Q: Can a foreigner own an American registered aircraft?
Yes. The general rule is that only US citizens and green card holders can own American registered aircraft. However, there are three exceptions to this rule:
1. Foreign corporation – if the aircraft will be flown at least 60% of its flight time in America it can be registered to a US corporation which is foreign owned provided that regular returns are filed with the FAA proving its flight time in America.
2. Owner Trust – If the aircraft is settled in trust with a US trustee it may be beneficially owned by a foreign person or company.
3. Voting Trust – If a US corporation is structured so that not less than two thirds of the Directors and Officers are US citizens and not less than 75% of the voting rights in the shares of the corporation are settled in trust then that corporation can be the registered owner of a US aircraft and may be owned by a foreigner.
Q: What is a Trust?
A Trust is quite simply an agreement between one person (the settlor) who gives to another person (the Trustee) an asset, in this case an aircraft, to hold on certain terms. In the case of an Owner Trust the aircraft is typically held solely for one beneficiary which is the settlor. The reason that a Trust is required by the FAA is that in this way they can ultimately control the aircraft through their US Citizens who are the registered trustees of US registered aircraft.
Q: Owner Trust or Voting Trust?
This will depend upon the beneficial owner’s circumstances and on which we are happy to advise. Usually Owner Trusts are more suitable for owners of one aircraft and also for businesses seeking to recover capital allowances and tax relief. Voting Trusts are commonly used by aircraft dealers and in complex financing transactions.
Q: Can the US Trustee sell or mortgage the aircraft?
Yes. In fact the US Trustee has all the rights and powers of an owner and can sell or mortgage the aircraft subject always to the terms of the Trust agreement between the Settlor and Trustee. It is a requirement of the Federal Aviation Regulations that the power of the trustee cannot be “fettered” by the beneficiary. This dilemma can be solved where the Registration Company has adequate fidelity insurance cover. This particular type of insurance will protect the beneficial owner in the event that the Trustee commits a breach of trust and sells or mortgages your aircraft without permission. It will also cover the situation where, as has happened in the past, an individual Trustee has simply gone away.
Q: How do we protect you?
We take the following steps to minimise your risk and maximise your security:-
1. We are a professional Registration Company specializing in the registration of US registered aircraft for foreign owners. We probably have more experience in this field than any other business.
2. With the exception of dealers’ aircraft, all aircraft under our administration are registered to individual owner trustee corporations. This is important because the Trust agreement which the beneficial owner of the aircraft will have to sign will include indemnities in the event that the trustee is sued. Where an individual or a Trust company which registers itself directly as the owner of the aircraft is sued then they will claim against you under its indemnity. Where the Trustee is a separate trustee corporation for your use only, then you get the added protection of being able to rely on its limited liability for your protection.
3. We carry a substantial level of professional indemnity and fidelity insurance.
4. Through our efficiency of service we ensure that the aircraft you purchase is registered on the American Register in the quickest possible time thereby allowing you to fly legally outside of America.
5. We ensure that you have not just the trust and registration documentation but also all ancillary documents required to legally operate the aircraft internationally including a radio station license.
6. All State and Federal government documentation received by our Delaware registered agents is forwarded promptly.
Q: What does it cost?
There are four charges depending upon whether the aircraft is a single engine, twin engine, turbine or high value turbine.
The annual administration fee is payable in advance and therefore the initial cost including the first year’s administration will be £1,800.00 for a single engine aircraft, £2,550.00 for a twin, £3,175.00 for a turbine and £3,850 for an aircraft of over $2 million.
Q: Are there any other Charges ?
The Federal Communications Commission charge a radio station licence fee of $105 for each aircraft. If the pilot needs a restricted radio telephone operator permit the FCC charge an issue fee of $55. We will apply for both the licence and permit and make no processing charge.
We charge £300 for handling the sale of an aircraft including the issue of a bill of sale and dissolution of the trustee corporation. Should a beneficial owner wish to transfer ownership of the aircraft under an existing trust we charge the purchaser £500 for dealing with the transfer.
We have no other foreseeable charges.
Q: Why is there an annual administration fee?
To cover annual running costs in providing a Trustee corporation. These include the cost of directors’ fees, registered agent charges, state franchise tax, professional indemnity and fidelity premiums, filing of federal tax returns and the like. These charges are all included within the annual administration fee.
Q: I have heard it can he done for just a few hundred pounds?
No. It is not possible to provide a sole purpose trustee corporation at this rate. Although any American can put himself forward as a trustee, usually all you can expect is an American citizen with no qualification acting in his individual capacity as trustee.
Q: Why is this dangerous?
There are a number of reasons
1. Some of these individuals have not registered aircraft correctly resulting in prosecution and revocation of registration certificates.
2. Should the individual trustee be sued he would not be able to rely on the limited liability protection offered by a trustee corporation and would be compelled to sue the beneficial owner.
3. At such rates it would not be possible to obtain a temporary registration certificate which is required in order to operate an aircraft immediately outside of the US following purchase.
4. Most European Union member states are in the process of enacting trust laws for the protection of beneficiaries and this will drive unqualified operators out of business.
Q: Does the Trust need to be administered offshore?
No. The trusts which hold title to US registered aircraft are fiscally neutral (neutral for tax purposes) and there are no tax advantages in being administered offshore. In the past, one advantage of offshore administration was confidentiality, but since the Organisation for Economic Cooperation and Development (OECD) imposed its requirements on offshore centres, there is a growing exchange of information in respect of specified crimes such as tax evasion and money laundering.
At Aircraft Registrations Worldwide LLC we preserve client confidentiality to the maximum extent permitted by law and will only release information with our client’s permission or by court order.
Q: Why Aircraft Registrations Worldwide LLC Registrations?
1. Over 15 years experience of registering aircraft on the US aircraft register for non US owners
2. Service by pilots for pilots
3. Chief Aviation Legal Counsel available to provide technical support on registration, licensing and certification
4. Extensive network of professional advisers available to clients globally
5. No charge for processing FCC permits and radio station license
6. Personal and attentive service
7. Service outside usual office hours
8. Transparent prices with no hidden extras
9. Administrative office at airport with easy access
10. No charge for providing technical support
11. Extensive network of aviation contacts
12. Clients receive our highly regarded and informative Newsletter dealing with issues specific to foreign owners of N registered aircraft
13. We act for most of the UK banks financing N registered aircraft, aircraft manufacturers’ franchises, aircraft dealers and brokers and many other aviation businesses worldwide.
Q: I want to buy an aircraft. What information do you need?
Please complete the Registration Form and email, fax or post it to us. Upon receipt we will immediately prepare the registration papers
Q: I want to transfer the administration of my existing trust. What do I need to do?
Please complete the Registration Form and email, fax or post it to us. Upon receipt we will contact the administrator of your present trustee and prepare the necessary trust and registration papers
Q: Is there more information about the US register?
We have written several articles about aircraft registration. If you would like to know more about this subject we would be delighted to send you copies.