Foreign ownership

[xavierde]

Hello,

I am closing a deal on a Mooney and just realized that US aircraft ownership for foreigners is not that straightforward. I live in the US but on a visa so reading this, I believe I can only own through a trust or a foreign corporation: 

 

https://www.faa.gov/licenses_certificates/aircraft_certification/aircraft_registry/register_aircraft/

 

Has anyone here been in a similar situation? I know Europeans owning N-reg aircrafts in Europe use trusts but wasn’t expecting to have issues being US-based and with a US-reg aircraft staying in the country.

 Thank you!

Edited August 30, 2019 by xavierde

[carusoam]

Xavier,

There are plenty of N registered planes that don’t ever leave Europe...

Standby for some shared MS experience...

Also look to IAOPA the international branch of the AOPA...

https://www.iaopa.eu/

PP thoughts only...

Best regards,

-a-

 

[elimansour]

Hi Xavier.  Only US Citizens or resident aliens are permitted to register aircraft in the US registry (regardless of where the aircraft is based) with a couple of limited exceptions that do not apply to your situation.   The registration eligibility has to do with citizenship of the owner not the location of the aircraft (in compliance with ICAO standards) so unfortunately you will have to use a U.S. owner trustee to hold legal title to the aircraft.    

[jkarch]

So the question is how might someone who is not a US citizen or permanent resident who resides and works in the US as a foreign resident own a US registered aircraft that spends the majority of its time within the borders of the USA? I’ve heard of things like trusts, but what about corporations or other things?

[jkarch]

1 hour ago, elimansour said:

Hi Xavier.  Only US Citizens or resident aliens are permitted to register aircraft in the US registry (regardless of where the aircraft is based) with a couple of limited exceptions that do not apply to your situation.   The registration eligibility has to do with citizenship of the owner not the location of the aircraft (in compliance with ICAO standards) so unfortunately you will have to use a U.S. owner trustee to hold legal title to the aircraft.    

What is a US owner trustee? Looks like there are a few companies providing this service. What is the best option?

Edited August 31, 2019 by jkarch

[Bob E]

Maybe this will help.   I've helped a few clients with this stuff.  (I'm an attorney -- it helps pay the cost of flying!)  You'll probably want a trust, which means you'll need the affidavit referred to in 47.7.  Talk to your insurance carrier before doing any of this.

14 CFR

§47.3   Registration required.

(a) An aircraft may be registered under 49 U.S.C. 44103 only when the aircraft is not registered under the laws of a foreign country and is—

(1) Owned by a citizen of the United States;

§47.2   Definitions.

The following are definitions of terms used in this part:

. . .

U.S. citizen means one of the following:

(1) An individual who is a citizen of the United States or one of its possessions.

(2) A partnership each of whose partners is an individual who is a citizen of the United States.

(3) A corporation or association organized under the laws of the United States or a State, . . . of which the president and at least two-thirds of the board of directors and other managing officers are citizens of the United States, which is under the actual control of citizens of the United States, and in which at least 75 percent of the voting interest is owned or controlled by persons that are citizens of the United States.

. . .

§47.7   United States citizens and resident aliens.

(a) U.S. citizens. An applicant for aircraft registration under this part who is a U.S. citizen must certify to this in the Aircraft Registration Application, AC Form 8050-1.

...

(c) Trustees. An applicant for aircraft registration under 49 U.S.C. 44102 that holds legal title to an aircraft in trust must comply with the following requirements:

(1) Each trustee must be either a U.S. citizen or a resident alien.

(2) The applicant must submit with the Aircraft Registration Application—

(i) A copy of each document legally affecting a relationship under the trust;

(ii) If each beneficiary under the trust, including each person whose security interest in the aircraft is incorporated in the trust, is either a U.S. citizen or a resident alien, an affidavit by the applicant to that effect; and

(iii) If any beneficiary under the trust, including any person whose security interest in the aircraft is incorporated in the trust, is not a U.S. citizen or resident alien, an affidavit from each trustee stating that the trustee is not aware of any reason, situation, or relationship (involving beneficiaries or other persons who are not U.S. citizens or resident aliens) as a result of which those persons together would have more than 25 percent of the aggregate power to influence or limit the exercise of the trustee's authority.

(3) If persons who are neither U.S. citizens nor resident aliens have the power to direct or remove a trustee, either directly or indirectly through the control of another person, the trust instrument must provide that those persons together may not have more than 25 percent of the aggregate power to direct or remove a trustee. Nothing in this paragraph prevents those persons from having more than 25 percent of the beneficial interest in the trust.

§47.8   Voting trusts.

(a) If a voting trust is used to qualify a domestic corporation as a U.S. citizen, the corporate applicant must submit to the Registry—

(1) A true copy of the fully executed voting trust agreement, which must identify each voting interest of the applicant, and which must be binding upon each voting trustee, the applicant corporation, all foreign stockholders, and each other party to the transaction; and

(2) An affidavit executed by each person designated as voting trustee in the voting trust agreement, in which each affiant represents—

(i) That each voting trustee is a citizen of the United States within the meaning of 49 U.S.C. 40102(a)(15).

(ii) That each voting trustee is not a past, present, or prospective director, officer, employee, attorney, or agent of any other party to the trust agreement;

(iii) That each voting trustee is not a present or prospective beneficiary, creditor, debtor, supplier or contractor of any other party to the trust agreement;

(iv) That each voting trustee is not aware of any reason, situation, or relationship under which any other party to the agreement might influence the exercise of the voting trustee's totally independent judgment under the voting trust agreement.

(b) Each voting trust agreement submitted under paragraph (a)(1) of this section must provide for the succession of a voting trustee in the event of death, disability, resignation, termination of citizenship, or any other event leading to the replacement of any voting trustee. Upon succession, the replacement voting trustee shall immediately submit to the Registry the affidavit required by paragraph (a)(2) of this section.

(c) If the voting trust terminates or is modified, and the result is less than 75 percent control of the voting interest in the corporation by citizens of the United States, a loss of citizenship of the holder of the Certificate of Aircraft Registration, AC Form 8050-3 occurs, and §47.41(a)(3) of this part applies.

(d) A voting trust agreement may not empower a trustee to act through a proxy.

            §47.11   Evidence of ownership.

Except as provided in §§47.33 and 47.35, each person that submits an Aircraft Registration Application, AC Form 8050-1 under this part must also submit the required evidence of ownership, recordable under §§49.13 and 49.17 of this chapter, as follows:

(a) The buyer in possession, the bailee, or the lessee of an aircraft under a contract of conditional sale must submit the contract. The assignee under a contract of conditional sale must submit both the contract (unless it is already recorded at the Registry), and his assignment from the original buyer, bailee, lessee, or prior assignee.

. . .

(h) The trustee of property that includes an aircraft, as described in §47.7(c), must submit either a certified copy of the order of the court appointing the trustee, or a complete and true copy of the instrument creating the trust. If there is more than one trustee, each trustee must sign the Aircraft Registration Application. The Certificate of Aircraft Registration is issued to a single applicant as trustee, or to several trustees jointly as co-trustees.

[N131MA]

Xavier

I have good experience with https://www.southernaircraft.co.uk/

The very responsive team that will guide you through the paperwork within days. Insurance is no issue.

Brexit and the currency devaluation of the British Pound make the GBP 375.- annual fee cheaper every day :-)

Peter

[xavierde]

Thank you all. I’ll get that trust set up.

[RobertGary1]

17 hours ago, xavierde said:

Thank you all. I’ll get that trust set up.

Make sure you work with a law firm that is familiar with aircraft registration. This is serious, FBI at your door stuff if they get it wrong. They're very sensitive about ownership since 9/11.

 

-Robert