Navigating U.S. Citizenship Requirements and Aircraft Registration Solutions
The Federal Aviation Administration (“FAA”) requires U.S. registered aircraft (“N” number aircraft) to be owned by U.S. citizens or resident aliens, unless a registration exception applies. Registering an aircraft in violation of FAA regulatory requirements can trigger substantial civil penalties and, in extreme cases, prison time of up to three years.
The definition of U.S. citizen for aircraft registration is not intuitive. The citizenship statue pre-dates the creation of the limited liability company and the complex cross-border tax planning structures that exist in private equity fund structures. Because the statute did not anticipate these corporate structures, many U.S.-based companies and private equity funds fail the U.S. citizen test even though their operations are managed and controlled by U.S. citizens. These entities are then required to register their aircraft using one of the highly regulated alternative registration options.
The FAA defines a citizen of the United States as (49 USC § 40102(a)(15)):
(A) an individual who is a citizen of the United States;
(B) a partnership each of whose partners is an individual who is a citizen of the United States; or
(C) a corporation or association organized under the laws of the United States or a State, the District of Columbia, or a territory or possession of the United States, of which the president and at least two-thirds of the board of directors and other managing officers are citizens of the United States, which is under the actual control of citizens of the United States, and in which at least 75 percent of the voting interest is owned or controlled by persons that are citizens of the United States.
Aircraft Registration for Non-U.S. Citizens
Aircraft owners that do not meet U.S. citizenship requirements have alternate registration options available to them to own N-number registered aircraft. The most frequently used options are non-citizen aircraft owner trusts and based and primarily used aircraft registration. These options are generally workable solutions for most owners and require a limited amount of ongoing administrative work to manage compliance.
The non-citizen aircraft owner trust. A non-citizen owner trust is a revocable grantor trust with a U.S. citizen trustee (14 CFR § 47.7(c)). Aircraft registration trusts are often formed in Utah under the state’s favorable trust formation laws. The trust acts as the aircraft’s registered owner and holds title to the aircraft for the benefit of the trust’s beneficiary, typically the party that will operate the aircraft. The aircraft operator/beneficiary enjoys the benefits of aircraft ownership with the added benefit of increased privacy because the FAA aircraft registry identifies the trust, not the beneficiary, as the registered owner.
The trustee (trust company) must comply with the FAA’s aircraft registration requirements, and the trustor/beneficiary (aircraft operator/user) must agree to timely respond to information requests from the trustee. These requests can include aircraft location or information about aircraft incidents and accidents. In practice, the trustee rarely contacts the trustor with information requests.
Choosing a reputable trust company for registering an aircraft in trust is vital. In January of 2026, the FAA notified Southern Aircraft Consultancy Inc. (an aircraft trust company) that all of its aircraft registration certificates were invalid because the company was in violation of U.S. citizenship requirements when it submitted aircraft registration applications. The FAA instructed SACI to surrender their aircraft registration certificates, which resulted in the immediate grounding of their customers’ aircraft.
Based and primarily used aircraft registration. A non-U.S. citizen may own and register an aircraft in a corporation if the aircraft will be based and primarily used in the United States (14 CFR § 47.9(a)(3) and (b)). An aircraft is based in the U.S. if the aircraft resides in the U.S. For example, the aircraft has hangar space at a U.S. airport. The owner must list on the aircraft’s registration application the U.S. address where the aircraft records are available to the FAA for inspection. The aircraft is primarily used in the U.S. if at least 60% of the aircraft’s total flight hours during the preceding six-month period were flown in the U.S. These non-stop flights must be flown between two points in the U.S. to count towards the 60% rule. So, a flight from New York to the Bahamas does not count towards the 60% requirement but a flight from New York to Washington, D.C. will count.
To register an aircraft under based and primarily used, the owner submits an FAA aircraft registration application (checking box “c”) and a certified copy of the company’s certificate of incorporation.
Approximately 7 months after the registration application is filed with the FAA, the FAA will mail a form to the owner to report the aircraft’s flight hours. The form is mailed to the address listed on the registration application, and the form will arrive in a generic white envelope. When the form is received, the owner may either check the box that the aircraft has been operated exclusively in the U.S. or report the total flight hours flown during the last 6-month period and the hours flown in the U.S. during that same time. A best practice is to calendar a 7-month reminder to look for the FAA envelope. The FAA will cancel the aircraft’s registration if the form is not returned timely.
If the operator fails to fly at least 60% of the aircraft’s hours in the U.S., then the FAA will cancel the aircraft’s registration. Aircraft owners should carefully track their hours flown in the U.S. to avoid registration cancellation.
The attorneys at Jetlaw, LLC are experienced in helping clients determine if they meet the definition of U.S. citizen and in evaluating FAA-compliant aircraft registration options for their specific ownership and operating structures. Contact Kali Hague with questions by clicking here.