The aviation industry - in particular the private category market - is once again proving to be a bourgeoning sector of the global economy following the effects of the 2008 financial crisis.
Enhanced regulation of safety standards has become an important focal point of lawmakers and regulators in many jurisdictions worldwide.
Bermuda is arguably ahead of this trend as flight operations standards which are currently required for Bermuda aircraft operators now represent a benchmark for other jurisdictions to meet.
Bermuda's constant attention to legal and regulatory developments across the globe and its proactive responses to an ever-changing global economy have, for many years, allowed for this offshore financial centre to evolve and prosper. The island has an international reputation for high regulatory standards and this holds true in respect of the registration and, more importantly, the operation and maintenance of aircraft.
The Bermuda Register, having been in existence since 1931, is used by companies and high net worth individuals from across the world with 722 aircraft currently registered. The Bermuda register enjoys a wellearned reputation as one of the safest registers in the world.
As an Overseas Territory of the United Kingdom, Bermuda's legislative framework relating to aircraft registration and operation derives from the United Kingdom pursuant to the Air Navigation (Overseas Territories) Order 2007 (AN(OT)O).
The Bermuda Department of Civil Aviation (BDCA), the jurisdiction's civil aviation authority, implemented Article 85 of the AN(OT)O in 2009 requiring operators of all aircraft who fall within the provisions of Article 85 to comply with safety and other requirements set forth in that Article.
Aircraft approved under Article 85 is deemed to be operating at a higher safety level to the standards set by the International Civil Aviation Organisation, potentially allowing for a reduction in annual aircraft insurance.
The United Kingdom Department for Transport, through its wholly owned subsidiary Air Safety Support International (ASSI), acts as the regulatory body charged with overseeing the Overseas Territories in respect of aviation matters. ASSI publishes Overseas Territories Aviation Requirements (OTARs) and Overseas Territories Aviation Circulars (OTACs) on behalf of the Governors of the Overseas Territories in support of the Governor's powers contained in the AN(OT)O.
The OTARs and OTACs provide additional detail and guidance regarding compliance with the AN(OT)O which are acceptable to Governors, ASSI and the United Kingdom Government.
Although not carrying the force of law, OTARs and OTACs expand on the provisions of the AN(OT)O. They are not intended to supersede or conflict with statutory requirements but supplement those legal provisions working in concert with them. There is a degree of flexibility maintained and the relevant Authority may exercise same discretion, provided always that safety will not be adversely affected.
Further, the oversight by ASSI of the BDCA in respect of Bermuda-registered aircraft ensures that the highest levels of safety and operation standards are maintained.
An advantage of having robust yet flexible regulatory standards offers better residual sale values for aircraft on the Bermuda Register as compared with aircraft registered in locations not enjoying as strong a reputation for sound regulatory oversight.
Update:
Structures for aircraft which are based in or require entry into the EU on a regular basis – Management of Import VAT payment and Duty
For those owners who have aircraft based in, or need to enter Europe on business on a regular basis, Appleby can provide a corporate structure which allows the aircraft to be in free circulation within the EU whilst deferring the payment of EU VAT and providing relief from Import Duty. Bermuda companies which own an aircraft registered in Bermuda can avail themselves of this cost effective structure.
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