A company registration in Switzerland can be either Gesellschaft mit beschränkter Haftung (GmbH) or Societé à Responibilité Limité (SARL) – basically a private limited liability company; or Aktiengesellschaft (AG) or Societé Anonyme (SA). The client chooses their preferred canton and company name. A company name availability check is carried out with the Switzerland Federal Registry. The Swiss authorities reserve the right to approve the name of the company prior to registration to ensure the uniqueness of all company names. If your preferred choice of company name is available, it will be reserved for you. The company memorandum and articles of association and other documentation are prepared, and a Swiss bank account opened in the name of the proposed company. The shareholders then transfer the capital to the bank account. The bank will then ‘freeze’ this capital for a few days and issue a certificate to the notary confirming that the capital has been deposited. The notary then proceeds to register the company at the Commercial Register. The capital is then ‘unfrozen’ by the bank and is immediately available for the company’s use. The Commercial Register then issues the relevant documents of incorporation and the company registration process is complete.

The registration of aircraft for both private and commercial use with the Civil Aviation Directorate within Transport Malta, can be exercised by any of the following:

• an owner of an aircraft;
• an owner of an aircraft under construction;
• an operator of an aircraft under temporary titles;
• a buyer of an aircraft authorized to operate the aircraft;
• a trustee for the benefit of beneficiaries.

A Maltese citizen or other person from EU is allowed to operate an aircraft. In order to register an aircraft in Malta, one must obtain an Air Operator’s Certificate (AOC). An owner who wishes to operate an aircraft for commercial purposes has to certified and licensed by the Civil Aviation Directorate within Transport Malta. To carry out any form of commercial activity within the EU, aircraft owners must be in possession of:

• Air Operator Certificate (AOC) – necessary for an air transport organisation to carry out any air service within the EU;
• Air Operator License (AOL) – AOC holders must also possess an AOL, permitting them to provide air services as stated in the operating license, e.g., to carry by air passengers, mail and/or cargo for remuneration and/or hire. AOL is valid within the EU, the EEA and Switzerland.

The Maltese VAT guidelines address scenarios where a Maltese company purchases an aircraft and enters into a lease agreement of the aircraft with a third party. The aim of this structure is to enable owners to pay VAT on their private jet calculated on the percentage of the time that the aircraft is used within EU airspace. In accordance with Malta’s VAT legislation, the lease by a person established in Malta of an aircraft used purely for private purposes constitutes a taxable supply of a service taking place in Malta when the aircraft:

• is put at the disposal of the customer in Malta;
• is leased for a continuous period of not more than 30 days;
• is leased for a continuous period exceeding 30 days to a person established in Malta.

To be eligible and qualify for the VAT on aircraft leasing, the following criteria must be met:

• the lessor must be a company registered in Malta for the purpose of acquiring the aircraft;
• the lessor must be registered with the Malta VAT Department;
• the lessee is not eligible to claim input VAT;the lease agreement cannot exceed 60 months;
• the lease payments must be paid monthly;
• the lease agreement must obtain approval and confirmation from the VAT Department.

Maltese VAT at 18% will be charged on the portion of the lease covering effective ‘use and enjoyment’ of the aircraft within EU airspace. The minimum percentage of time that an aircraft could be deemed to be in EU airspace is 30%, thus resulting in a minimum effective rate of VAT of 5.4%. If the lessee decides to purchase the aircraft at the end of the lease, a VAT paid certificate will be issued by the Malta VAT Department.

Where finance leasing arrangements of aircraft do not fall within the scope of Legal Notice 369 of 2005, the Office of the Commissioner for Revenue has decided that in such special case of the finance leasing of aircraft, the following tax treatment is to be adopted for each year for the duration of the finance lease:

• the lessor is charged to tax on the annual finance charge, namely the difference between the total lease payments less the capital element divided by the number of years of the lease;
• the lessee is allowed a deduction in respect of the (i) the finance charge; (ii) maintenance; (iii) repairs; and (iv) insurance;
• the lessee is allowed capital allowances in respect of the aircraft and the parties may not opt to shift the burden of wear and tear onto the lessor;
• where the lessee exercises an option to purchase the aircraft on the termination of the finance lease, and the lessor is not trading in the purchase and sale of aircraft, the purchase price received by the lessor shall be considered to be of a capital nature and no tax thereon shall be payable by the lessor.