Following multiple inquiries from aircraft owners and operators regarding recent changes in U.S. policies on Non-Citizen Trusts, we have prepared this memorandum to clarify key concerns. We have received numerous requests for guidance on:
- Whether an aircraft registered in Aruba can be principally based in the United States while remaining compliant with U.S. Federal Aviation Administration (FAA) operating rules.
- If so, whether there are any time limitations on how long such an aircraft may remain principally based in the United States.
Based on our assessment, under certain conditions, the answer to the first question is yes, and to the second, no– there is no prescribed time limit.
Regulatory Analysis
For the purposes of this analysis, we assume that the aircraft is:
- Directly owned by an SPV entity (e.g. Bermuda, BVI, etc.)
- Registered in Aruba and dry leased to a U.S. operator.
- Used in civil operations
Under these conditions, we believe that the dry lease arrangement can be authorized under Part 375 of the U.S. Department of Transportation (DOT) regulations, specifically 14 C.F.R. § 375.36. The aircraft would operate in the U.S. under the provisions of Part 91 of the FAA’s Federal Aviation Regulations (FARs) and applicable under Aruban Civil Aviation Regulations.
Key FAA Regulation –Section 375.36
Section 375.36, titled “Lease of Foreign Civil Aircraft Without Crew,” states:
Foreign civil aircrafts that are leased without crew to an air carrier or citizen or permanent resident of the United States, and used by the lessee in otherwise authorized air transportation or commercial air operations, may be operated into, out of, and within the United States in accordance with any applicable regulations prescribed by the Federal Aviation Administration.”
This provision confirms that a foreign-registered aircraft may be leased to a U.S. entity and based in presumably based in the United States). Section 375.36 does not impose any limit on the amount of time the dry lease arrangement may remain in effect
