By Francois McManus, Client Relationship Director, Ireland
The Republic of Ireland has been a global hub for aircraft leasing and aviation finance since the 1970s. Today, its role as a worldwide leader in the sector is undisputed; an Irish-leased aircraft takes off every two seconds, representing a more than 60% share of the global leasing market.
Home to leading industry players such as AerCap, Avolon, and GECAS, Ireland boasts a robust ecosystem that attracts lessors, investment managers and operators from around the world.
With its favourable tax environment, strong legal framework and unparalleled industry expertise, Ireland has become the jurisdiction of choice for global aviation financing.
In this article, we’ll explore what makes Ireland so compelling for aircraft leasing and aviation finance. We’ll also cover the best ways to capture its advantages.
Why Ireland has emerged as a global aviation hub
- Favourable tax regime: Ireland’s tax regime is one of the most competitive in the world. In addition to a low corporate tax rate, Ireland also offers specialised tax incentives tailored to the aviation sector, including exemptions on specific income streams and capital gains related to aircraft leasing
- Strong legal framework: Ireland’s transparent legal system provides strong protections for creditors, granting them increased predictability and reliability. The Cape Town Convention, which provides protections for lessors, has been fully implemented into Irish Law. The Irish Aviation Authority (IAA) also ensures efficient aircraft registration and compliance, reducing administrative friction
- Access to global markets: As a member of the European Union, Ireland serves as a gateway to European markets while maintaining strong ties to North America and Asia. Its strategic location ensures seamless access for managing global fleets, an attractive benefit for multinational lessors
- Unparalleled expertise: Ireland’s financial services landscape is deeply integrated with the aviation industry. Financial institutions, law firms and other Irish service providers have decades of experience navigating the complexities of aviation finance, providing lessors with access to world-class resources and advice.
The strategic advantage of Irish SPVs
Special purpose vehicles (SPVs) are an essential tool in aviation finance, serving as standalone legal entities to streamline aircraft ownership, isolate risk and enhance efficiency.
SPVs retain sole ownership of aircraft assets and lease them to operators through operating or finance leases, helping lessors protect their portfolios from individual asset risk and keeping debt off the balance sheet for borrowers. SPVs also help centralise lease management, maintenance and insurance.
Ireland’s aviation-friendly ecosystem simplifies the process of creating and managing SPVs, providing efficient regulation and a tax regime that amplifies their benefits by offering extensive double taxation treaties and capital allowances.
Over 25% of Irish SPVs are attributed to the aviation finance industry, with a 23% increase in total incorporations of aircraft leasing SPVs from 2023 to 2024. Coupled with strong interest from emerging markets, industry forecasts predict that Ireland is in a prime position to support incoming projects in 2025 and beyond.
Conclusion
As global demand for aviation continues to grow, Ireland’s position as the leading hub for aircraft leasing is expected to solidify. Emerging markets like India are driving increased demand for aircraft, generating new opportunities for Ireland-based SPVs and other aircraft leasing structures.
For lessors, investment managers or family offices seeking to establish SPVs for aircraft leasing, Ireland offers unparalleled tax efficiency, legal security and technical expertise. By partnering with IQ-EQ, our clients navigate the complexities of aviation finance with confidence, efficiency and compliance in one of the world’s most sophisticated aviation hubs.
As a leading global provider of aviation finance services, IQ-EQ offers a suite of solutions to help you establish and manage holding structures, including SPVs. Get expert guidance on all aspects of aviation investment, including aircraft financing, LILO, operating and ABS transactions.
