Chinese ship leasing companies are moving toward more active financing for European vessel owners, using Malta as a jurisdiction and flag for bareboat charter deals.
What is changing in the leasing model
According to the materials, the companies are structuring long-term charter deals through special Maltese structures to reduce exposure to risks linked to ships directly associated with China. This is not a change in the economic substance of the deal, but in the legal and flag layer: the formal owner may remain a Chinese financial institution, while operational rules, crew requirements, and environmental compliance are tied to the Maltese system.
According to the materials, this helps convince European charterers, cargo owners, and banks that risk is reduced when working with Chinese tonnage, and it also simplifies compliance with certain tonnage-related tax regime requirements in EU countries.
Why Malta
Malta is becoming attractive due to its combination of flag, tax regime, and enhanced creditor protection. After amendments to the Merchant Shipping Act, the finance charter instrument (FCI) was introduced for deals structured as bareboat charter.
- The FCI allows charter hire debt and other payment obligations to be secured as a security interest directly attached to the vessel under the Maltese flag.
- In case of default or bankruptcy of the charterer, the lessor gets a legal pathway to reclaim actual possession of the vessel, not just rely on contract provisions.
- The instrument ranks behind registered mortgages and certain privileged maritime claims, but it still provides an additional layer of protection beyond the basic banking structure.
The materials state that, thanks to this, structures can more easily attract traditional bank financing for a vessel while simultaneously protecting the lessor’s interests in ownership rights.
Scale and participants
According to VesselsValue, about 130 vessels under the Maltese flag are effectively controlled by Chinese companies, and most of them belong to leasing institutions. Among those named are:
- Bank of Communications Financial Leasing
- ICBC Financial Leasing
- China Development Bank Financial Leasing
- China Merchants Bank Financial Leasing
It is also noted that the first company to apply the new instrument registered an FCI for two Maltese vessels shortly after the legal changes came into force.
GLOAPM.COM