How to Buy a Private Jet: 10 Legal Steps From LOI to Cape Town Registration

How to buy a private jet: the 10 steps at a glance

The short answer is that a jet purchase moves from structure, to offer, to diligence, to contract, to inspection, to closing and registration, and each stage produces a document the next stage depends on. A first-time buyer who gets the order wrong, for example by signing a binding contract before choosing the owning entity or the register, often pays twice: once in fees to unwind the structure and again in delay. The table below sets out the ten steps this guide follows and the main legal output of each.

Step	What happens	Key document or filing	Who usually leads
1. Ownership and operation	Decide the owning entity and whether the jet will fly privately or commercially	Company or trust documents, management agreement	Private client and tax advisers
2. Choice of register	Check the owner qualifies for the chosen national register	Eligibility analysis, mark reservation	Aviation lawyer
3. Letter of intent	Agree price, deposit, inspection and timetable in principle	LOI and deposit escrow	Broker and aviation lawyer
4. Searches	Confirm title and look for registered interests	National register extract, International Registry priority search certificate	Aviation lawyer
5. Purchase agreement	Fix delivery conditions, warranties, risk and law	Aircraft purchase agreement	Aviation lawyer
6. Pre-purchase inspection	Technical review of aircraft and records	Inspection report, technical acceptance	Technical consultant
7. Finance and security	Lender takes security over the airframe and engines	Mortgage, international interest, IDERA	Finance lawyers
8. Compliance checks	Sanctions, anti-money laundering and know-your-customer review	KYC packs for escrow agent and lender	Compliance teams
9. Closing	Funds and title move simultaneously	Bill of sale, contract of sale registration	Escrow agent and lawyers
10. Registration and import	New certificate of registration, insurance, import tax position	Certificate of registration, insurance certificate	Aviation lawyer and tax adviser

The steps overlap in practice. Searches, inspection and finance often run in parallel once the letter of intent is signed, and registration paperwork is usually pre-positioned so that it can be filed within minutes of closing.

Step 1: Decide who will own the jet and how it will fly

The first decision is not which aircraft to buy but who will own it, because the owner's nationality and structure decide which registers are open and how the aircraft can be used. Individuals rarely hold business jets in their own name. The usual choices are a single-purpose company, an existing operating company, or a trust arrangement, and each has consequences for liability, tax and registration eligibility.

A dedicated owning company keeps the asset and its liabilities separate from the buyer's other businesses, and makes a later sale simpler because the shares or the aircraft can be sold cleanly. The choice between holding through a local entity or a foreign one raises the same questions advisers consider when a business decides between a branch or subsidiary when expanding abroad: where the entity is resident for tax, which law governs it, and who controls it.

The second half of the decision is how the jet will fly. A purely private aircraft, flown for the owner and guests without payment, is regulated very differently from one placed on an operator's air operator certificate and chartered to third parties when the owner is not using it. Some registers do not allow commercial air transport at all. The Isle of Man Aircraft Registry, for example, permits aircraft on its register to be operated only for private, corporate or aerial work purposes. Buyers who expect charter income to offset running costs need to know this before they choose a register, not after.

Personal tax position matters too. An owner who is changing country, or who relies on non-resident status, should check how a jet held through a company interacts with rules on UK tax residence and exit planning before the structure is fixed.

Step 2: Choose the register: UK, US and Isle of Man compared

An aircraft can only be registered in one state at a time, and each national register sets its own rules on who may own a registered aircraft. The UK Civil Aviation Authority will not register an aircraft that is still registered in another country, and asks for a de-registration statement from the previous registry, or a statement of non-registration from the exporting country for a new aircraft. That is why the choice of register must be settled early: it drives the documents the seller has to produce at closing.

The three registers below are common choices for business jets connected with the UK, Europe and the US. The figures are taken from each authority's published guidance.

Point	UK (G- register)	US (N- register)	Isle of Man (M- register)
Who may own	British citizens, EEA nationals and EEA-formed undertakings including UK companies, plus certain Commonwealth persons; others only if not used for UK commercial air transport	US citizens, qualifying US partnerships and corporations (president and two-thirds of directors US citizens, 75% of voting interest US-held), lawful permanent residents, and US-organised non-citizen corporations if the aircraft is based and primarily used in the US	Owners meeting the registry's qualified ownership rules
Use permitted	Private and commercial (subject to operator approvals)	Private and commercial (subject to operator approvals)	Private, corporate or aerial work only; no commercial air transport
Application	Online form CA1	AC Form 8050-1 plus evidence of ownership	Checklist in Registry Publication 1, electronic submissions
Fee	£98 up to 15,000kg; £196 over 15,000kg	$5.00	Published fee schedule
Timing	Usually up to three working days; same-day service for an extra fee	Original application form required; online form available	Contact the registry early; dedicated case officer

The FAA's eligibility rules are the strictest on nationality, which is why non-US buyers who want an N- registration often use trust or other specialist structures; a US-organised company that is not a US citizen can register only if 60% of flight hours are on flights starting and ending in the US. The Isle of Man registry accepts aircraft over 2,730kg maximum take-off mass and directly accepts type certificates issued by EASA, the FAA, Transport Canada and Brazil's ANAC. Local advisers in the Isle of Man can confirm qualified ownership before the purchase agreement is signed.

Step 3: Agree a letter of intent and deposit

The letter of intent (LOI) records the commercial deal in principle so that both sides can spend money on inspection and documents. It typically identifies the aircraft by manufacturer, model and serial number, states the price, sets a deposit, names the inspection facility and sets a timetable for signing the full purchase agreement.

Most LOIs are expressed to be non-binding on price and the obligation to buy, but binding on a few points: exclusivity, confidentiality, how the deposit is held and when it is returned. Those binding clauses deserve careful drafting. A buyer should expect the deposit to be paid to a neutral escrow agent rather than to the seller or broker, and the LOI should say plainly that it is refundable if the parties do not sign a purchase agreement or if the buyer rejects the aircraft after inspection.

The LOI is also the moment to flag any structure that is not yet in place. If the owning company will be formed later, the LOI should allow the buyer to nominate it. If the buyer intends to finance the jet, the LOI should say so, because a lender will require its own conditions and timetable to be reflected in the purchase agreement.

Step 4: Run title, lien and registry searches

Before contracts are signed, the buyer's lawyers search every place where an interest in the aircraft could be recorded. For a jet that qualifies under the Cape Town Convention, that means at least two searches: the current national register, and the International Registry of Mobile Assets.

The International Registry is an electronic register that records interests in airframes, aircraft engines and helicopters on a first-to-file basis recognised by all ratifying states. It is operated by Aviareto, based in Dublin, as Registrar, under the supervision of ICAO as Supervisory Authority. A search returns a priority search certificate showing registered interests against the airframe and each engine, searched by manufacturer's name, model designator and serial number.

Not every aircraft is covered. The Convention applies to airframes certified to carry at least eight persons including crew, or goods over 2,750 kilograms, to helicopters certified for at least five persons or more than 450 kilograms, to jet engines of at least 1,750 lb of thrust and to turbine or piston engines of at least 550 rated take-off shaft horsepower. Most business jets and their engines meet those thresholds. Engines matter separately: they are registrable objects in their own right, so a lender or lessor can hold an interest in an engine that is not reflected on the airframe search.

Searches should be repeated immediately before closing, because a new registration made after the first search would take priority over an unregistered buyer or lender.

Step 5: Negotiate the aircraft purchase agreement

The aircraft purchase agreement (APA) is the contract that does the real work, and its central job is to define the condition in which the aircraft must be delivered and what happens if it is not. Everything else in the deal, from the inspection to the closing checklist, refers back to it.

Key terms advisers negotiate include:

• Delivery condition. The standard the aircraft must meet at delivery: airworthy, with all records, no outstanding damage, and with any agreed defects rectified at the seller's cost.
• Inspection and acceptance. Who chooses the inspection facility, how discrepancies are classified, which the seller must fix, and the buyer's right to reject.
• Delivery location. Where title passes. The location can have tax consequences and affects who pays to move the aircraft.
• Title and warranties. A warranty that the seller has good title free of liens, usually supported by a warranty bill of sale at closing; used aircraft are otherwise commonly sold "as is" on condition.
• Risk of loss. Risk stays with the seller until delivery and passes with title.
• Registry cooperation. An obligation on the seller to consent to the International Registry contract of sale registration and to discharge existing registrations at closing.
• Law and disputes. Governing law, and either a court or arbitration clause.

The dispute clause deserves more attention than it usually gets. Buyer and seller are often in different countries and the aircraft may be in a third. An arbitration clause needs a clear choice of seat rather than just a venue, while a court clause should be assessed against how easy it would be to enforce a judgment where the seller's assets are. Advisers who have dealt with enforcing a foreign judgment know how much time a weak clause can cost.

Step 6: Commission the pre-purchase inspection

The pre-purchase inspection is the buyer's technical due diligence: an independent facility examines the aircraft and its records, and the findings decide whether the buyer accepts the jet, renegotiates or walks away.

An inspection usually has two parts. The records review checks that maintenance history, airworthiness directives and component records are complete and traceable; gaps in records can reduce value as much as physical defects. The physical inspection, at a facility approved for the type, checks the airframe, engines and systems against the manufacturer's programme and any scope the buyer adds.

Legal points arise even in this technical stage. The APA should specify the scope of inspection, who pays for it, who pays to fix airworthiness discrepancies, and how long the buyer has to accept or reject. Inspection facility invoices should be settled before closing; guidance published by the National Aircraft Finance Association notes that unpaid inspection invoices can delay closing because the aircraft cannot leave for the delivery location until they are paid, and that buyer and seller costs need to be separated on those invoices. The same guidance recommends that tax planning be done during the pre-purchase inspection so that it can be implemented at closing.

Once satisfied, the buyer signs a technical acceptance, which converts the remaining conditions into closing mechanics.

Step 7: Arrange finance and Cape Town security

If the purchase is financed, the lender's security over the jet is created under the governing law of the loan documents and then protected internationally by registering an international interest on the International Registry. The Cape Town Convention defines an international interest as an interest in a uniquely identifiable object arising under a security agreement, a title reservation agreement or a leasing agreement.

Two further protections are standard in business jet finance. The first is the Irrevocable De-Registration and Export Request Authorisation (IDERA), signed by the owner in favour of the lender and lodged with the national aviation authority. In the US, the Cape Town Treaty Implementation Act of 2004 established the right to grant an IDERA and made the FAA's Civil Aviation Registry the authorising entry point for the International Registry, effective 1 March 2006. In the UK, the International Interests in Aircraft Equipment (Cape Town Convention) Regulations 2015 require the Civil Aviation Authority to honour a properly submitted de-registration and export request under a recorded IDERA, once the requesting party certifies that higher-ranking interests have been discharged or have consented.

The second protection is the insolvency remedy. Under regulation 37 of the UK regulations, when an insolvency-related event occurs the insolvency office holder must give possession of an aircraft object subject to a registered international interest to the creditor no later than the end of a waiting period of 60 days. That overlays the moratorium that otherwise applies when a company goes into administration in the UK, and it is one reason lenders price Cape Town jurisdictions more favourably. Aviareto notes that operators based in states that have made certain qualifying declarations are eligible for a discount on export credit premium rates under the OECD Aircraft Sector Understanding.

The approach is closer to a registry-based ranking system than to the court-led ship arrest process used for vessels, and it is why banking and finance advisers treat registration on the International Registry as a condition precedent to drawdown.

Step 8: Clear sanctions, AML and KYC checks

A jet purchase moves a large sum between parties who may be in several countries, so escrow agents, lenders and registries will each run their own know-your-customer and sanctions checks, and both sides should prepare for them early. Expect requests for corporate documents, ultimate beneficial ownership, source of funds and identification of directors.

Sanctions risk runs both ways. The buyer must be satisfied that the seller, any previous owner who still has an interest, and the aircraft's recent operations raise no sanctions issue, while the seller and its bank will ask the same questions of the buyer. Some registers build restrictions into their rules: the Isle of Man registry, for instance, states that aircraft on its register are prohibited from flying in Russia or Belarus. For transactions with any Middle East exposure, advisers should consider US secondary sanctions risk, and the scale of recent enforcement, such as the Bank of America AML and sanctions penalties, explains why banks handling the funds will not shortcut their checks.

Build compliance time into the timetable. A closing that slips because a bank's KYC review is incomplete can trigger deadlines in the APA and, in the worst case, put the deposit at risk.

Step 9: Close in escrow and transfer title

Closing is the moment when the purchase price is released to the seller, title passes to the buyer and the registry filings are made, all at once and usually through a neutral escrow agent. Done well, it is an anticlimax.

NAFA's closing guidance describes the sequence for a US-registered aircraft. The closing cannot occur until the aircraft arrives at the delivery location in the required delivery condition. The escrow agent holds pre-positioned documents and files them with the FAA registry. On the buyer's side that means the registration application on FAA Form 8050-1 and any lender documents; on the seller's side, the bill of sale on FAA Form 8050-2 and any lien releases. Outside the FAA forms, the APA will usually require a delivery receipt and a warranty bill of sale.

The International Registry filing happens at the same moment. Buyer and seller each need an active transacting user entity account so that the contract of sale can be registered at closing, and any lender's international interest is registered alongside it. Insurance should be bound shortly before closing, with separate certificates for any financier or manager. The guidance observes that the closing itself often takes less than ten minutes by email or conference call, because the work has been done beforehand.

Outside the US the documents differ but the logic is the same: simultaneous release of funds against a bill of sale, discharge of the seller's registered interests, and registration of the buyer's contract of sale and any new security.

Step 10: Register, insure and settle the import tax position

After closing, the buyer completes national registration, puts insurance in place and deals with customs and tax, which is a separate question from registration. In the UK, the CAA processes an application on form CA1 with proof of identity, evidence of insurance (or a declaration that the aircraft will not fly until it is supplied) and the foreign de-registration statement. An application can be made up to six months before delivery, and standard processing usually takes up to three working days, so the registration can be ready to complete as soon as ownership passes.

Import tax is where first-time buyers most often go wrong. The Isle of Man Aircraft Registry has stressed that a business aviation aircraft does not have to be imported to the Isle of Man for tax purposes in order to be registered there, and that tax importation and registration are two entirely different subjects. The registry does not advise on tax and recommends specialist advice. Where the jet will be based, where it is delivered and how it will be used all affect whether VAT or customs duty is due, so tax advisers should sign off the delivery location and import route before closing.

Insurance completes the step. Hull and liability cover must be in place from the moment risk passes, and a financier will want to be named on the policy. Insurance specialists can review exclusions, territorial limits and lender endorsements.

How to register an interest on the International Registry

Registration on the International Registry is done online by approved users, not by filing paper, and every registration requires the consent of the named parties. The process has four stages.

1. Become an approved entity. Each organisation or individual must first apply to become an Approved Administrator; Registry officials review each application, and once approved the Administrator can register interests and approve further users within the entity.
2. Choose the right user type. A transacting user entity can be a named party to a registration, such as a buyer, seller, debtor or creditor. A professional user entity, typically a law firm, is never a named party but makes registrations on behalf of the transacting entities that have authorised it.
3. Initiate and consent. One party initiates the registration of the contract of sale or international interest against the airframe and each engine, and the other named party consents electronically. The registration is complete only once the required consents have been given.
4. Search and certify. A priority search after registration produces a certificate confirming the new interest and its place in the order of priority.

The fees are modest compared with the value at stake. All are charged in US dollars.

International Registry item	Fee (USD)
Registration	120
Spare engine	60
Priority search	27
Priority search, machine-readable format	10
User set-up (one year)	240
Controlled entity set-up (one year)	215

Source: International Registry fee schedule. For a US-registered aircraft, filings pass through the FAA as authorising entry point before they reach the International Registry. Because Aviareto is based in Dublin, advisers in Ireland are often involved in registry questions that cut across several jurisdictions.

Common mistakes first-time private jet buyers make

Most problems in jet purchases come from sequencing and assumptions rather than from the aircraft itself. The recurring ones are:

• Choosing the register last. If the owning entity does not qualify for the intended register, the deal stalls at the point of registration. Check eligibility against the CAA, FAA or Isle of Man rules in Step 2.
• De-registering too early. The Isle of Man registry advises that aircraft should not be de-registered from their previous state until it has confirmed it can accept them, which avoids leaving the jet without a valid registration while the new register is still checking the file.
• Searching the airframe but not the engines. Engines are separate Cape Town objects and can carry their own registered interests.
• Treating registration as a tax decision. Registration and tax importation are separate subjects.
• A vague inspection clause. Without clear rules on who pays for which discrepancies, the inspection becomes a renegotiation.
• Ignoring insolvency risk. If the seller or a lessee is in financial difficulty, the order of registered interests and the insolvency regime decide who keeps the aircraft; cross-border cases such as those under Malaysia's new cross-border insolvency law show how recognition rules can shift outcomes.

Where an aviation lawyer takes over

A broker can find the aircraft and a technical consultant can inspect it, but structuring the owner, drafting the purchase agreement, running the registry searches and filings, and coordinating the closing are legal tasks. The value of getting them right is greatest in cross-border deals, where the buyer, seller, aircraft, lender and register can all be in different jurisdictions.

Aviation counsel also handles the after-sale issues that buyers rarely anticipate: operator agreements, crew employment, insurance claims and, occasionally, liability after an incident, an area in which the AF447 appeal verdict against Airbus and Air France showed how long aviation liability can run. To find a specialist for the jurisdiction where the jet will be owned or registered, browse Corporate INTL's aviation directory. Knowing how to buy a private jet is ultimately about knowing which adviser owns which step, and making sure no step is left unowned.

Frequently asked questions

How do you buy a private jet for the first time?

Settle the owning entity and the register first, then sign a letter of intent with a refundable deposit in escrow, search the national register and the International Registry, negotiate the purchase agreement, commission a pre-purchase inspection, arrange finance and compliance checks, and close through an escrow agent with registration filings made simultaneously.

Can a normal person buy a private jet?

Yes, but registers impose nationality rules. The FAA registers aircraft owned by US citizens, lawful permanent residents and qualifying US entities, while the UK CAA accepts British citizens, EEA nationals and EEA-formed undertakings including UK companies. Many private buyers hold the jet through a company or trust rather than personally.

How much is aircraft registration?

In the UK the CAA charges £98 for an aircraft up to 15,000kg and £196 above that, with extra fees for out-of-sequence marks and same-day processing. The FAA charges $5.00. An International Registry registration costs USD 120, plus USD 27 for each priority search.

How long does it take to register an aircraft?

The UK CAA says standard processing usually takes up to three working days, and same-day processing can be arranged for an additional fee using form SRG1750. Applications can be made up to six months before delivery, so the registration can be ready to complete as soon as ownership passes.

How do you transfer ownership of an aircraft?

Ownership passes by a bill of sale delivered at closing, usually through an escrow agent that releases funds simultaneously. For a US aircraft the seller signs FAA Form 8050-2 and the buyer files Form 8050-1. For qualifying aircraft, the contract of sale is also registered on the International Registry.

What is the International Registry of Mobile Assets?

It is the electronic registry created under the Cape Town Convention and Aircraft Protocol to record interests in airframes, aircraft engines and helicopters. Priority is decided on a first-to-file basis. Aviareto, based in Dublin, operates it as Registrar under ICAO's supervision as Supervisory Authority.

Does the Cape Town Convention apply to every private jet?

It applies to airframes certified to carry at least eight persons including crew or goods over 2,750kg, helicopters for at least five persons or over 450kg, jet engines of at least 1,750 lb thrust and other engines of at least 550 shaft horsepower. Most business jets qualify.

What is an IDERA?

An Irrevocable De-Registration and Export Request Authorisation is signed by the aircraft owner in favour of a lender and recorded with the national aviation authority. On default, the authorised party can ask the authority to de-register the aircraft and allow its export. In the UK the CAA must honour a properly submitted request.

Do I have to pay VAT to register a jet in the Isle of Man?

Not as a condition of registration. The Isle of Man Aircraft Registry says a business aviation aircraft does not have to be imported to the Isle of Man for tax purposes to be registered there, because tax importation and registration are separate subjects. Take specialist tax advice on the delivery location and import route.

Sources

1. UNIDROIT: Aircraft Protocol to the Cape Town Convention, States Parties
2. Aviareto: The International Registry
3. International Registry of Mobile Assets: FAQ and fee schedule
4. UK Civil Aviation Authority: How to register an aircraft
5. Federal Aviation Administration: Register an Aircraft
6. Federal Aviation Administration: Cape Town Treaty
7. The International Interests in Aircraft Equipment (Cape Town Convention) Regulations 2015 (SI 2015/912)
8. Isle of Man Aircraft Registry: Register an Aircraft
9. Isle of Man Aircraft Registry: Correcting a common misconception, tax, importation and aircraft registration (May 2023)
10. National Aircraft Finance Association: The Closing, the final step to completing the aircraft acquisition

About this article

This guide was researched and written by The Corporate INTL Newsroom, which covers cross-border legal, regulatory and business developments for lawyers, professional advisers and financiers in over 150 jurisdictions. It has been checked against the text of the UK Cape Town Convention Regulations 2015, guidance published by the UK Civil Aviation Authority, the Federal Aviation Administration, the Isle of Man Aircraft Registry and the International Registry, and UNIDROIT's status table for the Aircraft Protocol. Fees and eligibility rules change, so confirm current figures with the relevant authority before relying on them. This article is general information, not legal or tax advice; for advice on a specific transaction, consult a qualified adviser. Last reviewed 28 October 2026. For more analysis like this, visit the Corporate INTL newsroom or subscribe to Corporate INTL.