Like ships, registered aircraft take the nationality of the flag state. To register aircraft in the US, the beneficial owner must be a US citizen as defined in USC 4012(a)(15). US corporations are caught by the same provision. Where a US Corporation has merged with or been acquired by a non-US corporation, it must be able to prove that it flies at least 60% of the time within the US. If not, either it establishes an owner or voter trust or it moves to offshore registration. Generally, with offshore registration, there is no requirement to be based or used in the country of registration.
EU VAT at 20+% on an aircraft’s value can represent a lot of money. Depending on the residence of the owner and where the aircraft is operated, there may be tax advantages in offshore registration. Of course, it is important to do this in a jurisdiction that does not itself impose levies. In the Cayman Islands, there is no VAT, income, profit, sales or use tax.
It is likely that a US registered aircraft that is US manufactured will become subject to US jurisdiction regardless of where any accident or incident takes place. This could expose the owner to US litigation and the potential for punitive US judgement awards. Owners should consult their own liability counsel to determine whether, in their individual circumstances, there is a potential to mitigate liability exposure through offshore registration.
In some parts of the world, a US registered aircraft can be seen as a target. In such circumstances, a more neutral nationality could be vital in protecting both passengers and crew. Thus, the added security from protective flagging can be a very important consideration.
Aircraft maintained to FAA standards and in a condition that warrants issue of a US Certificate of Airworthiness may be imported and re-registered in the US.
Insurance for Cayman registered aircraft is easy to obtain. Under our insurance licence, we can arrange coverage at competitive rates in different jurisdictions, depending on the needs of the owner.
The application process can take two to three weeks. Cayman’s Civil Aviation Authority performs an airworthiness inspection at the place where the aircraft is located so it does not have to go to the Cayman Islands for inspection.
The regulatory body is the Civil Aviation Authority of the Cayman Islands, “CAACI”.
Each applicant for the issue of a Certificate of Airworthiness shall provide a valid Export Certificate of Airworthiness issued by either of the following authorities: FAA, Transport Canada, JAA or EASA. See table below showing JAA and EASA member states. If an Export Certificate of Airworthiness is not provided from any of the above authorities, an equivalent document consisting of a “Compliance Record for Imported Aircraft” may be accepted.
Aircraft operated in the Private Category must not be used for commercial operations, which are defined as those being for “hire or reward” [OTAR Part 125].
For commercial operations, an Air Operator Certificate (AOC) must be obtained [OTAR Parts 121 and 135].
Other than aircraft based in the Cayman Islands, it is the CAACI’s policy only to accept aircraft exceeding 12,500lbs/5,700kg MTOW [Maximum Take-Off Weight]. An exception may be made for helicopters based on Cayman registered yachts.
The first step in the registration process is the application to register. CAACI provides a list of technical forms be completed and submitted. Scanned or faxed copies of most application forms are acceptable for initial processing. However, originals must also be delivered in due course so they can be placed on the CAACI files. The exception to this is crew certification where certified hard copies of documents must be submitted before validations can be issued.
Upon submission of the application to register, the desired registration mark can be requested and reserved. If a specific registration mark is not desired, the next mark in sequence will be assigned.
For private aircraft, upon receiving an application to register, CAACI will commence a financial and legal “due diligence” assessment to determine if the aircraft/owner is acceptable for the Registry.
In order to assist and expedite this process, the Registry’s “Due Diligence Checklist” should be completed and the associated documentation submitted as soon as possible. Once the due diligence process is completed successfully, an advice of formal acceptance to be registered will be issued by the Director-General of Civil Aviation.
To proceed beyond the due diligence phase, the registry requires a deposit of 50% of the cost of the Certificate of Airworthiness. Following receipt of funds, the CAACI will schedule an airworthiness survey. This will be conducted by a CAACI surveyor and normally takes two days to complete on-site with the aircraft.
Assuming that the airworthiness survey is satisfactory, the surveyor will make a recommendation to issue of the Certificate of Airworthiness. Once the CAACI receives an Export Certificate of Airworthiness or equivalent document from the existing state of registry, the de-registration process can be initiated.
Deregistration of the aircraft from the state that the aircraft is being transferred from should not be commenced until the Due Diligence process is completed by the CAACI and notification has been received that the aircraft has been accepted for placement onto the Cayman registry. In most cases, the aircraft should also not be deregistered until the aircraft survey by the CAACI has been completed successfully.
It is important to note that an aircraft cannot be flown once it has been deregistered from the exporting state until it is registered in the Cayman Islands and issued with a Certificate of Airworthiness and all associated documents. In certain circumstances, a Special Flight Authority can be issued for deliver or test-flight purposes after the Certificate of Registration is issued but prior to issue of the Certificate of Airworthiness.
Upon receiving notification from the existing State of Registry that the aircraft has been removed from their register, a Cayman Certificate of Registration, Certificate of Airworthiness and all associated certification documents can be issued.
Statutory mortgages may be recorded on Cayman Registered aircraft at the time of registration or any time thereafter. Government fees were reduced significantly in 2011to bring them in line with competitors and are now relatively reasonable.
The following documentation will be issued by the CAACI as part of the certification process:
Certificate of Registration
Certificate of Airworthiness
Acceptance of Maintenance Arrangements
Maintenance Schedule Acceptance
Radio Station Installation Approval
Designated Airspace Approval
Pilots: License Validation Certificates
If you have questions or wish to proceed further, contact us.
The Joint Aviation Authorities (JAA) was an associated body of the European Civil Aviation Conference (ECAC) representing the civil aviation regulatory authorities of a number of European States who had agreed to co-operate in developing and implementing common safety regulatory standards and procedures. This co-operation was intended to provide high and consistent standards of safety and a “level playing field” for competition in Europe. Much emphasis was placed on harmonising the JAA regulations with those of the USA.
JAA’s early objectives included co-operation with the European Aviation Safety Agency in accordance with an agreed programme to ensure the involvement of the JAA non-EASA countries. The aim was to maintain the present unity in regulations on a pan-European dimension and the mutual acceptance/recognition of certificates/approvals.
With the adoption of Regulation (EC) No. 1592/2002 by the European Parliament and the Council of the European Union, a new regulatory framework was created in European aviation. The regulatory body was called the European Aviation Safety Agency (EASA). Its member states comprised EU, EEA and Switzerland, i.e. EU states + Norway, Iceland, Liechtenstein and Switzerland.
According to this Regulation, for EU Member States, national regulation in the airworthiness domain was replaced by EU Regulation. Accordingly, certification tasks were transferred from National Authorities to EASA. Non EU States maintain their national responsibility in all fields.
In November 2005 the EU Commission began the legislative process to amend EASA Regulation (EC) 1592/2002 to extend the competences of EASA into the fields of operations and licensing.
Based upon a decision of ECAC’s DG’s in adopting the FUJA II Report it was decided to disband the JAA system with effect June 30, 2009 and to keep the JAA Training Organisation running.
Under FUJA [Future of JAA] a set of options for the future of JAA/EASA relations was discussed during the ECAC’s fifty-first special Meeting of Directors General of Civil Aviation (DGCA) in Yalta, from 30 August to 2 September 2002. This established the best arrangement [Option 3] under which the regulatory and certification activity would be conducted within the EASA system but with transparency to non-EASA Member States for their decisions.
Thus, whilst the EASA regulated EEA territories plus Switzerland, regulation applicable to the remaining JAA states was maintained in synchrony with EASA. The transition process continued for about seven years until 2009. http://www.jaa.nl/fuja/fuja.html.
Currently, EASA requires any aircraft operating in any of the EASA territories to demonstrate compliance to ICAO standards [International Civil Aviation Organization]. The ICAO is a UN organisation, similar to the IMO for shipping. It has 195 member states that include the USA, Canada, and all member states of JAA and EASA.
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