Bermuda: Aviation Finance & Aircraft Registration In Bermuda

Last Updated: 21 December 2017
Article by Kit Cunningham

Aviation finance, particularly aircraft leasing and aircraft lessor securitisation, are experiencing a boom on a global scale. These transactions provide the opportunity to employ innovative mechanisms for several different financings.

Bermuda is currently enjoying a resurgence in this arena and playing an active role in these transactions. Home to the largest offshore aircraft registry, Bermuda is also the world's 10th largest aircraft registry. Bermuda, unlike the majority of the top 10 aircraft registries, requires that a certificate of airworthiness be issued annually. These certificates create a paper trail for the mechanical and physical history of the aircraft, which is beneficial because it allows for monitoring various parts of the aircraft and determining how they age. This monitoring enables mechanical teams to more accurately predict when specific parts may need to be replaced. Moreover, this paper trail can be vital to proving and supporting the condition of an aircraft if it is placed on the market for sale.

Bermuda special purpose vehicle (SPV) funding and leasing arrangements are popular in Bermuda and may provide certain tax, regulatory and capital restriction relief. Introduction of the SPV into the structure depends upon financing and leasing regulations in the jurisdictions of the participant airlines, lessors or sub-lessors. The SPV's role in each structure is tailored to fit the particular transaction.

There are numerous benefits in establishing the SPV in Bermuda. Bermuda is a tax neutral jurisdiction (meaning there are no additional taxes in Bermuda that will affect or be harmful to the transaction) with appropriate, but not overly onerous, regulation. The legal framework of Bermuda is based on common law principles with English common law being persuasive authority. Furthermore, Bermuda is a British Overseas Territory and has a stable political system. In some instances, an airline is based in a country without a stable political and legal system thus, it is beneficial to the structure to establish the SPV in Bermuda.

In the typical financing structure, a Bermuda SPV is formed to act as owner and lessor or as lessee and sub-lessor of the aircraft. The location of the company in a tax neutral and flexible jurisdiction may offer certain protections against the bankruptcy of other involved parties and facilitates innovative and cost-effective methods of asset finance, often utilising cross-back tax benefits.

Recent Legislative Changes

Previously under Bermuda's Mortgaging of Aircraft and Aircraft Engines Act 1999 (Act), an aircraft or aircraft engine was required to be owned by, leased or chartered to, or otherwise in the lawful possession of a company duly incorporated in Bermuda in order to become the security of a loan (the "Requirement"). In January 2015 amendments to the Navigation (Overseas Territories) Order (Amended ANOTO) came into effect, which widened the list of eligible corporations and persons that could register an aircraft or aircraft engine on the Bermuda register. However, notwithstanding the Amended ANOTO, the Requirement remained and thus gave little affect to the Amended ANOTO.

Subsequently in June 2017 the Mortgaging of Aircraft and Aircraft Engines Amendment Act 2017 (Amending Act) came into effect, amending the Act to remove the Requirement. The Amending Act now allows for corporations and persons to register an aircraft on the Bermuda register who are: (i) bodies incorporated in any other part of the Commonwealth and having their registered office or principal place of business in the United Kingdom or any other part of the Commonwealth; (ii) Commonwealth citizens or nationals of any European Economic Area state; or (iii) undertakings formed in accordance with the European Economic Area state having their registered office, central administration or principal place of business within the European Economic Area.

The Royal Assent was received in July 2016 for Bermuda International Interests in Mobile Equipment (Cape Town Convention) Act 2016 (Cape Town Convention). The international Institute for the Unification of Private Law has confirmed that the Cape Town Convention will be extended to Bermuda, effective January 2018. The Cape Town Convention is designed to facilitate aircraft finance by standardizing transactions involving moveable property with respect to aircraft objects (e.g. airframes and aircrafts) by the creation of an electronic international registry of international interests that are recognized by those states that have implemented the Cape Town Convention and provide default remedies, when needed, to a creditor.

Aircraft Registration

The use of a Bermuda SPV also enables the aircraft to be registered on the Bermuda Aircraft Register. Furthermore, its use in the structure depends upon the financing, legal and regulatory requirements in the home jurisdiction of the airline thus, each transaction will be structured differently. Nonetheless, Bermuda offers the aircraft industry a commercially flexible approach with considerable expertise.

The policy of the Bermuda Civil Aviation Authority (BCAA) is to avoid the Bermuda Register of Civil Aircraft being used as a flag of convenience therefore, applications are carefully scrutinised. The BCAA require an application for registration of an aircraft in the private category to be accompanied by certain documentation.

These include:

  1. Copies of certain corporate documents and records showing capacity and authority to own or lease the aircraft;
  2. Evidence as to ownership of the aircraft;
  3. A statement attesting that the aircraft is not on a similar register of any other state or territory and confirmation of deletion of the aircraft from its previous registry by direct communications from the country or state of such registry;
  4. Statements in relation to the ongoing management and maintenance of the aircraft;
  5. Export Certificate of Airworthiness covering the export of the aircraft to Bermuda;
  6. Evidence that the aircraft is adequately insured; and
  7. Documents relating to the application for an aircraft radio licence.

It should be noted that registration in any other category will require the submission of additional documentation.

Having your aircraft registered on an international register provides the benefit of a solid reputation due the civil aviation authority's oversight. The BCAA focuses on providing a diligent and efficient service, as well and carrion out its duties and operations in a timely manner. Anyone who has dealt with the large civil aviation authorities such as the in the US and UK, knows it can be months before you get a response, if ever, from one of these authorities. Furthermore, the neutrality of Bermuda as a jurisdiction in combination with the low-profile of the registration mark, tax neutrality, being part of the Cape Town Convention, streamline registration process and annual airworthiness survey assuring the pedigree of an aircraft is beneficial to many aircraft owners, and makes the Bermuda registry a lucrative registry to consider.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions