Singapore-based lessor Avation has been approved for entry into the country's Aircraft Leasing Scheme (ALS), which offers tax incentives for aircraft lessors.
Avation says that under the scheme, aircraft and engine lessors with their corporate headquarters in Singapore qualify for a 10% income tax rate. It will also enjoy an automatic exemption on the withholding tax that applies to payments it receives for qualifying foreign loans on aircraft.
Avation executive chairman Jeff Chatfield says that the company entered the scheme on 17 April.
“This recognises the company’s standing in the aircraft leasing market in an increasingly important strategic region for leasing globally and may result in a lower withholding and administrative cost burden on debt structuring,” he says.
The ALS incentives, which are administered by Singapore’s Economic Development Board, have also assisted other lessors, such as Transportation Partners, to establish operations in the city-state.
The announcement comes after Avation completed a refinancing of $33 million in senior debt in April, which it ways will lower its interest costs by more than $1.6 million per year.
Avation has a fleet of 24 aircraft in its portfolio with a further 12 on order. Its clients include Virgin Australia, Thomas Cook Airlines and US Airways.