Skip to content

Flags of convenience: Why some countries are more attractive than others when registering aircraft

Oct. 29, 2022
5 min read
planes lined up runway
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Clear Mediterranean waters, year-round balmy weather and rich history make the island of Malta a top tourist destination, but these are not the only reasons why Ryanair, Wizz Air and Eurowings have set up shop in the European Union’s smallest member state.

Forty air operators with a combined fleet of more than 500 aircraft were on Malta’s registry as of last month; this number makes the tiny Mediterranean country one of a handful of jurisdictions that punch well above their weight when it comes to aircraft registrations.

The usual names still top the league tables, however. Data from aviation analytics firm Cirium shows the U.S. leading by a huge margin in all aircraft categories, including commercial, executive and general aviation; other large countries such as China, Canada and Brazil follow at a distance.

However, not all countries leading the way in aircraft registries are large in size, as the case of Malta shows. Other smaller jurisdictions like Ireland, Bermuda and the Cayman Islands have also carved a remarkable niche in the global aircraft registration market.

You may assume that the reason behind these smaller nations offering a noticeable number of aircraft registrations is because of taxes. While some of these jurisdictions may indeed have tax advantages for registering aircraft, TPG consulted different industry experts who downplayed this factor.

So why, then, do some smaller countries offer comparable numbers of aircraft registrations? We took a closer look to find out.

Ryanair Boeing 737-800 on the runway at the Dublin Airport. JJFARQUITECTOS/TWENTY20

Service reigns supreme

“Tax has become less of a factor in attracting new aircraft operating aircraft certificates and registrations, particularly since the introduction of harmonizing European directives in the field of taxation in the last decade," Stephan Piazza, a lawyer who specializes in aviation and shipping advisory services at accounting organization KPMG's Malta office, said. "This is a trend that is likely to continue."

If taxes are not behind the high number of aircraft registrations in smaller jurisdictions, what is? Simply put, it's the speed of service these nations are able to provide.

“The Malta registry is a very service-oriented authority," Piazza said. "Regulatory approval that can take months in a larger jurisdiction can be done in a matter of weeks here while ensuring, at the same time, the highest levels of regulatory compliance.”

Sign up for our daily newsletter

Others further highlighted this point, including David Colindres — president of the San Marino Aircraft Registry which oversees aircraft registries in the tiny independent microstate of San Marino (where there is no airport).

“Service is the main factor here,” Colindres said. “When a jet is purchased, high net worth individuals and companies want to get them operational as soon as possible, and this is something we can do. We take pride in our ability to respond very quickly. We work very closely and align with the government, although the registry is run as a private business.”

Unsurprisingly, this ability to quickly register aircraft seems to resonate with executive jet operators.

Related: The flying megayacht: Italian designer devises exclusive catamaran blimp

Location, location, location

Beyond seeking speedy service, operators aim to reap as many benefits as possible from the jurisdiction they pick for registering their aircraft.

“When choosing where to register an aircraft, it is important to consider the geographical region where this aircraft is going to be primarily operating,” Brian Skehan, an industry executive and managing director of SARC, a consultancy firm specializing in aviation regulation, said.

Doing so will likely come with some added perks.

Malta, Ireland and Austria, for example, are EU members, so their fleets can operate unimpeded throughout the EU without the need to get a Third Country Operator authorization.

Related: How overflight rights open new markets for Israeli airlines

Policies matter

Malta's Prime Minister Robert Abela and Health Minister Chris Fearne. JONATHAN BORG/XINHUA NEWS AGENCY/GETTY IMAGES

Specific policies also play a part in deciding where to register an aircraft.

The international framework that regulates civilian aviation — of which the Convention on International Civil Aviation (also known as the Chicago Convention) is a foundational stone — offers a degree of flexibility for countries to prioritize certain interpretations of registration rules so they can attract more aircraft owners and operators.

For example, in some jurisdictions, an aircraft has to be registered by its beneficial owner; other jurisdictions permit more complex ownership structures, providing extra flexibility to operators. The latter is another reason why Ireland regularly draws operators to its shores to register their aircraft.

Malta's ratification of the Cape Town Convention — an international treaty that protects ownership rights of highly mobile assets like aircraft — in 2010 also explains how it became a major player in aviation services. In making this move and subsequently revamping its aircraft registry to better align with business interests, the country has invested more in maintenance and improving facilities, which operators can then benefit from. We are not talking about a simple annotation on a ledger here, but about hard, tangible metal rolling on the tarmac of the local airport.

Related: The Super Hercules' little known civilian life: How airlines operate the famous transport commercially

Bottom line

Just as countries compete with each other in a quest to attract foreign investment to their economies, the same happens in the market for aircraft registrations. The aircraft registry has become a key tool for those territories that, regardless of their size, want to play their part in the development of the global aviation industry.

Featured image by TED HOROWITZ/GETTY IMAGES
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Top offers from our partners

How we chose these cards

Our points-obsessed staff uses a plethora of credit cards on a daily basis. If anyone on our team wouldn’t recommend it to a friend or a family member, we wouldn’t recommend it on The Points Guy either. Our opinions are our own, and have not been reviewed, approved, or endorsed by our advertising partners.
See all best card offers

TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day

Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023