You did everything right. Your drone company obtained its FAA Part 107 remote pilot certificates, registered the aircraft, maybe even secured a waiver or two. Then you scheduled a demonstration flight for a major U.S. customer—or booked a booth at a U.S. trade show—and someone asked a question nobody on your team could answer: “Do you have your DOT economic authority?”
And no, FAA registration or a FAA waiver does NOT give you DOT economic authority.
If your U.S.-registered aircraft is “owned, controlled or operated by persons who are not citizens or permanent residents of the United States[,]” then you have a foreign aircraft and Part 375 applies. It is called 14 CFR Part 375, “Navigation of Foreign Civil Aircraft Within the United States,” and it is administered not by the FAA but by the Office of the Secretary of Transportation. Most drone companies have never heard of it.
Two Regulators, Not One
U.S. aviation law splits authority between two agencies. The FAA governs safety. The Department of Transportation’s Office of the Secretary governs economics: who is allowed to conduct commercial air operations in the United States in the first place. Congress gave DOT this gatekeeping power over foreign aircraft in 49 U.S.C. § 41703, and DOT implemented it through Part 375.
Here is the part that surprises people: satisfying the FAA does nothing to satisfy DOT. They are separate authorizations from separate agencies with separate legal standards. A foreign-owned operator can be fully compliant with Part 107 and still be flying illegally under Part 375. In fact, § 375.22 makes FAA compliance an additional requirement on top of DOT authority—not a substitute for it.
The Definition That Captures More Companies Than You Think
Part 375 applies to “foreign civil aircraft.” You might assume that means aircraft on a foreign registry. It does—but that is only half the definition. Under § 375.1, a foreign civil aircraft is:
(a) an aircraft of foreign registry that is not part of the armed forces of a foreign nation, or
(b) a U.S.-registered aircraft owned, controlled or operated by persons who are not citizens or permanent residents of the United States.
Read paragraph (b) again. Your drone can be registered with the FAA, carrying a perfectly valid U.S. registration number, and still be a “foreign civil aircraft” under this rule—because the test looks through the aircraft to the people who own, control, or operate it. And “citizen of the United States” is itself a term of art: for corporations, 49 U.S.C. § 40102(a)(15) imposes requirements on the citizenship of the president, the board, and the ownership of voting interests. Setting up a Delaware LLC does not automatically make your operation a U.S. citizen. Foreign parent company? Foreign investors holding significant voting equity? A foreign national effectively directing operations? Any of these can flip your “American” drone company into a foreign civil aircraft operator without anyone realizing it.
And if you were hoping drones fall through the cracks: they do not. DOT amended Part 375 in December 2015 (80 FR 78648) specifically to address unmanned aircraft, and § 375.11 now expressly covers “unmanned aircraft as defined in § 1.1 of this title.”
What You Cannot Do Without a Permit
Part 375 draws its hardest line around “commercial air operations.” The definition in § 375.1 should make every drone operator sit up straight: it includes flights for the purpose of “crop dusting, pest control, pipeline patrol, mapping, surveying, banner towing, skywriting, or similar agricultural and industrial operations performed in the United States, and any operations for remuneration or hire.”
Mapping. Surveying. Pipeline patrol. Agricultural operations. That is the core commercial drone services market, listed by name in a regulation written decades before the drone industry existed. Under § 375.25 and § 375.40, a foreign civil aircraft may not conduct these operations unless a foreign aircraft permit issued by the Department is carried on board the aircraft. Not applied for—issued and carried.
The Good News for Manufacturers and Some Operators
Now for the part of Part 375 that foreign drone manufacturers should tape to their wall—because buried in Subpart D is a set of operations that are authorized by the regulation itself, without a permit, if you stay inside the lines.
Demonstration flights. § 375.31 authorizes flights of foreign civil aircraft within the United States “for the purpose of demonstration of the aircraft or any component thereof (including demonstrations at airshows), provided no persons, cargo or mail are carried for remuneration or hire.” For a manufacturer, this is the provision that makes U.S. market entry possible: flying your aircraft for a prospective customer, exhibiting at a trade show, demonstrating a new sensor payload—these can be lawful without ever filing for a permit. You are allowed by regulation. You don’t need to be allowed by permit.
Crew and buyer training. § 375.34 authorizes operating foreign civil aircraft in the United States “for the purpose of giving indoctrination training in the operation of the aircraft concerned to a buyer or a buyer’s employees or designees.” Sold a fleet to a U.S. utility or public safety agency? You can train their crews on the aircraft here by regulation provided it is not “for the purpose of flight instruction for remuneration or hire.”
Non-commercial operations generally. § 375.30 says “Foreign civil aircraft that are not engaged in commercial air operations into, out of, or within the United States may be operated in the United States and may carry non-revenue traffic to, from or between points in the United States.”
Where the Openings Close—Fast
Every one of those authorizations has edges, and the edges are sharp:
A demonstration flight is only a demonstration flight while nothing is being carried for remuneration or hire. The moment the “demo” starts producing deliverables someone is paying for—survey data, inspection imagery, mapping products—you have a strong argument it has become a commercial air operation requiring a permit. The line between “demonstrating the aircraft’s mapping capability” and “doing paid mapping” can be a single invoice.
Training is only protected when it is indoctrination training given to a buyer or the buyer’s employees or designees. Section 375.34 expressly does not authorize “flight instruction for remuneration or hire.” Charge separately for a training course, or train someone who has not actually bought the aircraft, and you are outside the safe harbor entirely.
And whether you are inside § 375.30’s non-commercial allowance at all depends on the “commercial air operations” analysis—which turns on facts, contracts, and money flows, not on what you call the flight in your marketing materials.
Where the regulation-based authorizations run out, the answer is a foreign aircraft permit. Applications go to DOT’s Foreign Air Carrier Licensing Division on OST Form 4509, generally at least 15 days before operations begin, under § 375.43. The form looks short. Do not be fooled. The application requires, among other things, a proper citizenship analysis of the applicant and owner, a complete and accurately framed description of the proposed operations, and a statement addressing whether your home country extends reciprocity to U.S. operators—because under § 375.44, DOT weighs reciprocity and the public interest in deciding whether you get a permit at all. Operations that fit no category can seek special authorization under § 375.70. How you characterize your operation across these categories is a legal judgment call, and getting it wrong can sink the application or, worse, get you authority for the wrong thing.
Remember also what a permit is: a privilege, not a right. Under § 375.19, any authority under Part 375 “may be withheld, revoked, amended, modified, restricted, suspended, withdrawn, or canceled by the Department in the interest of the public of the United States, without notice or hearing.”
Because of such, doing business completely under a 375 permit can be a very dangerous play to operate.
What Happens If You Ignore This
Under § 375.60, operating a foreign civil aircraft in the United States in violation of Part 375 is a violation of 49 U.S.C. Subtitle VII, exposing the responsible persons to civil penalties under 49 U.S.C. § 46301—currently up to $75,000 per violation under DOT’s inflation-adjusted penalty schedule—plus suspension or revocation of permits and certificates. Certain unauthorized air transportation can even carry criminal penalties under 49 U.S.C. § 46316. And the government penalties may not even be the worst of it: an operation conducted without required authority invites questions about insurance coverage, contract enforceability, and eligibility for future DOT and FAA authorizations.
Why This Is Not a DIY Project
Part 375 questions are rarely answerable from the text alone. Whether your company is a “citizen of the United States,” whether your planned flights are “commercial air operations” or fit within the demonstration and training authorizations, whether your activity crosses into “air transportation” (which Part 375 does not authorize at all—see § 375.2), whether your home country’s reciprocity posture supports a grant—each is a fact-specific legal analysis with real money and real penalty exposure riding on it. The categories interact with foreign air carrier permits, exemptions, FAA operating rules, and, for some countries, trade-agreement frameworks for specialty air services.
If any of the scenarios in this article sound like your company—you are foreign-owned, foreign-controlled, planning U.S. demonstrations, customer training, or commercial drone services—the time to deal with Part 375 is before your aircraft flies, not after DOT or the FAA comes asking.
FAQS
What if I get an American to fly it? If it is still OWNED by an foreign entity, then 375 applies.
What if I sell it to my American buddy and he owns it? I can then fly it! Ha! I found a loophole! Nope. It may be American owned but if it is controlled or operated by a foreigner, 375 applies.
Talk to Me Before You Fly
I help foreign drone manufacturers and operators determine whether Part 375 captures them, and prepare foreign aircraft permit applications that are done right the first time. Contact me here to discuss your situation confidentially.
And in case you are wondering, yes, I have helped companies obtain 375 permits successfully.
This article is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Regulations and penalty amounts change; consult an attorney about your specific circumstances.
Aviation Attorney. FAA Certificated Commercial Pilot and Flight Instructor (CFI/CFII). Contributor at Forbes.com for Aerospace and Defense.