Asset Leasing & Yatching
Asset Leasing

In an asset leasing structure, the type of asset can be an aircraft, ship, yacht or similar.  In this case:

  1. The foreign shareholder will transfer the asset to the Malta holding company;

  2. The Malta holding company will then pass the asset to the Malta operating company;

  3. The Malta operating company will then lease back the asset to the foreign shareholder or other group entities.

Lease payments received by the operating company would result in an effective tax rate of 5%.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yatching

In addition to the asset leasing potential tax advantage, in case of yatchs, there is also the possibility to reduce the VAT from 18% to 5.4%.

 

Continuing with the asset leasing example, the Malta operating company:

  • will purchase the yacht (at this stage no VAT is paid);

  • lease out the yacht to the client – subject to VAT at a reduced percentage depending on size of yacht (minimum 5.4% VAT instead of the standard 18%).

 

In these case, the following conditions must be satisfied:

 

  • Client is to be the sole shareholder of the Malta operating company;

  • Malta operating company is to have sufficient equity to purchase the yacht;

  • Lease must be subject to the following conditions:

    • No longer than 36 months;

    • Repayments must leave a profit in hands of the Malta operating company;

    • Yacht should be sold to the shareholder at the end of the lease.

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