San Marino Offers New Aircraft Registration Choice

 - November 2, 2012, 5:10 AM
Jorge Colindres, CEO of the Aviation Registry Group (left), and San Marino civil aviation director Marco Conti recently signed a 10-year exclusive agreement for ARG to administer the European state’s new aircraft registry.

San Marino is introducing a new aircraft registry in partnership with U.S.-based Aviation Registry Group (ARG), which already administers Aruba’s offshore registry. The landlocked microstate, which has no airport and is surrounded by Italy, will be outsourcing all technical tasks to ARG, which is promising to ensure high safety standards as well as competitive pricing and flexible service that will be competitive with the Isle of Man’s highly successful offshore registry. The registry becomes active on December 1.

ARG and the government of San Marino, which has had its own civil aviation department since 2001, have signed a 10-year exclusive agreement. Guidelines for the new registry, which will be designated by tail numbers beginning with T7, have been agreed that will see ARG’s network of inspectors “recommend” aircraft as suitable for registration by the San Marino authorities. San Marino has agreed to abide by the standards of the European Aviation Safety Agency.

The Miami-based company will use the same Aircraft Registration Management System that it has developed to run the Aruban registry, which it has done since 1995. The system allows it to track all necessary aircraft and pilot approvals, as well as details such as insurance. ARG president and CEO Jorge Colindres explained that the Aruba and San Marino registers will be run by separate divisions of the group.

Offshore Registry Alternative

Aircraft registered in San Marino will not be subject to import duties or value-added tax. Aircraft on the San Marino registry cannot be based in Italy, which recently introduced a controversial new luxury tax on private aircraft. Aircraft can be “imported” into the European Union as long as they don’t spend more than 180 days per year in the EU.

Colindres told AIN that the administration of the new registry will operate on a 24/7 basis with a high degree of responsiveness. ARG is targeting aircraft owners from Asia, and especially from China and India, who may seek an alternative to restrictive bureaucracy and tax issues in their own countries.

ARG and San Marino have yet to disclose the fee structure for the new registry, but Colindres indicated that charges are likely to start at approximately 5 percent less than those on the Isle of Man, which has registered more than 500 aircraft since the registry was established in 2007. “Aruba, Bermuda and the Cayman [Islands] were blown away by the Isle of Man,” said Colindres. “We want to bring aircraft to the San Marino registry and provide a high-quality jurisdiction and safety standards to retain the residual values of aircraft,” he said.

There is no need to establish a company in San Marino to join the country’s aircraft registry. The state is on the so-called White List drawn up by the Organization for Economic Cooperation and Development to control the use of offshore tax shelters.

ARG has a network of 45 aircraft inspectors located around the world, with many of them being former officials with well respected aviation agencies such as the UK CAA and ICAO. The company says it can get an inspector to a client’s home base very quickly and will aim to be able to complete a registration within one day.

Like the Isle of Man, San Marino will accept only privately operated aircraft to start with, although it does want to expand the register to commercially operated aircraft when it is ready to provide the higher degree of responsibility and oversight that this would require. “We are very mindful of illegal charter. In Aruba, we have already shut down some private operators doing charter,” said Colindres. “We do audits on operators and sometimes you can just tell from the logbooks that they are flying charter.”

One possible market niche for the new San Marino registry could be to offer aircraft operators restricted by blacklists such as that imposed by the European Union on states not meeting ICAO safety standards. In countries such as Kazakhstan, ARG believes its inspectors can work with operators and local officials to help them to find a way to comply with the required standards by registering aircraft outside their own country.