general feasibility of the operation. The formal AOC application is filed and evaluated in-depth, covering required manuals, training programmes, operational and maintenance facilities, aircraft, support equipment, record keeping, dangerous goods programme, flight crew, and key management personnel.

Stage 3 — Evaluation
Detailed examination of all the applicant’s documentation and manuals to establish that every aspect required by the regulations has been met.

Stage 4 — Inspection and Demonstration
Inspections are carried out of base and station facilities, operational control and supervision facilities, and all training programmes and facilities. The applicant is required to carry out demonstrations, including of the operational control system and flights.

Stage 5 — Certification
Once the Flight Operations Inspectorate of the CAD has determined that all operational certification requirements have been completed satisfactorily, and that the operator is fully capable of conducting a safe and efficient operation, the AOC is issued.

Air Operator’s Licence (AOL)

Every AOC holder is also required to obtain an Air Operator’s Licence (AOL). An AOL may be obtained within a maximum timeframe of three months from receipt by the CAD of all necessary information.

The conditions for granting an AOL include:

Applicant’s principal place of business must be located within Malta
Applicant must hold a valid AOC issued by the CAD
Applicant must have one or more aircraft at its disposal through ownership or a dry lease agreement
Applicant must have as its main occupation the operation of air services, in isolation or in combination with any other commercial operation of aircraft, or the repair and maintenance of aircraft
Applicant must be owned and effectively controlled by EU Member States and/or nationals of Member States to the extent of more than 50% of the undertaking, whether directly or indirectly through one or more intermediate undertakings (except as provided for in an agreement with a third country to which the EU is a party)
Applicant must meet the financial conditions specified in Article 5 of the Regulation
Applicant must comply with the insurance requirements specified in Article 11 of the Regulation and in Regulation (EC) No 785/2004
Applicant must comply with the provisions on good repute specified in Article 7 of the Regulation

AOC vs AOL — Key Distinction

	AOC	AOL
Purpose	Technical and safety certification	Commercial operating licence
Focus	Equipment, personnel, safety systems, and procedures	Business structure, ownership, financial viability, insurance
Prerequisite	None (but AOL cannot be obtained without it)	Valid AOC required
Issued by	Civil Aviation Directorate (CAD)	Civil Aviation Directorate (CAD)

Acumum Advisory’s Aviation Advisory Services

Advising aircraft owners, operators, lessors, and financiers on all aspects of Maltese aviation
Assisting in the set-up, financial operation, and administration of an AOC
Managing aircraft transactions, including sales, purchases, and financing arrangements
Handling the registration of private and commercial aircraft, jets, and helicopters
Drafting, reviewing, and negotiating aviation-related agreements, such as leases and mortgages
Assisting with applications for AOCs and AOLs
Managing structures for VAT and tax planning optimisation to leverage Malta’s fiscal benefits

If you would like to know how Acumum can assist you,