Cayman Islands: Cayman Islands AOC: Principal Place Of Business Requirements Through CEC

Last Updated: 14 March 2018
Article by Sherice Arman and Dale Crowley

This article summarises the requirements for the issuance of an air operator's certificate permitting an aircraft registered with the Civil Aviation Authority of the Cayman Islands to fly for the purpose of commercial air transport, in particular in relation to the requirement to maintain a "principal place of business" in the Cayman Islands through Cayman Enterprise City's Aviation Services Park.

Four Key Tests

There are four key tests that a potential air operator's certificate ("AOC") holder needs to demonstrate before the Civil Aviation Authority of the Cayman Islands can grant them an AOC:

  1. They must have their "principal place of business" in the Cayman Islands;
  2. They must be "competent" to secure the safe and secure operation of the aircraft specified in the AOC;
  3. They must establish and maintain an appropriate safety management system; and
  4. They must establish, implement and maintain an appropriate security programme.

Principal Place of Business – Practical Considerations

The following factors would assist in determining that the principal place of business of an AOC holder was in the Cayman Islands:

  1. A majority of Cayman Islands resident directors;
  2. Board meetings held in the Cayman Islands, with key operational and financial matters considered by the board in the Cayman Islands;
  3. Management meetings / activities conducted in the Cayman Islands;
  4. Corporate books and records of the company held in the Cayman Islands;
  5. Operational and safety records maintained in the Cayman Islands;
  6. Cayman Islands resident accountable managers;
  7. Maintaining an office in the Cayman Islands at which the day to day operational activities of the AOC holder are conducted; and
  8. Depending on the degree of control that the shareholder is able to exercise over the day to day activities of the company, a Cayman Islands resident shareholder.

Cayman Aviation Services Park

Cayman Enterprise City's ("CEC") special economic zone is designed to facilitate the economic and efficient establishment of a physical presence for businesses in specific industries in the Cayman Islands.

CEC has now introduced an Aviation Services Park that is designed to assist aviation services businesses, such as those involved in commercial air transport operations; aerospace-related activities; manufacturing, logistics planning and aircraft management; management consulting and other specialised services to the aviation and aerospace development sector.

The Aviation Services Park provides companies seeking to obtain a Cayman Islands AOC with an efficient solution for setting up a principal place of business in the Cayman Islands.

In order to set up in the special economic zone, an applicant will need to establish a Cayman Islands special economic zone company.

Once the company has been formed, an application is made to the Special Economic Zones Authority, which is a 'one stop shop' licensing authority that will grant approvals for the trade certificate (equivalent of business licence), the employment certificates for non-Caymanian employees (equivalent of work permit) and other approvals required to operate locally.

The company will need at least one employee based in the Cayman Islands (who can also be a Caymanian employee) in order operate within the Aviation Services Park.

Once the company holds a trade certificate, it will then be eligible to apply for a Cayman Islands AOC.

Some of the advantages of setting up within the Aviation Services Park include:

  1. No corporate, income, sales or capital gains tax payable by the company or employees in the Cayman Islands;
  2. 100% foreign ownership permitted;
  3. A three to four week fast-track business licensing regime;
  4. Single fee for operation of business within the special economic zone annually, which includes rent, licensing fees and work permit fees;
  5. No Government reporting or filing requirements;
  6. 'One stop shop' administration services;
  7. Easy access and direct flights to the US, Canada and London;
  8. There is no minimum amount of time to be spent in the Cayman Islands for employees of special economic zone companies;
  9. CEC can obtain renewable five year work / residency visas for Cayman-based staff within five working days, irrespective of their country of origin or position they will hold within the company;
  10. There is no maximum limit on the number of visas a company is allowed; and
  11. A company that is set up within the Aviation Services Park can hire local employees for the Cayman office.

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.

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