News & Insight Open Menu

Maltese Limited Partnership en Commandite

posted by Darryl Sharman

Maltese Limited Partnerships provide a practical and secure method of yacht ownership. Offering the same limited liability advantages of a limited liability company whilst also providing transparency and therefore protection from benefit in kind taxes. These taxes may otherwise be due in many European countries if the traditional limited liability company is used.

What Liability does a Limited Partnership Carry?

Malta offers a limited partnership - the Malta LP - also known as a partnership ‘en commandite’, which 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) have limited liability to the partnership’s assets.

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


Which is More Beneficial to Yacht Owners?

Traditionally limited liability companies are utilised for the ownership of yachts whether used for commercial or pleasure purposes. However, depending on the ultimate beneficial owner’s (UBO) tax residence a Limited Partnership can provide advantages in relation to benefit in kind taxes.

Structured correctly, a Limited Partnership can mitigate any fiscal complication that may arise with benefit in kind, opposed to a limited liability company which can aggravate the benefit in kind position.

A Limited Partnership also offers flexibility for multiple ownership and efficiencies in yacht administration.


Can a Limited Partnership be Taxed?

From a Maltese fiscal position, yes, a Limited Partnership can be taxed as if it is a company at 35% on taxable profits, this allows non-Malta resident UBOs to claim for a rebate of 6/7ths of the tax paid.

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

The amount of tonnage tax typically ranges from €500 to €2,500 but can vary depending on the structure or vessel flag weight.

The ultimate choice of an owning entity depends on a multitude of factors, and each's own personal circumstances.