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Pros and cons of offshore business jet registration

Anastasia Dagaeva
November 7, 2017
There are more than 21,000 business jets worldwide registered in 50 countries, according to Jetnet. Almost 70% of the entire fleet is N-registered (USA). The list also contains offshore territories. Some 2,000 private jets are registered there in 11 primary registries — Aruba, the Bahamas, Bermuda, the British Virgin Islands, Guernsey, Jersey, Malta, Mauritius, also the Cayman Islands, San Marino and Isle of Man, the Aviation Week reports. 

The offshore registration history began almost 60 years ago when the Cayman Islands started providing its registration. The Cayman Island registry is currently 184 executive jets and 16 helicopters. Most of the airplanes are medium-to-large VIP cabin. The Isle of Man opened its registry doors just 10 years ago. Today, its the world’s 6th site by number of aircrafts registered — currently 450 private airplanes.  

Most of these places are easily accessible to clients from both the US and Europe — two major markets for business jets. Aruba, Bermuda, the Bahamas and the Cayman Islands are all spread over the Caribbean and the South Atlantic and within easy reach of clients based in the Americas. The Isle of Man, Jersey and Guernsey are in the Irish Sea and La Manche, and within an hour or two flight to majority of European clients. Malta and San Marino serve clients from around the Mediterranean and Middle Estern regions. Mauritius, located in the Indian Ocean is within the reach for clients from the Middle East, India and Africa. 

Since 2002, the amount of offshore-registered business jets has doubled — hitting the 2000-mark recently. The global offshore registry continues to grow, due to a variety of factors — global economic expansion, more aircraft potential owners picking the best ownership plans, also more government fleets entering the offshore registration zone. 

Offshore registration allows the owner to form a corporation in the registering entity in order to own and fly the airplane without any requirement that the jet has to be based in and only used there. 

Offshores also help to get rid of taxes. That’s the Russian way. The are 400-450 airplanes worldwide that are directly on indirectly owned by Russian corporations and individuals. Approximately 95% of Russian-owned aircrafts are not registered in Russia. And there’s a good reason. The VAT applied to foreign-made airplane imported to Russia is a hefty 18% of the customs-declared value, no small amount even for a rich Russian oligarch when applying the VAT to the $67 million price of a Gulfstream G650. 

By contrast, relatively few American owners and operators replace an «N» registration for something different. One reason is simply the price. Registering with the FAA costs $5 — no doubts, one of the best price tags in aviation. 

Cost structures vary for every registry. The cost of registry in the Isle of Man, for example, starts with $388 and the next major expense is approximately $129 per 500 kg maximum take-off weight (MTOW) of the airplane registered. For Malta, it costs $468 to register and $25,909 to obtain an Air Operator Certificate for a Gulfstream G280 with an MTOW of 16,080 kg. 

Being anonymous  and private are among the reasons for going offshore-bound. Still, there no full secrecy — faced with a determined investigator, registers will not guarantee anonymity. For an experienced person, there’s a little an owner or operator can do to guarantee 100% anonymity and security from flight tracking and ownership check, no matter  where the aircraft is registered.

However, offshores allow to choose almost any desired registry number. While registry prefix numbers or letters are nationality neutral, some creativity, and ego find its place when the plane is registered. There are Malta-registered jets: 9H-ERO and 9H-AIR, the Isle of Man makes available M-YOIL, M-IDAS and M-YWAY. From Bermuda registry there are VP-BOS and VP-CEO. These registry numbers sometimes unmask the real owner, representing his initials or a company owned or operated. 
Photos: Dassault Aviation