Commercially, a bareboat charter transaction takes the form of a lease agreement for a fixed period by virtue of which the lessee acquires complete control and possession of the ship for the duration of the lease, and this transaction is legally formalised through bareboat charter registration. Such transactions are opted for a plethora of reasons which include subsidies or certain cargo reservations which are offered by a particular state at a particular time, and also to lower crewing costs.  Bareboat charter registration is also advantageous for the jurisdictions allowing it, ensuring training and employment of local seafarers, acquisition and know-how and expansion of the national fleet without a drain on financial resources.

'Bareboat charter registration' describes a situation where a vessel is chartered and registered by one State in the name of the charterer or ship management company.  Maltese law defines bareboat charter registration as "the registration of a ship in a bareboat charter registry under the name of the charterer." In turn, the Bareboat Charter Registry is defined as "the register of the state whose flag the ship is entitled to fly during the period in which the charterer is registered as the bareboat charterer."

Bareboat charter registration is available for both the registration of foreign ships under the Malta flag and the registration of Maltese ships under a foreign flag. The charterer, which acts as the 'temporary owner' has the right and obligation to fly the flag of the charterer. During that period, the vessel loses the right to fly the flag of the owner's State, but the latter becomes fully effective once again upon the termination of the charter-party. Maltese law stipulates that during the time a Maltese ship is bareboat-charter-registered in a foreign registry, such vessel shall not hoist the Maltese flag, and the home port of such ship shall be that of the bareboat charter registry.

The main principles of bareboat charter registration under Maltese law are the following:

• The compatibility of the Bareboat Charter Registry with the registry in which the owner of the ship is registered as owner ("hereinafter referred to as the "Underlying Registry") and to which jurisdiction and control will revert upon termination of the bareboat charter registration.
• Matters in relation to title of the vessel, mortgages and encumbrances are vested in the Underlying Registry, and may not be registered with the Bareboat Charter Registry.
• The operation of the ship falls under the jurisdiction of the Bareboat Charter Registry, hence any vessel which is bareboat-charter-registered in Malta is deemed to be a 'ship' as defined under the Merchant Shipping Act, falling under the jurisdiction and control of Malta and must comply with laws applicable to Maltese ships.

Under Maltese law, a bareboat charter registered in Malta, shall be registered with the name under which it is registered in the Underlying Registry as long as the name is not already the name of a registered Maltese ship or a name so similar as to be calculated to deceive. Legal notice 210 of 2016 made it possible to give a different name to a bareboat charter registered in a foreign registry, from the one registered in Malta as the underlying registry, provided that consent is given by the Registrar General, the registered owners and the registered mortgagees, if any. This helps differentiate the ship from its Underlying Register, not only from the different flag it flies but also by the name it uses to in trading.

A bareboat charter must be registered in Malta for a period not exceeding the duration of the bareboat charter or the expiry date of the underlying registration, whichever is the shorter period, but in no case can this registration's duration be longer than a two-year period. Nonetheless, Maltese law provides for the possibility to extend the registration for further periods of two years. 

A ship may be bareboat-charter-registered in Malta as long as it is a bareboat chartered to a body corporate, entity or such other person qualified to own a Maltese ship. Naturally, the ship should not be a Maltese ship, and neither should it be registered in another bareboat charter registry.  On the other hand, in order for a Maltese ship to be bareboat-charter-registered under a foreign flag, it must be a ship registered under the Merchant Shipping Act as a Maltese ship and the bareboat charter registry where it is to be registered is a compatible registry. The procedure for the registration of bareboat charter vessels is similar to that for ordinary registrations but there are some differences which include the application for registration by the charterer as opposed to the owner, and the making of a declaration of bareboat charter accompanied by the charter agreement. 

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