In December last year, Guernsey introduced 2-REG, the Channel Islands Aircraft Registry. Here Fiona Le Poidevin, Chief Executive of Guernsey Finance, explores what it offers international clients.
Guernsey's aviation registry, 2-REG, is the first of its kind to be established in the Channel Islands. It provides for the registration of high quality aircraft involved in non-commercial flying activity around the world. An aircraft does not have to be physically present in Guernsey to be entered onto the register (nor does it have to be possible for the aircraft to come to Guernsey) provided that the legal and beneficial owners meet the requirements to register.
In practice, international clients are likely to want to register their aircraft in Guernsey as part of complex private wealth management or corporate arrangements. Indeed, the new registry provides another tool for Guernsey's financial service practitioners to offer their clients.
The aviation registry also complements Guernsey's existing expertise gained in banking, wealth management, funds, insurance and wider financial services, all of which can be important in the structuring, financing and holding of an aircraft. Guernsey boasts a wide selection of international banks and wealth managers available to meet financing needs, as well as professional tax, legal and fiduciary advisors who can provide structuring advice in a time and cost efficient way.
What is the 2-REG?
The 2-REG was established by the Aviation Registry (Guernsey) Law, 2013 and is operated by SGI Aviation through a public-private partnership.
The Registry maintains three separate registers, one each for aircraft, engines and mortgages. This structure allows the financing and security arrangements on Guernsey registered aircraft and engines to be implemented in the internationally recognised way.
The register offers a unique registration mark '2-' and the first few registered in December 2013 included 2-PLAY, 2-HIGH and 2-OFUS. There is an additional fee for having an out of sequence 'cherished' plate and the pricing is considered very reasonable.
Marianne Domaille, Director of Albecq Trust Company and SGI Guernsey, believes 2-REG is a great addition to Guernsey's suite of offerings.
"It will enable Guernsey to offer an all-encompassing service in terms of establishing ownership structures for aircraft which are not only registered in Guernsey, but can also be professionally advised, banked, financed, insured, crewed and maintained from here too," she said.
The US's N-REG and the UK's G-REG are currently the world's most popular aircraft registries. The IOM offers an 'offshore' registry through its M-REG. Guernsey's registry can be differentiated from these by the advantages it offers.
Advantages of the 2-REG
The 2-REG offers benefits to aircraft owners and operators that are not available with other registries, including a 24/7 support system for urgent matters which is considered unique in the industry.
The 2-REG permits the registration of aircraft with a maximum take-off weight of less than 5,700kg – this means that more types of aircraft can be registered in Guernsey than can typically be registered on other offshore registries, including the M-REG.
The 2-REG also offers the ability to select the maintenance program for the aircraft. The options include the certification standards of the US Federal Aviation Administration (FAA), Transport Canada Civil Aviation TCCA or the European Aviation Safety Authority (EASA). Therefore, where a client has familiarity or a preference for choosing one program over another they can do so with the 2-REG.
The 2-REG also issues pilot licences with options under the US, Canadian and European rules allowing owners and operators the flexibility to choose according to their own preferences and circumstances.
Carey Olsen Partner Russell Clark is another of those welcoming the introduction of the 2-REG. He believes it presents plenty of opportunity for growth in the finance and fiduciary sectors in Guernsey.
"The 2-REG offers a flexible and competitive process for the registration of aircraft assets and allows security to be taken over those assets in a form that will be familiar to the international aviation community. The registration of an aircraft on the 2-REG offers many advantages and we look forward to working with our clients to ensure they are able to capitalise on these advantages," said Mr Clark.
Fees
The licensing and registration fees vary depending on the weight of the aircraft but the Guernsey registry is very competitively priced in comparison with other registries, such as the Isle of Man.
Conclusion
Guernsey has acted to ensure it can continue to offer innovative and relevant wealth management and wider financial services solutions to individuals and corporates wherever in the world they may be based.
The registry is anticipated to be particularly attractive to internationally mobile business aircraft owners, who can benefit from registering their aircraft in a highly regarded, stable and well regulated jurisdiction, whilst making use of Guernsey's mature, robust and sophisticated financial, legal and fiduciary services infrastructure.
For more information visit www.2-REG.com
An original version of this article appeared in the STEP Journal, April 2014.
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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.
