Aviation Services

There are many advantages to the holding of aircraft in a foreign country. Apart from the potential tax benefits of registration in a low or no tax country foreign registration may allow a greater freedom of movement and other commercial freedoms. Registration of aircraft on a foreign registry may be possible either freely or may require some local presence such as a resident agent and the registration of a foreign company. Some countries apply limits to the registration of aircraft and may prohibit the registration of commercial aircraft altogether. Registration requires the payment of a fee usually based on the operation and size of the aircraft. In the case of both pleasure and commercial aircraft the cost of registration and any ongoing renewal charges vary from country to country.

The principle taxation benefits applicable to foreign registration for commercial aircraft are a reduced rate of income tax over commercial operations (in many cases no tax will be charged). There may also be other benefits in connection with provisions for offsetting capital depreciation of aircraft against chargeable income.


Value Added Tax Reduction Scheme (European Union Only)
The operating of both pleasure and commercial aircraft within the European Union (EU) may amount to an importation for VAT purposes. In most cases VAT will need to be paid over the value of the aircraft on construction or importation. The applicable rate varies from state to state but is likely to be around 20% which in the case of a pleasure aircraft will be a cost. There are a number of government VAT schemes offered by member states to reduce the rate of tax to as little as 3.4%. Where these schemes operate is listed in the country specific section of this product.

Ancillary Services
Aircraft registration requires the support of a number of industries connected hangering, management, chartering, insurance, loan financing etc. If any of the above services are going to be used in the country where the aircraft is registered it is important to consider the quality of the local infrastructure, the availability and cost of resources including human resources.

Factors Affecting Choice of Country
The main considerations affecting choice of country will be based on local tax rates, registration costs and what restrictions are placed on the registration of aircraft (such as restrictions on what types of aircraft can be registered). Consideration may also be given to whether the aircraft has to visit the country where it is registered, the reputation of the country where the aircraft will be registered and any restrictions on the movement of aircraft once registered.