A recent Inland Revenue Amendment includes measures that would increase the city’s attractiveness as a center for aircraft leasing
. This initiative would mark the Government’s intention to strengthen another business sector in Hong Kong, apart from the traditional financial and professional services sectors. Aircraft financing is, in this context, a good business proposition for investors in Hong Kong
, which the number of commercial aircraft to increase substantially over the next years.
Aircraft leasing incentives in Hong Kong
A recently published Amendment (No. 2) issued by the Inland Revenue Department highlights a series of measures for increasing Hong Kong’s attractiveness as a regional aircraft leasing center.
The Government turned its attention towards promoting the aircraft and aviation field because it presents important abilities for development and growth. Hong Kong already has a well-established business infrastructure and the development of this field would come as a natural step, especially with a predicted number of 6,000 new commercial aircraft predicted to be delivered to the Asian-Pacific region in the following years.
Other jurisdictions like Ireland or Singapore
have already taken steps for promoting this business field but with the new laws in place, Hong Kong could become the preferred option because it already has low withholding tax rates in this field.
Company registration in Hong Kong
for this business field observes the same guidelines for business registration. Licensing
in this particular business field is subject to additional requirements.
Offshore aircraft leasing in Hong Kong
The modification of the current tax law in Hong Kong
would bring significant advantages to aircraft lessors. Right now, the laws allow for the taxation of the entire rental income and it does now allow for deductions for aircraft depreciation. Hong Kong has good potential in this business field because it has a very competitive withholding tax rate for aircraft leases into China.