Navigating the unexpected
This paper is a summary of 2017 Annual PwC Asset and Wealth Management Conference
Aircraft leasing and financing
With the steady and rapid development of China’s economy, air traffic has experienced strong and positive growth. It is foreseeable that this growth will continue and create significant opportunities in all sectors of the aviation industry. Are you capturing these opportunities?
Leveraging China’s strength in the aviation financing and leasing industry
Globally, about a third of aircraft are now financed through leasing and China alone is forecast to need 6,000 new planes over the next 20 years (read more). China economy is likely to play an important part in this growth as the country is taking proactive steps by introducing new taxation regimes to support and facilitate development of the aviation and financial industries. We expect more aircraft financiers to emerge from the Chinese market to capture this potentially lucrative business.
Tax advisor to ICBC Financial Leasing, Operating Lease Award of the Year 2017 at Airfinance Journal’s Inaugural China Award
Aircraft Lessor, JOLCO Finance Deal of the Year in Global Transport Finance Gala Awards 2016.
Delivering an all–inclusive solution throughout your aviation financing and leasing projects
Accounting advisory
The new accounting standard has an impact on lessees and lessors in its financial statements, key financial indictors, business models and pricing strategies. Leasing companies will have to re-evaluate the efficacy of its operational and legal structure.
Our accounting advisory team as extensive experience with the aviation leasing and financing clients in dealing with a diverse array of projects from restructuring, public listing, acquisitions and reforms.
Risk management consulting
Aircraft leasing companies face a range of challenges and risks, including:
- compliance requirements by foreign regulatory bodies
- country and credit risk
- diverse source and terms in financing to reduce interest rate and exchange rate risk
- impairment of aircraft requires risk management and monitoring of financial accounts
- aircraft residual value and asset portfolio management
Our specialised consulting team has built and optimised risk management systems for leading and financing companies in China, such as pre-leasing scan of risks, analysis of stock assets. In addition, we actively cooperate with national organisations such as China Finance 40 Forum, China Leasing 30 Forum and local leasing associations.
Tax
Aircraft leasing arrangements are usually complex in nature and can involve multiple jurisdictions. Anti-avoidance is also becoming a major challenge for the aircraft leasing industry.
Our team is specialised in handling tax engagements for the aircraft leasing industry. We maintain close contact with the relevant government authorities and act as the communicator for market participants. The team has conducted tax planning and leasing structure projects for numerous sizeable aircraft leasing companies.
Legal
The new accounting standard poses new challenges to aircraft leasing arrangements and transaction structures. Relevant parties would have to assess the accounting, taxation and legal risks.
Our legal team*, Rui Bai Law Firm, works closely with Chinese and foreign lenders, lessors and Chinese airlines on matters relating to aircraft, engines and other equipment, including sale and purchase, financing, leasing and dispute resolution. In the past, the team has been involved in various types of transactions such as JOLCO, US EXIM backed financing of Boeing aircraft, US tax leasing, ECA supported financing of Airbus aircraft, Export Development Canada (EDC) financed Bombardier aircraft, BNDES financed Embraer 190 aircraft, Chinese lessors’ cross-border leases and more.
*Legal service is provided by Rui Bai Law Firm, an independent law firm and a member of the PwC global network of firms
Spotlight and insights
Hong Kong Aircraft Leasing and Aviation Finance Association inauguration ceremony
PwC at the forefront to foster industry collaboration
2017 Commercial aviation trends - Digitise and reassess your competitive position
The need to digitise operations.
HKSAR Government’s responses to key issues raised by deputations for Aircraft Leasing and Financing
Financial Services Tax News Flash
The Hong Kong SAR Government has proposed to introduce Committee Stage Amendments to extend the concessionary tax regime to onshore aircraft leasing activities
Financial Services Tax News Flash
Bill on the concessionary tax regime for aircraft leasing considered by the Legislative Council
Financial Services Tax News Flash
Hong Kong ready for the buoyant aircraft leasing market with the new tax regime
Hong Kong Tax News Flash, Issue 4
The proposed dedicated tax regime for aircraft leasing business in Hong Kong
Financial Services Tax News Flash
Contact us
Catherine Tsang
Partner
Tel: +[86] (755) 8261 8383
Email
Clarence Leung
Partner, Asset Finance and Leasing, PwC China
Tel: +[852] 2289 3599
Email
Yvonne Kam
Accounting Consulting Services Lead Partner, PwC China
Tel: +[86] (21) 2323 3267
Email
Charles Chow
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