The Maltese Government has put forward Act No. I of 2025, a legislative initiative intended to strengthen Malta’s standing as a premier maritime jurisdiction. This proposed statute brings with it a host of reforms designed to modernise regulatory frameworks, promote efficiency, and ensure the nation remains aligned with international standards in the maritime sector.
Modernising Maritime Finance: Recognising New Lending Structures
Traditionally, maritime finance in Malta has been heavily reliant upon established European banking institutions. However, recent developments—particularly the tightening of financial regulations under Basel III and IV—have resulted in a reduction of risk appetite among traditional lenders for maritime ventures.
In response to this shift, alternative financial players, including leasing firms and investment funds, have begun to assume a more prominent role in ship financing. To address this evolution, the proposed Act introduces the concept of a “finance charter instrument,” which formally recognises financiers as a distinct category. This designation enables financiers to retain ownership of a vessel as a security measure, while operators make use of the vessel, potentially culminating in full ownership through progressive payments.
This new arrangement offers improved legal certainty and protects the interests of both lenders and operators.
Enhancing Seafarers’ Rights and Wage Protections
In line with Malta’s commitment to uphold the International Labour Organisation’s Maritime Labour Convention (MLC), 2006, the proposed amendments significantly improve the statutory rights of seafarers. One of the most noteworthy changes is the extension of the period in which seafarers may pursue claims for unpaid wages—from three months to twelve months. This change offers greater protection for maritime workers, particularly in circumstances where wage recovery has historically been challenging.
Transition to Digital Maritime Administration
A significant element of the legislative overhaul is the digitalisation of the maritime registry and administrative processes. The draft law seeks to phase out paper-based communication in favour of electronic systems, with the goal of enhancing accessibility, streamlining procedures, and reducing the scope for administrative error.
This initiative mirrors broader European efforts to digitise public administration, such as the EU Regulation 2016/1191, which removed the apostille requirement for specific public documents. The legislative framework is further supported by the eIDAS Regulation (EU No. 910/2014), which facilitates the use of electronic identification and trust services throughout the EU. These measures collectively lay the foundation for a more responsive and transparent maritime governance framework in Malta.
Strengthening Compliance with International Maritime Norms
Past audits—such as the 2019 Port State Control inspection—have highlighted compliance deficiencies, notably with regard to onboard safety equipment on Maltese-flagged vessels. The proposed reforms aim to address these issues by reinforcing adherence to international conventions, including the Safety of Life at Sea (SOLAS) Convention and other instruments under the International Maritime Organisation. This demonstrates Malta’s resolve to maintain high safety standards and regulatory compliance across its fleet.
Revising Ship Registration Requirements
In a move to align domestic regulations with contemporary shipbuilding practices, the proposed legislation removes the requirement for a vessel’s identification details to be physically engraved on the keel. This change reflects current construction methods and is expected to improve Malta’s attractiveness to international shipbuilders. In addition, the maximum permissible age for registering a vessel under the Maltese flag will be reduced from 25 years to 20 years. This policy is aimed at encouraging the registration of newer, more efficient, and environmentally compliant vessels.
Improving Administrative Efficiency and Governance
The legislative proposal reallocates certain decision-making powers from the Minister responsible for shipping to the Registrar-General. This decentralisation is intended to reduce bureaucratic bottlenecks, facilitate timely decision-making, and enhance operational flexibility. Such streamlining of authority is likely to improve investor confidence and foster greater trust in the Maltese maritime administration.
Further Noteworthy Amendments
The draft Act also includes a variety of supplementary provisions intended to reinforce the legal framework surrounding ship registration and finance:
- Requiring advance payment of registration fees to promote transparency and accountability.
- Streamlining the registration and indexing of mortgages over ships.
- Introducing detailed provisions for registering mortgages on vessels still under construction.
- Clarifying procedures for correcting registration inaccuracies and further defining the Registrar-General’s involvement in judicial sales of vessels.
These refinements are intended to improve both legal clarity and practical efficiency across multiple facets of maritime administration.
Conclusion
Through the proposed amendments encapsulated in Act No. I of 2025, Malta seeks to reaffirm its commitment to excellence in maritime governance. By modernising its legal structures, embracing digital transformation, and enhancing protections for industry stakeholders, Malta positions itself to meet the evolving challenges of the global maritime landscape. Stakeholders across the sector are encouraged to engage with the proposed reforms to fully understand the opportunities and responsibilities that will follow.
Vassallo Associates can advise on all aspects of Maritime Law. Contact us today to discuss your requirements.