Hong Kong launches the Aircraft Leasing and Aviation Finance Association

Eleanor Steed
By Eleanor Steed November 2, 2017 10:00

Hong Kong launches the Aircraft Leasing and Aviation Finance Association

At the Shangri-La hotel last night in Hong Kong, the Hong Kong Aircraft Leasing and Aviation Finance Association was officially launched at an inaugural ceremony officiated by the Hon Mrs Carrie Lam Cheng Yuet-ngor, the Chief Executive of Hong Kong Special Administrative Region. Ms JinPing, Deputy Director of the Department of Economic Affairs, Liaison Office of the Central People’s Government in the Hong Kong Special Administrative Region and Mr Joseph Lai, Permanent Secretary for Transport and Housing (Transport) also joined as Guests of Honour.

“I am a staunch believer in the Hong Kong’s unique advantages with conviction to the rule of law and the commitment to provide a level playing field.” The Hon Mrs Carrie Lam Cheng Yuet-ngor, The Chief Executive of the Hong Kong Special Administrative Region said, “Policy and tax incentives aside, the Government cannot act alone to build up our aircraft leasing and financing sector. This is why I am very pleased to witness the inauguration of the Hong Kong Aircraft Leasing and Aviation Finance Association tonight, which helps put Hong Kong in the global market of aircraft leasing and its related business.”

Chen Shuang,JP,Chairman of Hong Kong Aircraft Leasing and Aviation Finance Association, said, “Hong Kong has long been defined by its free trading spirit and an outstanding and well-established legal system, putting it in a unique position to become an aviation and financial centrein Asia Pacific and in the world at large. This provides a fertile soil for the development of the aircraft leasing industry, and we are delighted that our proposal about having a dedicated tax regimeto develop Hong Kong intoan aviation and finance centre wasrecognized by the Hong Kong Government andpassed at the LegislativeCouncil recently. This is a highly visionary and pragmatic first move towards transforming Hong Kong into a competitive player in the global aircraft financing arena.”

Mr Stanley HuiHon Chung, JP, President of Hong Kong Aircraft Leasing and Aviation Finance Association, also commented, “The development of aircraft leasing and financing will help create jobs and enormous economic values in Hong Kong. With the Central People’s Governmentactively spearheading the Belt and Road Initiative, it is expected that Hong Kong’s aviation sector will play a significant role in it, and our aircraft leasing and financing industry will have a key part to play in the process as well. With these strengths, Hong Kong will continue its unique role as the ‘super-connector’, to build stronger economic and cultural ties with the rest of the world and facilitate trade with every continent.”

The Inland Revenue (Amendment) (No.2) Bill 2017 was passed at the Legislative Council on 28 June 2017, creating a concessionary tax regime which reduces the profits tax liability of qualifying aircraft lessors and aircraft leasing managers. The profits tax rate for qualifying aircraft lessors and aircraft leasing managers is set at 8.25%, which is half of the standard profits tax rate; and the taxable amount of lease payments derived by qualifying aircraft lessors from qualifying aircraftleasing activity is equal to 20% of the gross lease paymentsless deductible expenses, but excluding tax depreciation.

According to “Recommendations for Developing Hong Kong as an Aircraft Leasing and Financing Hub” issued by Hong Kong Financial Services Development Council, with the introduction of the new tax regime, the market share of Hong Kong in the global aircraft leasing business will reach 18% in 20 years, bringing an estimated HK$700 billion aircraft value for  financing. About 1,700 direct jobsand over 13,700 indirect jobswill be created in the Hong Kong job market. The profits tax generatedwill exceed HK$10 billion, and over HK$430 billion will be added to the GDP of Hong Kong

The Association was established in June 2017 with the mission of promoting the development of Hong Kong’s aircraft leasing and aviation finance industry. The following companies are the current members: Air Lease Corporation, Asia Pacific Aviation Leasing Group, Astro Aircraft Leasing, Aviation Capital Group (ACG), Avolon, Bank of Communications, Hong Kong Branch, Berwin Leighton Paisner, Century City International, CK Asset Holdings, China Aircraft Leasing Group (CALC), China Development Bank Financial Leasing, CMB Financial Leasing, Dewey Yee, GE Capital Aviation Services (GECAS), Haitong UT Capital Group, Investec Aviation Finance, King & Wood Mallesons, Novus Aviation Capital, NWS Holdings, Orix Aviation, PricewaterhouseCoppers and Standard Chartered Bank.

 

Eleanor Steed
By Eleanor Steed November 2, 2017 10:00