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First Aircraft Finance Lease To Use Shanghai FTZ's Tax Benefits

by Mary Swire, LawAndTax-News.com, Hong Kong

04 November 2013


Bank of Communications Finance Leasing Co. Ltd. (BOCOM Leasing), a wholly-owned subsidiary of China's Bank of Communications Co. Ltd., has announced that it has completed the first aircraft finance leasing transaction in the newly-established Shanghai free trade zone (FTZ).

BOCOM Leasing, which is also, to date, the first leasing company within the FTZ, disclosed that it had leased a Boeing-737 aircraft to the Yangtze River Express cargo airline, part of the Hainan Airlines Group. The leasing company has also indicated that it has signed a preliminary agreement for operational leases over two Boeing-777 aircraft with Air China.

The pilot FTZ, the setting up of which has the objective of upgrading China's economy through the liberalization of its services and trade over the next few years, has been established around Shanghai's existing comprehensive bonded zones at Waigaoqiao, Yangshan and Pudong Airport.

Given the port and airport location of the FTZ, its liberalization policies include the abolition of the capital requirements for single aircraft or single vessel company subsidiaries set up by financial leasing companies, which also benefit from preferential tax rates on the import of planes with a net weight of above 25 tonnes.

TAGS: Finance | tax | business | tax incentives | aviation | financial services | China | trade | free trade zone | services | Communications

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