Aviation Finance And Leasing Guide 2021

1 General and Contractual

1.1 What are the typical structures available for financing the purchase of an aircraft?

The most common corporate structure used for financing the purchase of an aircraft involves the incorporation of a special-purpose vehicle ("SPV") to hold title to the aircraft being financed. Popular jurisdictions for incorporations of these SPVs include the Cayman Islands and Ireland, with the British Virgin Islands ("BVI") attracting more industry players recently given the flexibility of BVI business companies and the jurisdiction's long-standing popularity (and use) in Asia. Further, recent amendments to the BVI Business Companies Act (the "BVI Act") have expanded the use of segregated portfolio companies ("SPCs") beyond licensed insurers and professional, private or public funds. SPCs can now engage in management of aircraft, providing additional structuring options for the aviation industry.