ADGM recognised as an attractive and tax efficient aircraft financing and leasing hub for the region
Source: ADGM , Author: Posted by BI-ME staff
Posted: Sat September 30, 2017 4:33 pm

UAE. The strength and role of Abu Dhabi Global Market (ADGM) as a strategic hub for aircraft financing and leasing has been endorsed and corroborated by PwC in the newly published Aviation Comparative Jurisdiction Report (the “Aviation Report”). 

ADGM, the International Financial Centre in Abu Dhabi, worked with PwC to analyse the wide and expanding Double Tax Treaty (DTT) network that ADGM companies conducting aircraft finance and leasing activities from ADGM would have access to.  

The extensive analysis compares the UAE DTT network and corporate tax positioning to the traditional global hubs for aviation finance, namely Ireland, Singapore, Hong Kong and Cayman Islands.

Based on the report, the UAE has an extensive network of tax treaties, with 83 in force and a further 32 in various stages of negotiation, signature or ratification.  The UAE has a wider network than the comparison jurisdictions and clear comparative advantages with particularly strong coverage in Central Asia and Africa as well as especially strong treaties with the burgeoning aviation markets of India and Indonesia.  

The commercial case for aircraft financing and leasing businesses to be based and established in Abu Dhabi Global Market is compelling. 

Mr Dhaher Bin Dhaher Al Mheiri, Chief Executive Officer of the Registration Authority, commented: “The Middle East has a vibrant aviation landscape with expanding airports and growing fleets to address global demand well into the next decade. The aviation industry is one of the key economic sectors of Abu Dhabi and the UAE. As an IFC, ADGM continues to actively support and facilitate the industry’s demand for efficient financing and leasing arrangements for our domestic airlines.

"International players can tap on ADGM’s proven platform as their launch pad into the region’s fast-growing economies and access the exciting business opportunities and growth.”

Middle East is Central to the World’s Fastest Growing Aviation Markets over the next 20 years
Over the next 20 years Asia, the Middle East and Africa are forecast to be the highest growth aviation markets, with Abu Dhabi centrally positioned to these markets.  The UAE is also noted to have impressive aviation credentials, with two of the world’s top airlines and a further two ambitious low-cost carriers. With aircraft debt and leasing funds emerging as an attractive and better-understood asset class, Abu Dhabi, with its abundance of wealth, also presents an attractive market to raise capital.

As an established broad-based IFC, ADGM is well prepared to support the aviation industry and aviation financing community in achieving their business strategies and growth plans for the Middle East and wider region. It has an attractive and robust ecosystem comprising world-class business infrastructure, comprehensive suite of corporate tools and direct access to global professional services, such as leading international law firms and accounting agencies that have anchored their offices at ADGM.

ADGM is an Innovative & Highly Attractive Jurisdiction for Structuring Global Transactions
In catering to the exacting needs of the aviation industry, ADGM has put in place a modern and responsive jurisdiction that continuously presents innovative solutions and financing structures for businesses to realise their plans.

International aviation finance businesses, including lessors, banks, advisory firms, recognise the strategic advantages of incorporating their regional presence in ADGM to be closer to their regional clients and business opportunities. With a highly competitive special purpose vehicle (SPV) regime, benchmarked against the world’s leading jurisdictions, ADGM also serves as an attractive domicile for the structuring of aircraft transactions (with the first aviation leasing transactions successfully concluded).

ADGM - Influencing & Transforming the Aviation Financing Industry in the Region
In addition to a wide and favourable DTT network, ADGM registered companies benefit from ADGM’s full English common law environment, zero-percent corporate tax exemption until 2063, no foreign ownership restrictions, no limits on repatriation of profits and no withholding taxes, as well as access to our independent courts and financial services regulator.   ADGM has been actively developing a thriving community of businesses and professional services to serve the local and regional markets in the aviation finance and leasing sector.

ADGM as the Regional Hub Aviation Financing & Leasing
ADGM is committed to becoming an aviation financing and leasing hub in this region. The PwC report aims to enable companies and investors to identify clear opportunities that can enhance the operational and tax efficiency of their businesses in the aviation finance industry.   The industry can continue to rely on ADGM’s established platform to expand its global presence as ADGM seeks to continue to engage and work closely with our community of firms to improve business conditions and access to opportunities. 

To share a more in-depth understanding of ADGM’s aviation platform and services, ADGM will be meeting international aviation leaders and industry players at the upcoming annual Aviation Economies Growth Frontier Industry Conferences in Dubai, Hong Kong and Dublin. 
The report is available on this link.

Photo Captions:
1. (above)  ADGM Authorities Building
2. (inset)  Al Bateen Executive Airport - for illustrative purposes only  (File photo)

About Abu Dhabi Global Market
Abu Dhabi Global Market (ADGM), an international financial centre located in the capital city of the United Arab Emirates, opened for business on 21st October 2015.

In line with the Abu Dhabi’s Economic Vision, ADGM is a natural extension of Abu Dhabi’s role as a reliable and responsible member of the global financial community. Strategically situated in Abu Dhabi, home to one of the world’s largest sovereign wealth funds, ADGM plays a pivotal role in positioning Abu Dhabi as a global centre for business and finance connecting the growing economies of the Middle East, Africa and South Asia.

ADGM’s three independent authorities, the Registration Authority, the Financial Services Regulatory Authority and ADGM Courts, enable registered companies to conduct business in a zero-percent tax environment and operate with confidence within an international regulatory framework with its own independent judicial system and legislative infrastructure based on the Common Law.

Established by a UAE Federal Decree as a broad based financial centre, ADGM’s foundation is anchored on three of Abu Dhabi’s strategic strengths - private banking, wealth management and asset management and will continually expand its financial services in response to the needs of its businesses and marketplace.

Abu Dhabi Global Market is located on Al Maryah Island, a 114-hectare development that is home to world-class business and lifestyle facilities such as the Rosewood and Four Seasons Hotels and Residences, the first ever specialty Cleveland Clinic Hospital outside of USA, luxury retail at the Galleria Mall, and grade-A offices spaces to meet Abu Dhabi’s long-term development and economic needs. All these complement ADGM’s international financial centre position as a vibrant destination in the capital city in Abu Dhabi.

For more details of ADGM, please visit www.adgm.com or follow us on Twitter : @adglobalmarket, @FinTechAD, #FinTechAD, and Linked : ADGM

 

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