28 July 2008
The Isle of Man Aircraft Registry commenced business on 1 May 2007 with the intention of becoming the world’s leading – and Europe’s only – body dedicated to registering high-quality private and corporate-owned business jets and turbine-engine helicopters. The Isle of Man Department of Trade & Industry, which operates the registry, also anticipated that the registry would provide a valuable profile-raising platform for the Isle of Man and assist its general economic development.
Unlike other aircraft registries, the Isle of Man’s is not intended to be a profit-making venture for the government. Its charges only cover its operating costs and it does not impose a requirement that aircraft are owned or leased by Isle of Man companies. Bodies incorporated in the Commonwealth and undertakings formed and managed in European Economic Area states are all qualified to own Isle of Man-registered aircraft.
The Isle of Man Aircraft Registry has experienced an extraordinarily successful first 14 months of operation, registering more than 70 aircraft, with a further 50 expected to be registered in the coming months.
However, the success of the registry is reflected as much in its quality as in the number of aircraft registered. Although the registry is prepared to register fixed-wing aircraft weighing less than 5,700kgs for residents or businesses operating from the Isle of Man, the vast majority of aircraft registered have been high-quality, often new, private and business aircraft such as Bombardier Challengers, Global Expresses, Dassault Falcons, Gulfstream IVs and Boeing Business Jets.
By replicating the UK legal framework, with favourable modifications, the registry has benefited from a legally robust and internationally recognised footing, while being flexible and accommodating to owners’ needs. For example, aircraft, crew licences and maintenance organisations that comply with reputable international standards are generally accepted by the registry without the imposition of further requirements, such as modifying the aircraft or retraining crew.
The aircraft registry is a flagship example of the quality type of business the Isle of Man aims to attract and what the Isle of Man can offer to clients – a highly professional, but also user-friendly and flexible, service.
The registry has also allowed the Isle of Man to offer a more complete package of offshore solutions. For example, the Isle of Man is one of the world’s leading centres for super-yacht registration, management and ownership, and super-yacht owners are often existing and potential future aircraft owners. Existing professional relationships developed in relation to a client’s yacht can easily be extended to cover the client’s aircraft with resultant benefits for both the client and the service providers.
The registry’s high profile has also raised the Isle of Man’s profile as a centre for aviation. In addition to having the manufacturing presence of multinational aerospace companies such as GE Aviation, Isle of Man corporate and trust structures are frequently used by major international airlines and aircraft operators in aircraft ownership and financing transactions.
A perhaps unexpected benefit of the registry has been its role in creating a favourable impression of the Isle of Man with chairmen and senior executives of multinational companies. It seems that these individuals, who would otherwise be extremely difficult to access for marketing purposes, take a particular interest in their companies’ new corporate jets, especially when they can invent an ‘M’ registration mark for their aircraft that is personal to them or their businesses. Being held in high regard by the corporate decision-makers can only benefit the Isle of Man when it comes to winning business in competition with other jurisdictions.
The economy of the Isle of Man has benefited from the registry in a number of ways, with law firms, tax advisers and fiduciary service providers assisting with transactions and structures. In particular, and despite it not being a registry requirement, approximately one-third of Isle of Man-registered aircraft are owned by Isle of Man vehicles. This is presumably because Isle of Man vehicles are ideal for aircraft ownership, with an absence of corporation, capital gains, stamp duty, insurance premium and analogous taxes, and the ability to register for VAT and constitute part of UK VAT groups.
The indirect benefits of the registry to the Isle of Man are harder to quantify, but are likely to be more valuable in the long term. The registry has facilitated the development of new working relationships between local professional firms and corporations, financial institutions, ultra-high-net-worth individuals and professionals using the Isle of Man’s services for the first time. This can only benefit the Isle of Man in the short, medium and long terms.
Steven Quayle is a senior associate at the Isle of Man office of Cains