Short FAQ on Registering an Aircraft in the United States

April, 2009

1. Can a company organized outside the U.S. register a corporate jet in the U.S. in its name?

Generally, a corporate jet may be registered in the U.S. only when the corporate jet is owned by a U.S. citizen. Per United States Federal Aviation Regulation (FAR) 47.2, with respect to an entity, U.S. citizen is defined as a corporation or association created or organized under the laws of the United States or of any State, Territory, or possession of the United States, of which the president and two-thirds or more of the board of directors and other managing officers thereof are such individuals and in which at least 75 percent of the voting interest is owned or controlled by persons who are citizens of the United States or of one of its possessions. See #2, the Owner Trust FAQ, for an alternative if the entity does not meet this definition.

2. Is there a way to register a corporate jet in the U.S. if the company does not meet the FAA’s definition of U.S. citizen, such as utilizing an Owner Trust?

If an entity does not fit the FAA’s definition of U.S. citizen eligible to register a corporate jet in the U.S., the owner may place the corporate jet in a trust (commonly known as an “owner trust”) and have the corporate jet registered with the FAA in the name of the trustee (commonly called the owner-trustee). The owner trustee holds legal title to the corporate jet. There are several entities which routinely act as owner trustee for aircraft in the U.S.

The owner enters into a Trust Agreement with the owner trustee and the Trust Agreement is recorded (becomes public record) with the FAA. Each trustee must be either a U.S. citizen or a resident alien, and they must submit to the FAA a copy of each document affecting a relationship under the trust. There are additional requirements for an affidavit from each trustee. Persons who are neither U.S. citizens nor resident aliens may not have more than 25 percent of the aggregate power to direct or remove a trustee, either directly or indirectly; however, those persons may have more than 25 percent of the beneficial interest in the trust.

3. Do the same registration requirements exist for corporate jets operated in a fractional program?

Yes, registration requirements for corporate jets are the same, whether they are operated under Part 91, Subpart K of Part 91 (fractional rules) or Part 135. There are operational differences that may affect the way ownership is structured.

It is helpful to have an understanding of these and other issues which can arise with the registration of aircraft in the U.S. Consider involving an attorney with aviation expertise when addressing aircraft registration and other issues involved with structuring the ownership and operation of a corporate aircraft.

Michelle M. Wade and Dillon L. Strohm are attorneys with the law firm of Jackson &Wade, L.L.C. and counsel clients on the acquisition, financing and operation of corporate jets operated under Part 91 and Part 135 of the Federal Aviation Regulations. Jackson & Wade, L.L.C. can be found at www.jetlaw.com.