LITHUANIA Law and Practice Contributed by: Gintautas Šulija and Eduard Plešak, Šulija & Partners
2.4.2 Effects of Leasing on the Residence of a Foreign Lessor A foreign lessor will not be deemed to be resident or domiciled in Lithuania just because it is leasing a commercial aircraft to a Lithuanian entity or because such aircraft is registered in Lithuania. 2.4.3 Engine Maintenance and Operations Please refer to 2.4.1 Tax Requirements for a Foreign Lessor for details. 2.4.4 Damage or Loss Caused by an Asset Owners, lessors, financiers or others with no opera - tional interest in an aircraft would not be held strictly liable (ie, liable without fault) or vicariously liable (ie, liable without fault for another party’s obligations) for damages caused when an aircraft was operated by a third party. An owner, however, might be required to prove that it did not have operational control. 2.4.5 Attachment by Creditors The Law on Aviation 2000 provides that an aircraft can be prohibited from leaving a Lithuanian airport if, among other things, airport charges or air navigation fees are not discharged in respect of that aircraft or if it fails to comply with safety requirements. 2.4.6 Priority of Third Parties’ Rights If an aircraft is subject to a mortgage, the mortgagee has a priority claim over other creditors of the lessee. See also 2.4.5 Attachment by Creditors . 2.5 Insurance and Reinsurance 2.5.1 Requirement to Engage Domestic Insurance Companies It is not mandatory in Lithuania that either all or part of the insurances be placed with domestic insurance companies, provided that insurance is placed with insurance companies of European Economic Area countries. Other insurance companies from third countries require permission from the Bank of Lithu - ania. 2.5.2 Mandatory Insurance Coverage Requirements As a member of the EU, Lithuania is bound by the requirements of Regulation (EC) No 785/2004 and applies the minimum insurance requirements provided
document is not required) must be submitted to the civil aviation authority for aircraft registration purpos - es. Failure to provide the lease may result in the civil aviation authority refusing to register the operator of the aircraft. The leases are not subject to any consent from any government entity. However, the civil aviation authority typically checks the aircraft’s maintenance, insurance, and other non-commercial clauses to ensure that the aircraft is properly maintained and safely operated. 2.3.5 Requirements for a Lease to Be Valid and Registrable There are no specific requirements for a lease to be valid or accepted by the civil aviation authority as evi - dence of the link between the owner and the opera - tor. However, the lease should clearly state that the right of possession over the aircraft is transferred to the operator. This should be evidenced either by the respective clauses in the lease or by a separate acceptance act between the lessor and lessee. 2.3.6 Taxes/Duties Payable for Registering a Lease Lease agreements are not registrable in Lithuania. 2.3.7 Registration of Aircraft in Alternative Countries Aircraft that are based in Lithuania are primarily reg - istered in Lithuania. Some aircraft are registered in Malta or Poland and based in Lithuania. 2.3.8 Requirements for Documents Concerning Registration As a matter of practice, the civil aviation authority requires copies of all documents to be presented ‒ although, in the case of a bill of sale, either the original document or its notarised and apostilled copy must be submitted to the civil aviation authority. Upon con - firming the authenticity of the copies of the originals, the originals are immediately returned to the applicant. 2.4 Lessor’s Liabilities 2.4.1 Tax Requirements for a Foreign Lessor A foreign lessor will not be taxed in Lithuania just because it is leasing a commercial aircraft to a Lithu - anian entity or because such aircraft is registered in Lithuania.
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