Author: Alex Izinyon II, Partner, Alex Izinyon & Co

Transferring title and documentary requirements  

The title to an aircraft may be transferred by any written agreement or contract between the parties. The Nigerian Civil Aviation Authority (NCAA) also recognises a bill of sale as a legal method for transferring title.

Transfer of title should be effected through a written document. Where title is transferred, the document transferring title may then be filed with the NCAA. If the transfer is to an individual or company that resides outside Nigeria and the aircraft is to be exported, a deregistration request may also be filed with the document effecting the transfer of title. 

Where the transfer is made to an individual or company that resides in Nigeria, the NCAA will issue a new certificate of registration to the new owner. In order for the transfer document to be accepted by the NCAA, it must be duly stamped, with payment of stamp duty. The transfer document need not be notarised; however, if the transfer document is in a foreign language other than English, it must be professionally translated into English and submitted to the Nigerian embassy for legalisation and authentication.

process for transferring title

Where title is transferred to a lessee in Nigeria, the aircraft may be registered by a lessee that meets the requirements under Part 4.2.1.2 of the Nigeria Civil Aviation Regulations and a certificate of registration shall be issued by the NCAA.

Where title to an aircraft registered in Nigeria is transferred by any written document, bill of sale or contract, the certificate of registration of the aircraft becomes void and the appropriate section of the certificate of registration must be endorsed and returned to the NCAA together with all transfer documents. The process of transferring title in an aircraft depends on whether the transferee intends to keep the aircraft registered in Nigeria or wishes to export it to a different country. If the transfer of title is made to a citizen of Nigeria or a company registered in Nigeria with the intention of keeping the aircraft registered in Nigeria, the holder of the certificate of registration must endorse the relevant sections on the reverse side of the certificate of registration, notifying the NCAA that there has been a change in ownership or operator. A new certificate of registration will be issued upon completion of the registration process by the new owner.

Where title is transferred to a foreign individual or company that chooses to keep the aircraft registered in Nigeria, the transferee must comply with Part 4.2.1.2 of the Nigeria Civil Aviation Regulations. This provides that where the foreign person or entity has leased the aircraft to a Nigerian citizen:

• the aircraft may remain on the Nigerian registry only for as long as the lease remains in effect; and 
• the certificate of registration must include: 
• the names and addresses of the lessee and, if different, the operator of the aircraft; 
• confirmation that the aircraft is not registered under the laws of any other state; and 
• confirmation that the aircraft is not more than 22 years old, unless the aircraft is used exclusively for general aviation purposes.

Where the transferor chooses to export the aircraft to another country, the holder of a certificate of registration or owner or lessor, or its duly authorised attorney, may apply in writing for deregistration of the aircraft from the Nigerian register for export to the state of registration.  

charges, fees or taxes levied on the transfer of title

Where there is a transfer of title to an aircraft which is registered in Nigeria, fees are payable to the NCAA for registration of the aircraft with the NCAA, upon submission of the application for registration. Registration includes registration of ownership. 

Under the NCAA fee schedule, the prescribed fee for the issuance of a certificate of registration is based on the maximum certified take-off mass of the aircraft to be registered. The charges are as follows:

• Under 3,000 kilograms (kg): NGN 10,000.
• Between 3,000kg and 6,000kg: NGN 20,000.
• Between 6,000kg and 15,000kg: NGN 30,000.
• Between 15,000kg and 50,000kg: NGN 50,000.
• 50,000kg and above: NGN 100,000.

An additional charge of NGN 500,000 is payable on request for a special registration mark which is out of sequence.

With regard to taxes levied on the transfer of title, this depends on whether any of the parties are resident in Nigeria and the structure of the transaction. Where the transferor is a foreign entity, it may be taxed on income which is derived from its Nigerian operation under the Companies Income Tax Act (CITA). Section 13(2) of CITA specifies the circumstances in which income is deemed to have been derived from the Nigerian operation of a non-resident company. These include where:  

• the company has a fixed base in Nigeria and derives income through that fixed base; 
• the company has a dependable agent in Nigeria;
• the trade or business involves a single contract (turnkey projects); or 
• the trade or business is between the foreign company and a related person in Nigeria. 

No income taxes may be levied on non-resident companies such as a transferor without a fixed base in Nigeria.

Ownership of the aircraft and expropriation, confiscation.

Apart from insolvency laws, there are no specific laws under which the registered holder may be forced to relinquish ownership of an aircraft. Section 44 of the Constitution of the Federal Republic of Nigeria 1999 (as amended) provides that: 

no moveable property or any interest in an immovable property shall be taken possession of compulsorily and no right over or interest in any such property shall be acquired compulsorily in any part of Nigeria except in the manner and for the purposes prescribed by a law that, among other things: requires the prompt payment of compensation therefore and gives to any person claiming such compensation a right of access for the determination of his interest in the property; and the amount of compensation to a court of law or tribunal or body having jurisdiction in that part of Nigeria.

However, this provision does not affect payments: 

• due under any general laws on the imposition or enforcement of taxes, rates and duties;
• relating to leases, tenancies, mortgages, charges, bills of sale or any other rights or obligations arising out of contracts; or
• due under bankruptcy laws.  

If the owner of the aircraft is a company that has enjoyed bailouts or funding from the federal government which may have become non-performing loans, the federal government – through the Asset Management Corporation of Nigeria (AMCON), under the AMCON Act – may convert the nonperforming loans in the company into shares in the company. If the owner of the company has benefited from government loans or bailouts, the aircraft may be confiscated.