Excellence & innovation in aviation regulation

Civil Aviation Authority of the Cayman Islands (CAACI)

When it comes to aircraft registration, jurisdiction matters. For owners, financiers, and operators navigating the complex world of international aviation, the Cayman Islands has emerged as a jurisdiction of choice, offering a compelling combination of stability, efficiency, and sophistication that few other registries can match. We have highlighted below the key reasons owners, financiers and operators regard the Cayman Islands as the jurisdiction of choice for aircraft registrations.

A foundation built on stability

The story of the Cayman Islands’ success in aviation registration begins with its remarkable political and economic stability. As an overseas territory of the United Kingdom, this Caribbean jurisdiction enjoys the best of both worlds: the backing and credibility of British governance, combined with substantial autonomy in managing its own affairs.

The Cayman Islands has operated with a stable parliamentary democracy, electing a Parliament every four years handling local governance, while a UK-appointed Governor oversees matters including internal security and serves as the vital link between the Cayman Islands and Westminster. This dual structure has created an environment of predictability and reliability that aviation stakeholders find essential when making long-term investment decisions.

The Cayman Islands’ economy continued its growth streak in 2024, with real GDP expanding by 3.1% to $5.21 billion, underpinned by expansion across all major sectors. With this continued growth, and a Moody’s credit rating of Aa3, the Cayman Islands ranks among the world’s top 20 financial centres. But perhaps more importantly for the aviation industry, it has achieved this status while maintaining a tax-neutral environment, which creates an exceptionally favourable framework for crossborder transactions.

Some might question whether a tax-neutral jurisdiction can maintain international credibility, but the Cayman Islands has systematically addressed this concern. As an early adopter of FATCA and the OECD’s Common Reporting Standard, the jurisdiction has demonstrated its commitment to transparency and compliance. It has implemented comprehensive frameworks including the International Tax Co-operation (Economic Substance) Law and maintains 36 bilateral agreements on tax information exchange. The jurisdiction has successfully balanced international compliance standards with appropriate privacy protections.

The political stability, highly developed legal system and infrastructure and its position as an international financial centre make the Cayman Islands the jurisdiction of choice for registration of aircraft.

A legal system based on English common law

For financiers and aircraft owners alike, legal certainty is paramount. The Cayman Islands delivers this through a sophisticated legal system rooted in English common law, with the UK Privy Council serving as its final court of appeal. This connection provides an assurance that few other jurisdictions can offer: that legal principles will be interpreted and applied consistently with centuries of established precedent.

The primary aviation legislation, the Air Navigation (Overseas Territories) Order as amended from time to time, is a UK statutory instrument that extends proven regulatory standards to the territory. Supplemented by the Overseas Territories Aviation Requirements (OTARs) and various local statutes, this framework creates a comprehensive regulatory environment that international stakeholders understand and trust.

The British-based system of registration for both aircraft and aircraft mortgages within a stable legal system based on English common law is another compelling reason to choose to register an aircraft and any associated aircraft mortgage in the Cayman Islands. This system of registration thus appeals to aircraft owners and financiers alike.

The political stability, highly developed legal system and infrastructure and its position as an international financial centre make the Cayman Islands the jurisdiction of choice for registration of aircraft

The CAACI: where efficiency meets expertise

At the operational heart of the Cayman Islands’ aviation success story is the Civil Aviation Authority of the Cayman Islands (CAACI). Established in 1987, this statutory body has built a reputation that extends far beyond what one might expect from a small jurisdiction.

The CAACI’s responsiveness continues to distinguish it in an industry where timing is critical. Its due diligence process is typically approved within 2–3 business days, and aircraft registrations generally progress within an average timeframe of 3 to 6 weeks. The registry also facilitates same-day mortgage registrations and Cape Town filings, all while upholding the rigorous standards expected of a leading regulatory authority.

Consider the practical advantages: the authority deploys highly qualified, full-time airworthiness surveyors to inspect aircraft at their home bases or other designated facilities eliminating the need for costly and time-consuming aircraft repositioning. The use of full-time surveyors assists in the CAACI building long term relationships with clients. Letters of Authorisation for operational and airworthiness approvals are issued within days rather than the weeks or months common elsewhere.

Bespoke electronic document management system: VP-C Online

Recognizing that aviation operates around the clock, the CAACI provides 24/7 access through its VP-C Online system for applications, securely depositing documents and provides a mechanism for checking the status of works in progress.

The VP-C Online platform itself represents a significant technological advancement—a customised electronic document management system that allows authorised users to access their aircraft’s documentation at any time, from anywhere. This isn’t simply digitization for its own sake; it’s a carefully designed system that streamlines processes and provides genuine operational advantages.

Ease of operation into US airspace

For many aircraft operators, access to United States airspace is essential. Here the Cayman Islands offers a distinctive advantage: operators of Cayman Islands-registered aircraft are exempt from certain TSA Waiver Authorization requirements that apply to many other foreign registrations.

This exemption provides significant operational flexibility. Normally, operators seeking to fly within or over US airspace must submit TSA Waiver Authorization applications five to seven business days in advance, as requests must be processed through multiple agencies. Without proper authorization, flights face diversion, grounding, or cancellation. The ability to operate on shorter notice can be operationally critical and economically valuable, particularly for business aviation where schedule flexibility often provides competitive advantage.

Protecting financial interests

For financiers, the security of their interests is non-negotiable. The Cayman Islands provides multiple layers of protection that have made it particularly attractive to the lending community.

The jurisdiction’s participation in the Cape Town Convention, which entered into force for the Cayman Islands in November 2015, provides internationally recognized protections for security interests in aircraft equipment. But recognizing that the Convention doesn’t apply in all circumstances, the Cayman Islands has maintained its local mortgage registration regime, and many sophisticated financiers utilize both systems for maximum protection.

The Mortgaging of Aircraft Regulations, 2015 (MAR) offers several compelling features. Registration is straightforward, with no requirement that the mortgage be governed by Cayman Islands law. Once registered, mortgages remain valid for their entire duration without renewal requirements.

The priority system provides clear certainty: registered mortgages receive statutory priority over subsequently registered and unregistered mortgages, with this priority remaining unaffected by mortgagor bankruptcy. Even before aircraft registration is complete, mortgagees can protect their position by filing priority notices that prevent other security interests from jumping ahead in line.

The mortgage register itself is publicly searchable for a nominal fee, providing transparency while the registration process remains efficient. Deregistration is equally straightforward, requiring a mortgage discharge form and accompanying legal documents including a Deed of Release.

For leased aircraft, the CAACI goes further, providing ‘comfort letters’ to lessors and owners that acknowledge ownership and leasing structures and confirm that aircraft removal requires written authorization from the lessor or owner. These letters, noted on the Aircraft Register, provide an additional protection layer that lessors appreciate.

A hub for aviation business

The Cayman Islands hasn’t simply focused on registration; it has created infrastructure to support aviation businesses more broadly through the Cayman Maritime & Aviation City, a special economic zone designed to facilitate aviation businesses.

The advantages are substantial: tax neutrality; 100% foreign ownership permitted; three-to-four week fast-track licensing; and a ‘one-stop-shop’ administration that consolidates rent, licensing fees, and work permit fees into a single annual payment. The authority can obtain renewable five-year work and residency visas within five working days regardless of employees’ country of origin, with no maximum limit on work permits.

For companies seeking to obtain a Cayman Islands Air Operator’s Certificate (AOC)—which requires demonstrating a principal place of business in the Cayman Islands—the Maritime & Aviation City provides an efficient, practical solution. This creates opportunities for commercial operations that might otherwise face significant barriers to entry.

Innovation in transition registration

One of the CAACI’s most innovative offerings addresses a specific pain point in the aviation finance industry: what happens when aircraft are transitioning between leases or have been repossessed? The CAACI’s transition register provides a solution.

This isn’t a parking lot for end-of-life aircraft; rather, it’s a temporary registration facility for assets in transition. Lessors and financiers can register aircraft on a respected registry while they work through remarketing, sale, or storage arrangements. The CAACI actively works with lessors and financiers to maintain aircraft and keep certificates current, preserving asset value during what can be a challenging period.

The registration service is quick and cost-competitive, while deregistration is streamlined and can be completed same-day when needed. During the transition period, the CAACI issues special flight authorizations to accommodate ferry flights, and aircraft remain subject to any registered mortgages, maintaining financier protections.

This offering demonstrates the CAACI’s understanding of practical industry needs and its willingness to develop creative solutions that add genuine value.

Making registration work in practice

The practical mechanics of Cayman Islands registration are designed for efficiency. The Aircraft Register is primarily a ‘private register’, focused on aircraft not operated for hire or reward, though commercial operations are permitted under specific circumstances including Article 83 bis agreements and memoranda of understanding with other aviation authorities, and those established in the Special Economic Zone (SEZ).

Eligibility requirements are broad, encompassing UK nationals, Commonwealth citizens, nationals of European Economic Area States or the Swiss Confederation, and appropriately structured companies incorporated in those jurisdictions.

The CAACI’s policy is to only accept aircraft with a Maximum Take-Off Weight (MTOW) exceeding 12,500 lbs./5,700kg. Exceptions are considered based on generality of interests to aviation on the CIAR in respect of modern light turbojet, turboprop aircraft and helicopters based on Cayman Islands registered yachts, demonstrating flexibility where appropriate.

The compelling case

The Cayman Islands’ success in aircraft registration isn’t the result of any single factor but rather the combination of multiple advantages that together create an exceptionally attractive package. Political and economic stability provides the foundation. A sophisticated legal system based on English common law offers certainty.

The CAACI delivers efficiency, professionalism, and genuine expertise. Exemption from certain TSA requirements facilitates US operations. Registration and mortgage procedures provide strong security while remaining straightforward. The Maritime & Aviation City offers infrastructure for aviation businesses. And innovative solutions like the transition register address real industry needs.

For owners, financiers, and operators evaluating where to register aircraft, the Cayman Islands presents a compelling value proposition. It offers the stability and legal sophistication of an established aviation jurisdictions while maintaining the efficiency and responsiveness. In an industry where certainty, security, and operational efficiency are paramount, the Cayman Islands has positioned itself not just as a viable alternative, but increasingly as the jurisdiction of choice.

As international aviation continues to evolve, with increasing complexity in ownership structures, financing arrangements, and operational requirements, the Cayman Islands appears well-positioned to remain at the forefront of aircraft registration. Its combination of established strengths and continued innovation suggests that more aircraft will be carrying the VP-C registration prefix in the years ahead.