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 in which to raise capital.
Abu Dhabi Global Market (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. ADGM is 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.
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 rival jurisdictions, such as Ireland, Singapore, Hong Kong and Cayman Islands, and clear competitive advantages in Central Asia and Africa, as well as especially strong treaties with the burgeoning aviation markets of India and Indonesia.
ADGM registered companies further benefit from ADGM’s full English common law environment, 0% corporate tax exemption until 2063, no foreign ownership restrictions, no limits on repatriation of profits and no withholding taxes, as well as access to its independent courts and financial services regulator.
The aviation industry is one of the key economic sectors of Abu Dhabi and the UAE and continues to grow at a considerable rate. ADGM has been actively developing a community of businesses and professional services to serve the local and regional markets in the aviation finance and leasing sector.
Sovereign has extensive expertise and experience in this sector through our aviation division – RegisterAnAircraft (https://www.registeranaircraft.com) – and Sovereign Corporate Services is committed to support industry participants across the MENA region in conjunction with our ADGM SPV product.
To date, we have worked with aviation leasing companies, aviation investment funds, law and accountancy firms, advisory firms and asset managers to structure aircraft transactions and provide efficient financing and leasing arrangements within the robust framework of the ADGM. Please contact Sovereign Corporate Services for further information on how we can support your aviation-related activities.