Maltese Limited Partnerships, Everything You Need to Know

Maltese Limited Partnerships, also known as a partnership ‘en commandite’ (or Malta LP), are providing a practical and secure method of yacht ownership.

Malta LPs offer the same limited liability advantages that a limited liability company does. However, they also provide transparency and so protection from benefit in kind taxes, which may otherwise be due in many European countries if the traditional limited liability company is used.

Here Sarnia Yachts give an insight into the world of Malta Limited Partnerships.

How is a Malta Limited Partnership (Malta LP) Structured?

A Malta LP has at least two partners, one of whom will be the general partner.

The general partner has the same liability as that of a sole trader, but the limited partner(s) will have limited liability to the Partnership’s assets.

When structured correctly Malta LPs can give the same desired full limited liability that a company can provide. Additionally, these partnerships carry the same legal personality as limited liability companies.

Why are they Beneficial to Yacht Owners?

Traditionally limited liability companies have been used for the ownership of commercial or pleasure yachts. However, depending on the ultimate beneficial owner’s (UBO) tax residence, a Malta LP can provide advantages concerning benefit in-kind taxes.

Structured properly, a Malta LP can:

• Mitigate any fiscal complication that may arise with benefit in kind (compared to a limited liability company which can aggravate the benefit in kind position)

• Offer flexibility for multiple ownership and efficiencies in yacht administration.

Malta LPs and Tax

From a Maltese fiscal position, a Malta LP can be taxed as though it were a company at 35% on taxable profits. Meaning non-Malta resident UBOs will be able to claim for a rebate of 6/7ths of the tax paid.

Alternatively, if it qualifies, the Malta LP can opt for the tonnage tax regime. Allowing the partnership to pay a flat annual amount as tonnage tax, therefore, being exempt from any other income tax.

Tonnage tax typically ranges from €500 to €2,500 but does depend on the structure or vessel flag weight.

Ultimately the choice of an owning entity depends on a multitude of factors, and the individual’s circumstances.

At Sarnia Yachts we work with many tax advisors in numerous jurisdictions looking at solutions for clients.

If you would like to discuss these ownership options with us, please contact
Bruce Maltwood on +44 (0)1481 754 851 or Patrick Spiteri on +356 2124 0806.