Buying and Selling Private Jets: The Complete Legal and Tax Guide (2026)

The acquisition and disposal of private jets constitute complex operations at the intersection of international law, cross-border taxation, and compliance rules. With a global business aircraft market estimated at tens of billions of euros, air transactions involve major issues: determination of applicable law, aircraft registration, tax optimization, safety standards, and anti-money laundering compliance. This article explores the complete legal framework, tax obligations, and best practices to secure a high-level air transaction.

Global Private Aviation Market and Legal and Tax Issues

Characteristics of the Global Aeronautical Market

The private aviation market remains a strategic sector on a global scale, governed by international conventions that are binding on signatory States. Transactions involving aircraft involve actors located in several jurisdictions: seller, buyer, financiers, insurers, and operators. This geographic fragmentation generates considerable legal and tax complexity, requiring specialized expertise in aeronautical law, private international law, and cross-border taxation.

Major Legal and Tax Issues

Sellers and buyers must face several challenges: determination of applicable jurisdiction, registration in different jurisdictions, tax optimization, acquisition structuring, compliance with anti-money laundering obligations, and title security via recognized registers. Mismanagement exposes parties to risks: unpredictable taxation, cross-border disputes, title irregularities, and regulatory complications.

Legal Framework for Aircraft Sales: Applicable Law and Contract

1944 Chicago Convention and Applicable National Law

The Convention on International Civil Aviation of 7 December 1944 (Chicago Convention) constitutes the foundation of global aeronautical law. This multilateral treaty, ratified by 193 States, establishes fundamental principles of air sovereignty, recognition of aircraft nationality, and rights of circulation in international airspace. Article 17 of the Convention provides that each aircraft in flight must be registered in a single contracting State, which implies a unique and exclusive registration.

Although the Chicago Convention establishes the general framework, each State's national law remains applicable for many matters: conditions of ownership, transfer of ownership, mortgages, privileges, and seizures. In France, the Civil Aviation Code (Articles L. 121-1 et seq. of the Transport Code) governs the registration of civil aircraft, while the Civil Code (Articles 538 et seq. relating to property ownership) applies to general rules of transfer.

The question of applicable law to the sales contract is governed by the Rome Convention of 1980 on the law applicable to contractual obligations (European private international law). Absent a choice-of-law clause in the sales agreement, the law of the seller's habitual residence applies in principle. However, the parties may freely choose the jurisdiction and applicable law to the contract, which facilitates legal harmonization and predictability (frequent choices: English law, New York law, or French law).

Aircraft Purchase Agreement (APA)

The Aircraft Purchase Agreement (APA) is the key contract governing aircraft sales. Unlike a simple personal property sale, the APA must address the specificities of civil aviation: (1) precise technical identification of the aircraft (serial number, registration registry, model); (2) airworthiness condition and maintenance history; (3) conditions for de-registration and re-registration; (4) transfer of ownership and title security; (5) allocation of risks (insurance, warranties); (6) suspensive conditions (financing, regulatory approvals).

The APA includes: aircraft description, seller warranties, technical due diligence, suspensive conditions, payment terms, registration fees, financial guarantees, and international arbitration provisions.

Technical Due Diligence: Inspections, Maintenance Records, and Airworthiness

Airworthiness (fitness for flight) is a major legal obligation. Any aircraft operating in controlled airspace must have a Certificate of Airworthiness issued by the competent aviation authority. In France, this is the DGAC (Direction générale de l'Aviation civile). In the United States, it is the FAA (Federal Aviation Administration). In Europe, it is the EASA (European Union Aviation Safety Agency).

Aircraft Registration and Registers

France: DGAC and French Registration Registry

In France, aircraft registration is governed by Articles L. 121-1 et seq. of the Transport Code (formerly the Civil Aviation Code). The DGAC maintains a public register of aircraft registered in France, identified by a three-letter registration preceded by F (example: F-ABCD for a French civil aircraft).

To register in France: demonstrate legal capacity and EU residence, provide proof of ownership, apply for DGAC registration, and obtain an airworthiness certificate. Processing time: 2-3 months.

French registration confers an advantageous legal status: presumption of ownership against third parties, ease of financing from French and European banks, international recognition under the Chicago Convention. However, registration in France subjects the aircraft to French taxation (ISAT, operating taxes, excise tax on fuel).

USA: FAA Aircraft Registration, N-Number, and Trust Structures

In the United States, aircraft registration is administered by the Federal Aviation Administration (FAA), pursuant to 14 CFR Part 47 (Code of Federal Regulations, Part 47 on aircraft registration). Each registered aircraft receives a unique identifier called an N-number or tail number (example: N123AB), beginning with the letter N which identifies the United States.

The FAA accepts registration of aircraft owned by: (1) an individual residing in the United States; (2) a legal entity incorporated under American law or that of a State; (3) a foreign government or foreign individual holding an aircraft via a trust (American trust). The FAA-approved trust is a very popular mechanism for acquisitions by non-residents. The trust, established under the law of an American State (typically Delaware or Florida), holds the aircraft, and one or more American trustees ensure regulatory compliance.

The American trust offers confidentiality (the FAA register displays only the trust name), tax and succession benefits, and liability isolation.

Attractive Registers: Cayman Islands, Isle of Man, San Marino, Aruba

Several third jurisdictions offer flexible aircraft registration regimes, attracting buyers for tax or estate reasons. The Cayman Islands (CAACI register, Cayman Islands Airports Authority) offer a stable regulatory environment, substantial confidentiality, and favorable taxation. Aircraft registered in the Cayman Islands benefit from international recognition and high safety standards. However, the Common Reporting Standard (CRS) and the EU directive on tax transparency progressively reduce absolute confidentiality.

2001 Cape Town Convention and Aeronautical Protocol

The 2001 Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol constitute a major framework for securing the interests of creditors (banks, lessors) in case of aircraft financing. This convention, ratified by more than 80 States (including France, the United States, the United Kingdom, and Germany), creates a centralized international register of interests in aircraft.

VAT and European Taxation

VAT on Aircraft Sales: Exemptions and Applicable Rates

Article 262-II-8° of the French Tax Code (CGI) exempts aircraft of commercial airlines (remunerative public transport).

Conversely, sales of business or tourism aircraft (private jets, corporate helicopters) are subject to VAT at the standard rate of 20% in France. This rule applies to the seller established in France or delivering an aircraft in France. VAT liability depends on the place of aircraft delivery. Under Articles 259 A of the CGI and EU Regulation 952/2013 (Union Customs Code), if the aircraft is delivered outside the EU territory (for example, in the United States or Switzerland), French VAT does not apply.

VAT exemption on imports is possible via temporary admission (re-export within 2-3 years).

VAT on Charter and Aircraft Leasing

Aircraft leasing and charter services (aircraft rental) constitute an important part of the private aviation sector. Article 259 A of the CGI governs the VAT treatment of these operations. A fundamental distinction applies between: (1) leasing with crew (charter); (2) leasing without crew (dry lease, wet lease without operating services).

Charter services with crew and assistance constitute transport services and are subject to international transport taxation rules. If the flight begins and ends outside EU territory, the service is generally VAT-exempt (international transport exemption, Article 262-II of the CGI). Conversely, a flight departing from and returning to France is subject to VAT at the reduced rate of 5.5% or the standard rate depending on circumstances.

For aircraft leasing, the VAT regime depends on whether it is a "financial lease" or "operating lease." A financial lease (lease-financing) is treated fiscally as a financed sale; it generates VAT on the financial charge. An operating lease is a pure rental service, subject to VAT at 20% in France.

Temporary Admission and EU Regulation 952/2013

EU Regulation 952/2013 (Union Customs Code) modernized the rules for temporary admission of aircraft. This specialized customs regime permits temporary importation of aircraft into the Community without payment of customs duties or import VAT, provided the aircraft is re-exported within a determined period.

Customs Duties and American Taxation

HTS 8802: Tariff Classification for Aircraft

In the United States, the tariff classification of aircraft falls under the Harmonized Tariff Schedule (HTS), code 8802, which groups aircraft and aircraft parts. HTS 8802 applies to the importation of aircraft into American customs territory. The applicable duty rate is generally zero or very low (0 to 2.5%) depending on the specific type of aircraft and its geographic origin.

EU aircraft imported to the USA: reduced tariff 0-2.5% via trade partner status.

A preliminary ruling request to the CBP (Customs and Border Protection) is recommended before importation to avoid penalties.

Bonus Depreciation and IRC § 168(k)

IRC § 168(k) authorizes 100% first-year deduction for equipment including commercial aircraft (bonus depreciation).

Applicable to aircraft acquired/placed in service after 01/01/2022. Example: acquisition of $50M = immediate $50M deduction.

Applies only to commercial aircraft (professional activity/investment). Not for personal aircraft. Not for foreigners without US PE.

State Sales Tax and Exemptions (Fly-Away Exemption)

Beyond federal customs duties, aircraft imported to the United States are potentially subject to state sales taxes of States in which they are used or registered. Sales tax rates vary between 4% and 10% depending on the State. However, a major exemption applies: the fly-away exemption.

The fly-away exemption exempts an imported aircraft from sales tax, provided that: (1) the aircraft is exempt from sales taxes in the State of use; (2) the aircraft leaves United States territory within 90 days following its importation and FAA registration; (3) no significant commercial or personal use is conducted within the United States during this period.

This exemption facilitates acquisitions of aircraft intended for global operations without US tax surcharge.

1031 Exchange for Aircraft (IRC § 1031) - Limitation Post-TCJA

IRC § 1031 traditionally authorized American taxpayers to defer tax on gains realized upon exchanging one aircraft for another similar aircraft, without recognizing the gain. This mechanism, called "like-kind exchange" or "1031 exchange," offered powerful tax planning for aircraft buyers.

However, the Tax Cuts and Jobs Act (TCJA) of 2017 significantly limited this provision. Effective 1 January 2018, § 1031 no longer applies to exchanges of personal property, including aircraft. Henceforth, only exchanges of real property continue to benefit from tax deferral. Any exchange of one aircraft for another aircraft triggers immediate taxation on the realized gain, without possibility of deferral.

This limitation has reduced the attractiveness of aircraft exchanges for American taxpayers.

French-Specific Taxation

ISAT: Solidarity Tax on Tourism Aircraft

ISAT (Articles 990+ CGI): specific French tax on tourism aircraft registered in France.

Annual amount depending on engine and weight: light €2K-5K, medium €10K-30K, ultra-long-range up to €100K/year.

Avoidance possible via foreign registration (USA, Cayman Islands, Isle of Man) + leasing/charter, subject to anti-abuse rules.

Civil Aviation Tax

Beyond ISAT, aircraft registered in France are subject to the Civil Aviation Tax, levied at registration and annual renewal. This tax finances DGAC services and air navigation (DSNA provider, Direction des services de la navigation aérienne). The amount ranges between €500 and €2,000 depending on the type and size of the aircraft.

It adds to the tax burden of French owners and is not tax-deductible.

Art. 39-4 CGI: Non-Deductibility of Depreciation for Tourism Aircraft

Article 39-4 of the CGI prohibits deduction from taxable profit of depreciation on tourism or sports aircraft used by a business. This rule applies to aircraft with an empty weight exceeding approximately 2,000 kg and used for leisure or sport (as opposed to commercial transport aircraft).

This provision aims to discourage investment in leisure aircraft by businesses via tax deduction. An airline operator or transport provider may depreciate its commercial aircraft (full deductibility). Conversely, a business owner using an aircraft for mixed business purposes (business and leisure) cannot deduct depreciation. Only actual operating costs and fuel expenses may be deducted, subject to justification.

It encourages structuring the acquisition through a specialized entity or lease with a foreign lessor-financier.

TICPE and Aviation Fuel

Aviation fuel (Jet A-1) purchased in France is subject to Energy Internal Consumption Tax (TICPE), codified in Book II of the Tax Code on Goods and Services. The standard TICPE rate on aviation fuel is approximately €0.02 per liter (reduced rate); however, the regime may vary depending on use (commercial civil aviation vs. leisure).

Commercial aircraft benefit from TICPE exemptions. Total fuel cost represents a major budget item (€5,000 to €50,000 per 100 flight hours depending on the model).

Estate Planning: Corporate Ownership

French SAS/SARL vs Delaware LLC vs Irish Corporation

Aircraft acquisition may be effected in the name of an individual or via a corporate structure. Each approach presents advantages and disadvantages regarding taxation, civil liability, confidentiality, and administrative convenience.

French SAS/SARL: Contractual flexibility and legal stability, but full subjection to French taxes (ISAT, civil aviation tax, TICPE).

Delaware LLC: Limited liability, contractual flexibility, optional tax transparency, no internal VAT. Compliance with IRC § 168(k) and § 274(a) required.

Irish Corporation: Tax rate 12.5%, network of bilateral tax treaties, ideal for leasing/charter. Substantially lower than French/American rates.

SPV (Special Purpose Vehicle) for Aircraft Acquisition

For significant acquisitions or financing arrangements, buyers establish an SPV (Special Purpose Vehicle), or specialized holding company. An SPV is an ad hoc legal entity, often with limited liability, created exclusively to hold and operate an aircraft (or portfolio of aircraft).

The advantages of an SPV: risk isolation, facilitated financing, easy transfer, tax optimization via favorable jurisdiction.

Leasing Structures: EETC, ECA-Backed, JOLCO

Aircraft leasing, particularly for heavy commercial aircraft (Airbus, Boeing), uses sophisticated financing structures. The principal structures include:

EETC (Enhanced Equipment Trust Certificate): A certificate securitizing aircraft lease payments. Investors purchase certificates backed by aircraft rental revenues. EETCs permit financing aircraft acquisitions at reduced costs (typically 3-5% for senior tranches) without raising direct equity capital. EETCs are marketed in the United States under American law (13th century English trust law) and securitize aircraft financing operating lease payments.

ECA-Backed Leasing (Export Credit Agency): Export credit agencies (such as Bpifrance in France, OECD Export Credits, or American equivalents) support financing for construction or acquisition of aircraft from national manufacturers (Airbus for France/EU, Boeing for USA). These programs reduce financing costs and extend repayment periods.

JOLCO (Japanese Operating Lease Company): Japanese aircraft leasing companies (JAL, ANA, MITSUI) are major owners of commercial aircraft globally. A JOLCO acquires aircraft and leases them to airlines. This approach benefits from Japan's low cost of capital status and banking stability.

CFC Rules and Anti-Abuse Rules (Art. 209 B CGI, IRC Subpart F)

For estate planning structures involving low-tax foreign entities, applicable anti-abuse rules constitute major constraints.

In France, Article 209 B of the CGI automatically imposes French taxation on income from foreign entities treated as investment or asset management companies, whose income derives from passive investments (financial income, dividends, real estate income). This provision targets foreign holding structures accumulating undistributed income.

However, an exemption applies if the foreign entity conducts substantial business activity in its home State and pays effective local tax comparable to French rates. An aircraft held via an Irish company and actively leased (charter or rental) potentially benefits from this exemption, as rental income constitutes substantial business activity.

In the United States, IRC § Subpart F imposes immediate taxation on "passively invested" income (interest, dividends, annuities) generated by foreign controlled entities (Controlled Foreign Corporations – CFC). However, rental income from aircraft leasing (charter, leasing) generally does not constitute "passive income" under Subpart F, as it constitutes active business activity.

Article L. 64 A of the French Tax Procedure Code (LPF) codifies general anti-abuse doctrine. Any arrangement "made primarily to obtain a tax advantage" may be requalified by tax authorities. A foreign holding structure established essentially to reduce French ISAT or avoid French taxes, without genuine economic substance, faces the risk of tax requalification and adjustments.

Aircraft Management Agreement

Legal Structure of the Management Contract

The Aircraft Management Agreement (AMA) is the contract governing operational and administrative management of an aircraft owned by an owner (individual or entity). The manager (aircraft management company) assumes the following responsibilities: (1) maintenance and periodic inspections; (2) preservation of airworthiness certificate and certifications; (3) crew recruitment and management; (4) flight organization and logistics; (5) insurance and loss management; (6) regulatory compliance and administrative records; (7) concierge services and customer support.

A typical AMA specifies: (a) services provided (full management vs. à la carte services); (b) management fees (monthly fees, per-flight-hour fees, estimated maintenance fees); (c) manager liability in case of damage or accident; (d) termination conditions; (e) insurance and liability coverage; (f) ownership of charter revenues (if the aircraft is leased to third parties).

The manager does not acquire ownership of the aircraft; it remains merely a service provider. Ownership and owner obligations (registration, regulatory compliance, civil liability) remain the owner's responsibility. However, the manager may be held liable for management failures (negligence, non-compliance with mandatory inspections).

FAR Part 91 vs Part 135 (USA) / EASA Part-NCC vs Part-CAT (Europe)

In the United States, Federal Aviation Regulation (FAR) Part 91 applies to general aviation operations, including operation of private aircraft by individuals or businesses on a non-commercial basis. An aircraft operated under Part 91 is not authorized to generate direct revenues (commercial charter); only personal flights or intra-company operations (employee shuttles) are permitted.

FAR Part 135 governs regular and on-demand commercial aviation operations (commercial charter). An aircraft operated under Part 135 may accept commercial charters, generating revenues. However, Part 135 operation requires: (1) an Air Carrier Certificate (AOC – Air Operator Certificate) issued by the FAA; (2) substantial civil liability insurance (typically $100-300 million USD); (3) formal operating procedures; (4) licensed and trained crew; (5) regular documented maintenance; (6) regular FAA audits and inspections.

In Europe, EASA Part-NCC (Non-Commercial Complex Aircraft) governs non-commercial operation of complex aircraft (private jets). An aircraft under Part-NCC may fly with crew and passengers on a personal basis, without commercial restriction. Conversely, EASA Part-CAT (Commercial Air Transport) governs regular commercial operation. An aircraft under Part-CAT may accept commercial charters, under an AOC issued by EASA or a national aviation authority (DGAC for France).

Transitioning from private to commercial operation involves additional costs: insurance, inspections, crew qualification, AOC certification (multiplying annual costs by 3-5).

Tax Implications of the Management Agreement

The existence and structure of an Aircraft Management Agreement directly affects the owner's taxation.

In France, an owner who entrusts aircraft operation to a professional external manager, while abstaining from active participation, may potentially deduct management fees from taxable profit. AMA fees (monthly fees, maintenance provisions) constitute tax-deductible professional expenses if the aircraft is used in professional activity. Conversely, an aircraft owned personally, without direct revenue-generating activity (charter), remains subject to ISAT (Solidarity Tax on Tourism Aircraft) without possibility of deducting expenses.

In the United States, under IRC § 162, management fees for aircraft used in professional activity are deductible. However, IRC § 274(a) limits deductibility of "luxury aircraft" expenses used personally or for entertainment. A business owner using his aircraft 30% for business and 70% for leisure may deduct only 30% of expenses. This rule incentivizes operators to carefully document business vs. personal use.

The ownership structure via an SPV or holding company optimizes tax deductions. An operating company (French or American) formally holds the aircraft and incurs AMA fees as professional expenses. This approach strengthens the tax deductibility of expenses.

Compliance and Safety Obligations

Anti-Money Laundering (AMLR, Annex IV for Aircraft)

EU Regulation 2024/1624 (Anti-Money Laundering Regulation – AMLR), effective 1 January 2024, significantly expands anti-money laundering compliance obligations applicable to aircraft. Annex IV of the AMLR regulation includes aircraft in the list of "high-risk" assets above a threshold value (set at €7.5 million in the current regulation version).

For acquisitions of aircraft > €7.5M, buyers must satisfy enhanced compliance obligations:

Sellers, brokers, and certification agencies (asset advisors) involved in the transaction must also comply with due diligence obligations, identification of beneficial owners, and suspicious activity reporting. Failure to comply exposes parties to administrative penalties (2 to 10% of turnover or millions of euros) and criminal prosecution (aggravated fraud, money laundering).

In practice, sellers of high-end aircraft implement a rigorous process for evaluating the counterparty: background verification, consultation of OFAC/EU sanction lists, financing source verification, assessment of buyer's legal structure. These verifications may extend the transaction process by 2 to 4 weeks.

OFAC Sanctions and EU Lists

Aircraft, particularly ultra-premium jets, are assets susceptible to use by politically exposed persons (PEPs), oligarchs, or entities under economic sanctions. The Office of Foreign Assets Control (OFAC), agency of the US Treasury Department, maintains several sanction lists: SDN (Specially Designated Nationals), List of Foreign Sanctions Evaders, List of Russian Oligarchs, Russia-related Sanctions Designations.

The EU sanction list (restrictive measures) is regularly updated by the EU Council and includes persons and entities under sanctions for geopolitical reasons (Russia, Belarus, Iran, North Korea, etc.). Aircraft sellers and operators must, before any transaction or charter acceptance, consult these lists and refuse any transaction involving a listed person or entity. Violations of OFAC or EU sanctions expose parties to massive criminal penalties (up to $20 million USD in OFAC civil penalties) and criminal prosecution.

Since Russia's invasion of Ukraine in February 2022, OFAC/EU sanctions have tightened and numerous Russian oligarchs have had their aircraft seized. Transactions involving Russian nationals or Russia-related structures require enhanced due diligence.

Export Controls (EAR, ITAR for Certain Aircraft)

Certain aircraft, notably those equipped with advanced technology (avionics systems, engines, defense equipment), are subject to American export control regimes: EAR (Export Administration Regulations, administered by the Bureau of Industry and Security) and ITAR (International Traffic in Arms Regulations, administered by the State Department).

Beneficial Ownership Control

Modern jurisdictions (France, EU, United States) have adopted beneficial owner transparency obligations aimed at combating money laundering and tax evasion. A beneficial owner is the natural person who, ultimately, owns or controls the entity (company, trust, foundation) holding the aircraft.

Practical Guide: Steps in the Aircraft Transaction

Pre-Contractual Phase: LOI, Due Diligence, Title Search

Any aircraft acquisition involves a critical pre-contractual phase, during which buyer and seller exchange information and validate the technical and legal feasibility of the transaction.

Letter of Intent (LOI): Non-binding document signed by the parties: aircraft description, price, payment terms, seller representations, timeline, 30-60 day exclusivity.

Technical Due Diligence: Inspections by certified technicians (Part 145), examination of critical systems, verification of maintenance, test flights, inspection report. Cost: €50K-500K.

Title Search: Verification of title clearance, registration history, mortgage/lien registers, Cape Town register, third-party claims, ownership history 5-10 years.

In France: DGAC, Commercial Court, Court of Appeal. United States: UCC-1, FAA Aircraft Title Database, FAA lien register.

Contractual Phase: APA, Escrow, Precedent Conditions

Key APA Elements:

Escrow: Buyer deposits 10-20% of the price with a third-party depositary (bank/counsel), release upon satisfaction of closing conditions and verification of clear title.

Suspensive Conditions: Regulatory approval, financing, adequate insurance, satisfactory due diligence, absence of material change (MAC clause).

Closing Phase: Bill of Sale, De-Registration, Re-Registration

The closing is the final phase during which buyer and seller finalize the transaction and transfer ownership and possession of the aircraft.

Bill of Sale and Ownership Transfer: Legal transfer of ownership occurs via a Bill of Sale (sales agreement), document signed by seller and buyer attesting to the transfer of ownership for valuable consideration. Under French law, this document constitutes proof of ownership transfer (Article 1315 of the Civil Code). Under Anglo-Saxon and American law, the Bill of Sale is the key document establishing the transferred title of ownership.

The Bill of Sale must stipulate: (a) complete identity of the parties (seller and buyer); (b) complete description of the aircraft (model, manufacturer, serial number, current registration); (c) agreed price and payment terms; (d) seller warranties (ownership free and clear, absence of privileged liens); (e) delivery and taking possession terms; (f) date of signature and effective date; (g) certified or notarized signatures.

Aircraft De-Registration: Prior to re-registration in the new State, the aircraft must be de-registered from the current registry. In France, de-registration with DGAC requires a file including: (1) de-registration request from former owner; (2) valid airworthiness certificate; (3) insurance certificate; (4) updated maintenance logs. De-registration processing typically takes 1 to 2 weeks.

In the United States, de-registration with the FAA is simpler: submit an application Form AC Form 8050-1 (Aircraft Registration Application) with notation "request for cancellation." De-registration takes effect within 24 hours.

Re-Registration: Once the aircraft is de-registered from its original registry, it may be registered in the new State. Re-registration requires a complete file: (1) Bill of Sale transmitted to the new registry; (2) ownership certificate from the prior registry (historical data); (3) new registration application (in France: DGAC; in the United States: FAA Form 8050-1; in the Cayman Islands: CAACI). Re-registration processing typically takes 2 to 4 weeks in France, a few days in the United States.

Airworthiness Certificate: After re-registration, the aircraft must obtain an airworthiness certificate (airworthiness certificate) from the new State. This requires a take-over inspection (initial inspection) taking 1 to 2 weeks. Once the certificate is issued, the aircraft is legally authorized to fly under the new registration.

Registration of International Interest (if applicable): If the aircraft is financed by a creditor, the creditor proceeds to registration of an International Interest in the Cape Town international register within 24 hours following closing, to secure its guarantee worldwide.

Typical Closing Checklist

The closing constitutes a critical phase where buyer and seller finalize the transaction. A typical checklist ensures that all documents, payments, and ownership transfers are properly executed. Key points include: (1) final verification of airworthiness and absence of material change (MAC); (2) delivery of signed Bill of Sale; (3) verification and release of escrow funds; (4) signature of the Aircraft Management Agreement (if applicable); (5) instruction of de-registration to the former registry; (6) preparation of re-registration application to the new registry; (7) verification of buyer's in-force insurance; (8) final crew briefing and operations personnel; (9) archiving of maintenance logs and technical documents.

For financed aircraft, registration of International Interest in the Cape Town register must occur within 24 hours following closing. Close coordination among attorneys, brokers, and managers is essential.

Conclusion

The acquisition or disposal of a private jet constitutes a complex legal, tax, and estate operation requiring multidisciplinary expertise. From verification of title of ownership via international registers, to cross-border tax optimization through compliance with anti-money laundering obligations, each step requires particular vigilance. The applicable regulatory frameworks – Chicago Convention, Cape Town Convention, EASA/FAA standards, French and American tax regimes, AMLR obligations – constitute a multi-layered legal landscape that only high-level aeronautical experts can navigate safely.

The choice of registration registry (France, United States, Cayman Islands, Ireland) determines long-term tax implications. Structuring via French SAS, Delaware LLC, or Irish corporation offers distinct advantages depending on the owner's profile and exploitation strategy. Optimal use of leasing mechanisms, EETC, SPV, and estate planning structures can significantly reduce overall tax burden, provided anti-abuse rules are respected. Adoption of best practices in due diligence, insurance, aircraft management, and anti-money laundering compliance minimizes legal and operational risks.

Faced with increasingly complex regulation and expectations from tax and compliance authorities, any buyer or seller of a significant-value private jet must surround themselves with expert counsel: attorney specialized in international aeronautical law, cross-border tax advisor, estate planning expert, AMLR compliance consultant, experienced aviation broker. This collaborative approach, while costly (legal and advisory fees 0.5 to 2% of transaction price), secures the operation, avoids post-sale disputes, and guarantees sustainable and legal tax optimization compliant with global standards.

Victoris Avocats, 34 Avenue des Champs-Elysées, 75008 Paris.