Hong Kong chief executive CY Leung has opened the ISTAT Asia conference setting out the advantages of the city to the global aircraft leasing sector.
In a speech, he says that the aviation industry contributes around 3% of Hong Kong's GDP, but it is "keen to diversify and add value...which is why we are now targeting the aircraft leasing business."
Leung touched on the package of incentives for aircraft lessors that is presently before Hong Kong's legislative council, which will potentially deliver a series of tax concessions to lessors that base themselves in the country.
He also talked of the Special Administrative Region's 'one country, two systems' policy with China, which "gives us an edge in Asia's aircraft leasing business".
"As China's most cosmopolitan city, Hong Kong is both China's international finance centre, and the world's China financial centre," he says.
In December 2015, changes to the double-taxation treaty with China saw withholding taxes for aircraft leases reduced to 5%, which is lower than the taxes with Singapore and Ireland.
Leung also points out that Hong Kong's status as a financial centre gives it a deep pool of capital that is available for lessors to tap. That includes Islamic financing, bank credit and strong demand from institutional investors for both debt and equity investments.
"These, and more, create a conducive environment for aircraft leasing," he adds, pointing out that China Aircraft Leasing Group, CDB Leasing and BOC Aviation have chosen to list on Hong Kong's stock exchange.
"We expect more to join the ranks from the mainland and from all over the world," Leung says.
Source: Cirium Dashboard
