Guernsey SPVs As Useful Structuring Tools In Aviation Transactions

Introduction

Special purpose companies or vehicles ("SPVs") are commonly used by owners, lessors and financiers as structuring tools for the ownership, leasing and financing of aircraft in cross-border aviation transactions. SPVs are frequently used as simple asset-holding vehicles, separating the owner or lessor from the asset, as off-balance sheet or orphan vehicles, or in more sophisticated financing and leasing transactions.

Guernsey is a politically stable and well-regulated jurisdiction with a mature financial services sector. This, together with its flexible corporate regime, tax neutral environment and creditor friendly laws including the Cape Town Convention, makes it an attractive jurisdiction for the incorporation of aircraft-owning SPVs for simple or sophisticated structuring.