Managing Director Ronan Reilly looks at why the aviation world has turned to his country for aircraft finance and leasing for almost half a century.

Since the creation of Guinness Peat Aviation (GPA) in the 1970's Ireland has been a global hub for aviation finance and leasing. More than half of the word's leased aircraft are leased from Ireland and nine of the top ten aircraft leasing companies are based in Ireland. These include Avalon, Aercap, Gecas, Aircastle, SMBC and AWAS.

More recently helicopter leasing companies have chosen to set up in Ireland including Milestone Aviation (bought by GECAS), Lobo Leasing and Waypoint Leasing.

The primary reason for Ireland being one of the most popular jurisdictions for aircraft leasing is its favourable tax regime. The features include a growing number of double taxation treaties, zero withholding tax on lease rentals, a low rate of corporation tax and certain exemptions from dividend withholding tax on the extraction of profits. Also, the changes enacted in the Finance Bill 2011 which allow actual aircraft and engines to be classed as qualifying assets under the "section 110" regime, has further strengthened Ireland's position as a favoured jurisdiction from which to own and lease aircraft using a leasing platform.

Another reason for the rise of Ireland as an aircraft leasing destination is the ministerial order in 2014, implementation of which is to be in 2015, which permits the Cape Town Convention Alternative A insolvency remedy to be enforced in Ireland. This should ease the way for increased activity in aircraft structured finance transactions, including Irish enhanced Equipment Trust Certificates ("EETC") issuance.

The Irish Aviation Authority ("IAA") has a reputation as a world-class registration authority and only allows aircraft on the Irish register where those aircraft and the lessee airlines have complied with its stringent standards. Their requirement for proper maintenance of aircraft ensures that the aircraft retain a good marketable value, which is a key factor aircraft lessors consider in choosing where to register their aircraft. As a result of the IAA's insistence on an Irish technical service provider, a body of skilled and experienced technical service providers exists in Ireland.

There are also experts (like those at TMF Group) providing management, corporate secretarial, accounting and tax compliance services to Special Purpose Vehicles ("SPVs") that are incorporated in Ireland and in over 80 other jurisdictions. Clients can benefit from using one reliable service provider in multiple countries with one single point of contact to ensure the same high-quality service delivery. For example, clients frequently use TMF in Norway for leasing into Japan and / or TMF Group in France for leasing to Indonesia.

The growth of the aircraft leasing market has meant that a wide body of experts exist in the technical, legal, tax, audit, recruitment, MRO, insurance and corporate services area. All of this combined expertise makes Ireland a jurisdiction of choice for aircraft leasing.

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