Recent Initiatives boosting the Aviation Industry - KPMG Malta
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Recent Initiatives boosting the Aviation Industry

Recent Initiatives boosting the Aviation Industry

This is an outline of the salient recent amendments aimed at improving Malta’s attractiveness in the aviation industry.


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Growing the local aircraft register appears to be the main target of recently introduced amendments to Maltese aviation law, undoubtedly with the intention to mirror the success of the local shipping register. This publication provides an outline of the salient recent amendments aimed at improving Malta’s attractiveness in the aviation industry through a number of changes that albeit not solely centered on aviation nonetheless should assist in catering for a diversified industry by widening access to courts, improving available remedies, refining the registration process and extending benefits. Overall, this has had a positive impact on Malta's trusts.

Flexibility to Contract

Flexibility has been introduced by means of amendments allowing promises of sale and leases of aircrafts to be regulated solely by means of private agreement. Moreover, the well-known restrictions to charging of and the compounding of interest have been excluded from applying to debts and other obligations secured by mortgage or due under a lease of an aircraft or aircraft engine whether registered in Malta or otherwise – as the legislator has acknowledged the importance of adapting to the sector and the attractiveness of contracting out of certain standards, thereby establishing a relationship where negotiation rules. 

Extension of Jurisdiction

Although not in itself of exclusive benefit to aircraft owners, an advanced civil law framework catering for remedies is definitely to be coveted and essential for the jurisdiction to be promoted as an alternative to leading domiciles. Thus recent amendments have extended the jurisdiction in rem of the Maltese courts to cover aircraft engines which may now be the subject of precautionary and executive warrants issued by creditors to safeguard their rights. 

Fiscal Benefits to Qualifying Employment

An extension of the qualifying benefit period by four or five years up to a maximum of ten years has been made, thereby assisting operators in the industry to attract the right professionals with the required skill-set. 

Finance Leasing Licensing Exemption 

Entities established or operating in Malta carrying out finance leasing activities will henceforth be exempt from licensing requirements where owned, or are subsidiaries of or are exclusively funded by professional clients or persons recognized as eligible counterparties (such as investment firms, UCITS, pension funds, insurance companies and credit institutions) in accordance with article 30 of Directive 2014/65/EU of the European Parliament.  Such amendment aligns the law with the obtaining practice where a licence was usually not required in the covered instances, as the regularity that necessitates licensing as implied by law was rarely fulfilled by vehicles holding one aircraft. 


The above-mentioned selected amendments convey the administration’s commitment to the journey it embarked upon in 2010 with the enactment of the Aircraft Registration Act. Flexibility, beneficial conditions and a sound legal framework are most definitely criteria on top of the list of any investor seeking to identify the best domicile. However, although certainly steps in the right direction, the latest amendments should be seen simply as yet another in a series of steps where Malta follows in Ireland’s footsteps as an ideal location for the aviation industry.

© 2019 KPMG, a Malta civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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