Evolving Tax Havens: A Competitive Success Index for Small Jurisdictions in Business Aviation Finance

Abstract

Small jurisdictions — microstates and autonomous territories — play a disproportionate role in the global business aviation finance market, managing billions of dollars in high-value, mobile assets through specialized registries. However, little empirical research has systematically examined why some jurisdictions consistently outperform others. This study introduces a Competitive Success Index (CSI) to measure and compare the structural competitiveness of seven leading aircraft registries in small jurisdictions. The CSI operationalizes thirteen success factors across three categories: legality and regulatory quality, tax regime and fiscal policy, service quality and operational efficiency. Category weights are calibrated using Ordinary Least Squares (OLS) regression on net aircraft registration growth from 2019 to 2024, controlling for exposure to international sanctions. Legality and regulatory quality emerged as the dominant predictors of competitiveness, far outweighing fiscal incentives or operational factors. This challenges the common assumption that tax policy is the primary driver of registration decisions. Instead, creditor protection, regulatory predictability, and governance credibility appear to play a more decisive role in contemporary transactions. While the CSI demonstrates limited correlation with short-term registration growth, the findings highlight an important distinction between institutional competitiveness and cyclical market behavior, particularly during periods of geopolitical disruption. Given the study’s small sample (n=7), these findings should be treated as preliminary. The CSI offers a scalable, quantitative tool to assist policymakers, registry authorities, and industry stakeholders in navigating the allocation of billions of dollars in aviation assets.