November aircrafts abroad

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Lakzz

Filing Flight Plan
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Lakzz
Hey guys.

I see a lot of November airplanes operating here and there in Thailand, Vietnam, Japan and so on... I even saw a domestic fleet in Laos with French callsigns. They are mostly owned by Americans or Europeans, and they're apparently making business out of it.

I was wondering what was the status of these airlines/flight schools.

How's this thing possible?
Are they considered as Americans or local companies?
Can they only hire FAA (or JAA) pilots? No locals?
How about the tax and all that stuff?
Are they under the FAA or the local regulations?
How difficult is it to bring abroad a N aircraft for business pruposes?

All that might seems dumb to you. But I just can't understand. All apologizes and please, enlight me.
 
First off, ICAO permits this.

As a US Certificated pilot, you can fly any aircraft (presuming appropriate quals) in the US, and a US registered aircraft in any other ICAO country.

Now for the tough part. If you are not a US Citizen, you can only maintain a US Registration if you certify each six months that the aircraft has been in the US:

14CFR Part 47.9(b) said:
For the purposes of registration, an aircraft is based and primarily used in the United States if the flight hours accumulated within the United States amount to at least 60 percent of the total flight hours of the aircraft
Click to expand...
 
The laws which apply vary by jurisdiction, but one of the key reasons why N-reg aircraft are kept overseas is that, in general, it is much easier to get a pilot's certificate in the USA than in many other countries (more for reasons of logistics and cost than substance), but a US Pilot Cert may not necessarily be usable in a foreign jurisdiction to fly a locally-registered aircraft. On the other hand, a US-certificated pilot flying a US-registered aircraft, well, that's usually allowed, for a raft of reasons I won't go into now, but this fact forms the foundation of the practice.

It is also often functionally possible to maintain an aircraft as airworthy under US law, where doing so would be rendered uneconomic in many countries under their law. This is not to say that the US maintenance practices are inadequate (they are not); but rather, that the laws of many countries treat all aircraft as if they are in commercial service and carrying passengers for hire, and thus, are subject to maintenance practices which are impractical for privately-owned and operated aircraft.
 
JeffDG said:
Now for the tough part. If you are not a US Citizen, you can only maintain a US Registration if you certify each six months that the aircraft has been in the US:
Click to expand...

If you want to operate a N-register aircraft outside of the US as a non-citizen, you have to register it through a trust*. You can keep the plane outside of the US as long as you want. As for maintenance, you need an FAA IA to sign off on your annuals, that's about it.


*there are a couple of trust companies that offer this service, annual charges to maintain the trust go from $500/year on the low side to $2500/year on the high side. depending on your local tax and regulatory environment, this can still be a good deal as it allows you to maintain the plane under the lax FAA regulations. Also, if one plans to ever sell the plane on the US market, maintaining uninterrupted N-register status can be a good idea as many US buyers won't even look at foreign registered aircraft.
 
A few years ago I transferred my TB20 from G-reg (UK) to N-reg. Here are the notes on it, with a comparison of the differences. I think this list is still reasonably up to date...

In short, there is not a great deal of difference in routine maintenance costs - if you do the stuff that is really important. The differences are in enhancements (avionics, etc) and in pilot licensing which is e.g. 2 exams for a US PPL/IR versus 14 exams for a UK PPL/IR.

The flight training is similar in difficulty. The FAA stuff is not at all easy to do.

Nobody has ever found any difference in safety levels, and for obvious reasons many people in the European regulatory establishments have dug hard and deep for such data :)
 
I've been through this a time or two selling an aircraft to someone in, for example, Germany where the VAT tax is obscenely high. The buyer put the airplane in a Texas based trust and left it "N" numbered/registered when they flew it home. I had nothing to do with recommending this or setting it up but according to the buyer it's a loophole for dodging the VAT which in this case would have been in to six figures for that alone. Sounds sketchy to me but there ya go...
 
You can't do that anymore.

If the plane is to be based in the EU, you need to pay the import VAT and get a piece of paper proving you have done so, otherwise you risk a grounding (following a ramp check; they do them mostly in France and Germany) and you don't get the plane back until you have paid the VAT.

However this depends on whether the owner is an EU resident; I know someone who has been through this and it is a bit complicated. For a US pilot who is merely visiting the EU (e.g. to work here for a year), the situation is different. I don't know the details.

Until 31/12/2009 a popular route was to import via Denmark, where a lawyer owned it for a day, and Denmark had zero VAT on used aircraft (in general terms). This option is now closed too.
 
Just heard that the FAA stopped accepting registrations to trusts. Don't know what's up with that.
 
weilke said:
Just heard that the FAA stopped accepting registrations to trusts. Don't know what's up with that.
Click to expand...
I know of an aircraft which was recently registered to "Wells Fargo Bank NA Trustee". I looked it up on the FAA registry and the certificate issue date is 4/16/2010 so they were doing it only a couple weeks ago.
 
Everskyward said:
I know of an aircraft which was recently registered to "Wells Fargo Bank NA Trustee". I looked it up on the FAA registry and the certificate issue date is 4/16/2010 so they were doing it only a couple weeks ago.
Click to expand...

The date I heard was 5/3. Nothing on the FAA website.
 
That claim apparently originates from a post on the socata.org user group site, this morning.

I have checked with my US trustee and he says that all that has changed is the FAA office which processes the registrations of the trusts.

A few weeks ago I attended a UK presentation by an FAA lawyer, followed by a wide ranging discussion on various interesting topics, in which it was categorically stated that stopping trusts is not on the FAA agenda. They appear to be unhappy with trusts which are set up to conceal the identity of the true beneficial owner ("Trustor" in U.S. speak) but one can understand that. I asked her to check this out and if she comes back with anything of interest I will report.

Stopping trust ownership of N-reg planes would cause mayhem all over the world.
 
That makes more sense. It would be unusual for the FAA to make a drastic change on something that is written into law without a rule-making process. For US law, a properly set up trust is a 'person' (as we recently found out even equipped with rights such as free speech). Taking the ability to register an aircraft away from a trust would be subject to legal challenges. Lots of money tied to those trusts.
 
Thank you all for your replies.

I apreciate it.
 
A good friend of mine operates out of Thailand, where he lives. I recall him telling me that N-reg are not allowed to be based there permanently, and I know he would be aware of such issues. If anybody needs details, drop me an email and I will contact him.

Visiting N-reg aircraft are of course allowed under ICAO (not sure I would try this in Iran :) ).

Also, speaking very generally, some countries operate a different regime for their own citizens (or residents; not quite the same thing). So a resident might be more restricted or banned outright, but a visiting foreigner (e.g. one working there on a contract for say an oil company) would be OK to park and fly his N-reg aircraft while he is working there.

Britain and France tried a "long term parking limit" on foreign reg (basically meaning US reg) aircraft which was 90 or 180 days max, back in 2004/05. They ran these proposals quite a distance (especially the UK) but then dropped them like a hot potato. Parking limits are self evidently difficult to enforce ... imagine having officials peering inside hangars to see what's parked inside, perhaps undergoing maintenance and not airworthy to fly until some part arrives.

Now, EASA is running a new and more enforceable and more hard-hitting proposal to strip EU residents of foreign license privileges, effective 2012. All these pilots will have to obtain the local papers too, which for a CPL/IR is 14 exams and a load of flight training - even if you are a 20,000hr US ATP.

Another thing which may permit a foreign reg aircraft to "permanently" live in some country would be if operated under an AOC. This, if granted by the Govt of the said country, carries an implied permission.

Finally, it is generally true that much of the "3rd world" runs on very loose rules. There isn't the regulatory transparency and the strictly enforced legal framework we are used to in the West. A lot of stuff goes on, and it is OK until you upset somebody important, and then the sky falls in on top of you. There is also a vast amount of corruption, which reduces transparency. You don't even have to leave Europe to see this; almost anywhere south of the Alps is a good start :)
 
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