- Authors – Associate Partner Sebastian Okinczyc and Associate Gabija Breiterytė
- Published in Terralex Learning Communities
Late last year the Parliament of Lithuania adopted a substantial amendment to the local Law on Aviation, removing a long-standing regulatory requirement that had placed Lithuania at a competitive disadvantage in the international aviation market. The reform modernises the national legal framework governing civil aircraft transactions and brings Lithuanian aviation regulation into closer alignment with prevailing international standards and best practices.
Key Regulatory Changes
Under the amended legal framework, civilian aircrafts subject to mandatory registration in the Lithuanian Civil Aircraft Register are expressly classified as movable property rather than being equated to immovable property.
Consequently, effective 1 January 2026, transactions involving the sale, transfer, lease, or financing of registered civil aircraft will no longer require notarial certification.
Background and Context
Prior to the adoption of these amendments, Lithuanian law treated civil aircraft analogously to immovable property, primarily on the basis of their high economic value. As a result, transactions involving ownership transfer, leasing, or financing of aircraft were subject to mandatory notarial certification.
This atypical regulatory approach imposed considerable administrative and financial burdens on market participants, frequently complicating cross-border transactions.
The reform responds to long-standing concerns raised by aviation stakeholders, as well as legal practitioners. It also complements Lithuania’s ratification of the Cape Town Convention on International Interests in Mobile Equipment, which entered into force in Lithuania on 1 December 2025.
The Convention strengthens ownership and creditor rights protection, enhancing the appeal of the Lithuanian aircraft register to management companies, lessors, and financial institutions.
Practical Impact for Aviation Stakeholders
The amended framework delivers several immediate benefits for aviation market participants:
- Elimination of notarisation requirements: Contracts no longer require notarial certification, removing a procedural layer that frequently cost several thousand euros for high-value transactions.
- Reduction of transaction costs: Lower legal and administrative expenses improve Lithuania’s cost competitiveness as a jurisdiction for aircraft registration and operation
- Accelerated execution: Transactions can proceed more efficiently without notarisation coordination, particularly in multi-jurisdiction deals.
- Regulatory alignment and consistency: The reform aligns the legal treatment of aircraft with that of maritime vessels under Lithuanian law and reflects international aviation practice, where aircrafts are generally recognised as movable property.
- Enhanced international competitiveness: By removing a structural disadvantage that previously discouraged foreign investors and operators, the amendment materially strengthens Lithuania’s position relative to more business-friendly aviation jurisdictions.
Economic Implications
The reform is expected to generate positive economic effects by incentivising aircraft operators with Lithuanian capital to register their fleets domestically. This consideration is particularly relevant for major Lithuanian aviation groups such as Avia Solutions Group, GetJet, and Heston Airlines, which collectively operate approximately 300 aircraft. Had the previous regulatory regime remained in force, Lithuania faced an elevated risk of capital outflows and lost investment opportunities, as aviation companies continued to favour jurisdictions offering more efficient transactional frameworks. Increased aircraft registration activity in Lithuania is also anticipated to generate additional public revenue and to reinforce the domestic aviation ecosystem.
Industry Reception
The aviation industry has broadly welcomed the reform as a necessary and long-overdue correction of a regulatory anomaly. Aviation companies, industry associations, and legal professionals have consistently emphasised that the notarisation requirement imposed disproportionate costs, caused operational delays, and undermined Lithuania’s competitiveness.
The former practice of equating aircraft with immovable property solely on the basis of their economic value lacked persuasive legal and economic justification, particularly given that vessels of comparable or greater value were already classified as movable property. The reform restores regulatory coherence and parity across transportation sectors.
Broader Strategic Context
The amendment complements Lithuania’s implementation of the Cape Town Convention and Aircraft Protocol, substantially modernising the legal framework for aircraft transactions. Combined with the Convention’s internationally recognised security interest regime, these reforms position Lithuania competitively alongside established European aviation hubs.
Conclusion
The amendment to the Law on Aviation represents a decisive and strategically important step in modernising Lithuania’s aviation regulatory environment. By reclassifying civil aircraft as movable property and eliminating mandatory notarisation requirements, Lithuania has addressed a long-standing structural impediment to market competitiveness.
Together with the Cape Town Convention, the reform enhances legal certainty, reduces costs, and aligns Lithuanian law with international standards, supporting sustainable growth in the national aviation sector and reinforcing Lithuania’s position in the global aviation market.
