Aviation Finance And Leasing In Ireland

Author:Mr Conor Keaveny and Sean Murray
Profession:Dillon Eustace
 
FREE EXCERPT

Ireland has long been regarded as a leading jurisdiction for aviation finance and leasing. The development of the aviation sector in Ireland can be traced back to the 1970s when the late Dr. Tony Ryan founded Guinness Peat Aviation (GPA) in Shannon, County Clare. Notwithstanding its failed flotation in the early 1990s, GPA played a pivotal role in forging Ireland's reputation as a key - and arguably the pre-eminent - centre of activity in the global aviation finance industry. While other jurisdictions, most notably Malta, Singapore and the Cayman Islands in recent years, have put forward cases to challenge its status, Ireland has continued to improve its offering in a concerted effort, not just to retain its existing businesses, but to compete effectively in the global marketplace.

Ireland's accomplishment is evidenced by the roster of leading industry players who have chosen to operate out of Ireland, including GE Capital Aviation Services (GECAS), Sumitomo Mitsui Banking Corporation (SMBC), International Lease Finance Corporation (ILFC), Ansett Worldwide Aviation Services (AWAS), Avolon, Industrial and Commercial Bank of China Ltd. (ICBC), CIT and Orix. In all, nine of the world's ten largest aircraft leasing companies are located in Ireland and recent figures put the number of aircraft managed in Ireland at 3,500 or 50% of the entire global fleet of leased aircraft. The number of people employed in the industry is estimated at over two thousand (direct and indirect) - many, if not most of them in highly skilled and well paid jobs - and the sector contributes over EUR300 million in corporation tax to the Irish exchequer annually.

So what has contributed to Ireland's phenomenal success and how do jurisdictions such as Malta, Singapore and the Cayman Islands compare? The factors involved are numerous (and in some instances, are shared with other jurisdictions) but include a stable and sophisticated legal system, an "onshore" jurisdiction and a very favourable taxation regime, together with other attractive features, such as membership of the European Union (EU) and the Organisation for Economic Co-operation and Development, a favourable geographic location, and the fact it is an Englishspeaking jurisdiction with a well-educated workforce boasting many years of experience in the industry.

Legal and regulatory framework

The legal and regulatory framework which exists in Ireland affords the requisite degree of stability, sophistication and user friendliness which, allows aviation industry participants to establish, operate and raise capital with relative ease.

The Irish legal system

Ireland's common law legal system is similar to that of the United Kingdom. However, as a result of its EU membership, Ireland's legal regime is also strongly influenced by EU law. This ensures certain aspects, particularly those involving financial services, are in line with those of other EU member states.

Ireland's legal system allows for numerous options in terms of structuring transactions and facilitating financing across multiple jurisdictions.

Both Irish lawyers and the Irish courts are familiar with the concept of foreign law governed agreements and such agreements will, in most cases, be recognised and enforced by Irish courts. Court judgments and arbitral awards obtained overseas will, again in most cases, be recognised and enforced in Ireland.

Ireland's position as a financial centre of excellence ensures that legal professionals, be they lawyers advising on particular transactions/issues or members of the judiciary adjudicating on disputes involving financing arrangements, have the requisite expertise to deal with complex structures, including those involving cross-border elements and the particular challenges they present.

Clearly however, these factors are not necessarily unique to Ireland. Similarities are discernible, for instance, in the legal and regulatory systems of Malta, Singapore and the Cayman Islands. All three jurisdictions have sophisticated common law based legal systems and Malta is also an EU member state.

Location

Ireland can boast its European credentials but at the same time market its location as bridging the divide between the USA and Europe. Once again, however, Ireland does not necessarily enjoy a monopoly in this regard. The Cayman Islands can also present itself as an ideal neutral jurisdiction in circumstances where transactions involve an international dimension and Cayman Islands law is frequently selected as the governing law for agreements in international transactions. Similarly, both Malta and Singapore claim their locations offer unique advantages...

To continue reading

REQUEST YOUR TRIAL