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Airfinance Journal

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  • DFTP and Hong Kong – Identify an efficient jurisdiction for aircraft leasing
    DFTP and Hong Kong – Identify an efficient jurisdiction for aircraft leasing
    Tejaswi Nimmagadda, King & Wood Mallesons | John Timpany, KPMG | Liu Yi, Rui Bai Law Firm | Kevin Butler, TMF Group Recorded: Nov 6 2018 63 mins
    The past decade has been a golden age for China’s aircraft leasing industry. FlightGlobal research shows that today Chinese capital accounts for over 28% of the total capital deployed by aircraft lessors. Eight China-based leasing companies are listed on the Airfinance Journal Leasing Top 50, which ranks lessors by fleet value.

    Choosing the right geographical location for aircraft leasing structures plays an essential in lessors’ strategic planning. While Ireland remains the number one jurisdiction for structuring aircraft transactions, other jurisdictions have been introducing new regimes to attract aircraft leasing business. Examples in Greater China include the Dongjiang Free Trade Port (DFTP) and the Hong Kong SAR Government.

    Founded in 2009, the DFTP has adopted preferential policies to allow DFTP-based lessors to enjoy tax rebates, lease payments in foreign currency and more efficient cross-border operations. As of June 2018, the DFTP has completed the delivery of 1,200 aircraft worth over RMB 450 billion, according to DFTP data. Meanwhile, Hong Kong is quickly catching up.

    In June 2017, Hong Kong’s legislature passed a tax reform bill lowering the effective tax rate for aircraft lessors to 1.65%. Within six month of the reform, ICBC Financial Leasing had launched its Hong Kong leasing platform and successfully closed a transaction under the new tax regime.

    This one-hour webinar will bring together industry experts to examine how lessors can take advantage of the benefits of the DFTP and Hong Kong.

    Key discussion points include:
    - How important is tax in choosing a location for an aircraft leasing platform?
    - What differentiates the DFTP model from other FTZs in China?
    - How the aircraft leasing industry went about the Hong Kong tax regime and what lies ahead?
    - How can DFTP and Hong Kong complement to create greater value to the industry?

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