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Aviation Services


We are now in an unprecedented age for aircraft financing and deliveries. According to Airbus, the current global fleet of aircraft will double in the next 20 years and with the United Nations predicting that the world’s population is expected to reach almost 10 billion by 2050, the aviation industry looks like it is in a good position for continued growth.

Asia is the biggest global buyer of aircraft, with China alone accounting for 36 per cent of the Asian aviation market, requiring an estimated 3,200 aircraft in service by 2026  according to data from Crucial Perspective. The level of finance required by owners and operators for deliveries of new aircraft will require an estimated average of US$125 billion of finance annually over the coming decade. Boeing's Current Aircraft Finance Market Outlook 2017 report says new aircraft funding requirements are tipped to jump from US$122 billion in 2016 to US$126 billion in 2017,  either via debt or leasing finance.

Hong Kong is set to become one of the leading centers in the world for aviation transactions and CMS Aviation is dedicated to providing guidance, support and our professional expertise to new and existing Hong Kong-based aviation transactions.  We offer customised services to aircraft manufacturers, lessors, operators, investors and financial institutions.

If you are structuring an aviation transaction in Hong Kong, CMS Aviation can assist you in its execution.


CMS AVIATION SERVICES is a local provider of Aircraft Ownership Solutions specialising in Aircraft Purchase, Aircraft Registration, Management & Administration, Tax-Efficient Aircraft Ownership Structuring, Importation / Exportation and a full range of Aircraft Consultancy Services.

As the specialist aviation division of CMS (Corporate Management Services Limited) - a global leader in the provision of business and corporate services – CMS Aviation is well positioned to help aircraft owners realise the tax and operational benefits of establishing their aircraft leasing operations in Hong Kong.

We are your "one-stop shop" for all your aviation consultancy requirements. Our aim is to maximise the opportunity for you by utilising our knowledge and experience in both technical and commercial aspects of the aerospace industry. You have the reassurance of our ability to deliver services in a timely professional manner.

CMS is the appointed Corporate Services Provider to Ernst Young Accountants.

Mr Raymond Choi is the Founder and Managing Director of CMS. He was born and educated in the UK and is a native English/Chinese speaker. CMS clients will benefit from over 20 years experience and expertise in the corporate structuring, business re-engineering and financial services industry.

Our Services:

Company incorporation, domicile and management services:

We can advise on the best structure for your transaction and provide local lawyers and tax advisors with the appropriate aviation experience to ensure timely completion.

Having determined the best structure for your aviation transaction, CMS deals with all management and administrative matters in Hong Kong and our personnel can act as directors, company secretary or trustees as appropriate. Specifically we provide:


  • - Provision of a registered office and maintenance of the relevant registers;
  • - Organisation of meetings of the Directors and/or shareholders in Hong Kong;
  • - Provision of facilities for such meetings and documentation and maintenance of the minutes of the proceedings;
  • - Dealing with correspondence relating to the company’s business;
  • - Liaising with Hong Kong auditors, lawyers and tax advisers;
  • - Managing client company bank accounts, where required, in accordance with terms approved by our client;
  • - Company secretarial services.

Directorship Services

It is critical with respect to any aviation transaction that the management team have the expertise and experience to manage the business. For Hong Kong tax residency purposes, it is also vital to demonstrate that central management and control is being exercised in Hong Kong.

Through the management team at CMS and our established network of partners and associates, we are able to provide suitable and appropriately experienced directors to support Hong Kong aviation companies.

Bookkeeping & Taxation Services

Bookkeeping Services

  • - Preparation and maintenance of all client books of account and records as required for auditing and meeting legislative requirements;
  • - Assistance in any accounting analysis  that may be required by clients to meet transactional or regulatory requirements;
  • - Assistance in providing required information to the client’s auditor.

Taxation Services

  • - Registration of companies with the Hong Kong tax authorities;
  • - Co-ordination of requests for taxation advice;
  • - Liaising with tax advisers in relation to specific requests;
  • - Facilitating client company tax advisers in the submission of corporation tax returns and payroll tax returns.


The management and staff at CMS have depth of knowledge and experience in the industry. We provide our services to aircraft manufacturers, lessors, operators, investment funds and financial institutions and are proud that many of our clients are referrals from established clients.

Our multi-jurisdictional experience allows to us to advise clients on important considerations such as Country of Residence of Seller, Country of Residence of Buyer, Location of Aircraft and Country of Lessee.

CMS provides incorporation and management services in over 20 jurisdictions, specialising in Hong Kong, Cayman Islands, British Virgin Islands (BVI), Seychelles, Isle of Man, Delaware and other tax-free countries.

We remain one of the few consulting companies who are completely independent from any financial institution and able to offer Company Formation and Management services, Facilitate Work Visa applications, locate suitable Office and Residential premises,  and therefore able to offer unbiased and totally independent solutions providing Value without Compromise.

With our local presence and international vision, we are able to bridge the cultural and business gaps that often hinder business success in Asia. Our team of highly experienced, multi-lingual and multi-disciplined professional staff are able to provide superior services, innovative solutions and technical support in relation to company formation and maintenance, while fully understanding your personal requirements.

We provide clients with the highest quality service offering professionalism, confidentiality, reliability and integrity in all aspects of our services. Our team of professionals are dedicated in ensuring that your needs are fully understood while providing you with unrivalled service and expertise - our compliance standards are amongst the best in the industry.

Our personal approach ensures continuity and achieves solutions that are tailored to our client's requirements and expectations. Our commitment to client service ensures that our team members deliver these solutions efficiently and cost effectively. Our management experience and local knowledge allow easy transfer of businesses from different jurisdictions to Hong Kong.


On 1st November 2017, the HK Government held an inaugural ceremony marking a new milestone in the development of Hong Kong as an aviation international financial centre.. The Inland Revenue has created a concessionary tax regime which reduces the profits tax liability of qualifying aircraft lessors and aircraft leasing managers as follows:

(i) A reduced profits tax rate for qualifying aircraft lessors and aircraft leasing managers is set at 8.25%, which is half of the standard profits tax rate

(ii) The taxable amount of lease payments derived by qualifying aircraft lessors from qualifying aircraft leasing activity is equal to 20% of the gross lease payments less deductible expenses, but excluding tax depreciation.

Effectively, the profits tax payable on the assessable profits of a qualifying aircraft lessor is reduced to 1.65% of its net profit (ignoring depreciation).

The tax concessions will apply to profits derived on or after 1 April 2017.

According to “Recommendations for Developing Hong Kong as an Aircraft Leasing and Financing Hub” issued by Hong Kong Financial Services Development Council, with the introduction of the new tax regime, the market share of Hong Kong in the global aircraft leasing business will reach 18% in 20 years, bringing an estimated HK$700 billion aircraft value for financing. About 1,700 direct jobs and over 13,700 indirect jobs will be created in the Hong Kong job market. The profits tax generated will exceed HK$10 billion, and over HK$430 billion will be added to the GDP of Hong Kong.

Hong Kong being geographically close to the huge mainland China market it has many advantages when it comes to developing a leasing business, including a strong banking and financial services infrastructure, a mature, common law based legal system and a long track record in transportation services.


The Hong Kong Government has recognised the financial opportunity that the territory has in entering into the aircraft leasing space, particularly in light of the emerging Mainland China aviation market. These new tax concessions are expected to change the landscape for Hong Kong in positioning itself as a major leasing hub amongst other competitors such as Ireland and Singapore.

Both Ireland and Singapore have long established reputations as aircraft leasing hubs due to their favourable tax regimes. However, with the introduction of this new regime, Hong Kong could potentially present a more appealing option for aircraft lessors.

Hong Kong has historically disallowed aircraft lessors from claiming deductions for tax depreciation on aircraft leased to offshore aircraft operators. To compensate for this shortcoming, the tax policy deems 20% of the leasing income to be assessable income (effectively offering a "quasi depreciation deduction" equal to 80% of the assessable profits).

While both Ireland and Singapore also permit their aircraft lessors to claim depreciation deductions (albeit at different rates), the overall depreciation deduction that may be claimed is capped at the cost of the aircraft. The new Hong Kong regime, on the other hand, permits a deduction to be claimed each year at 80% of the net assessable profits. This means that an aircraft lessor of a long term lease may be able to obtain a higher overall level of deduction (which will lower the overall taxes on operating profits) in Hong Kong as opposed to Singapore and Ireland.

A blanket profits tax exemption has been introduced in Hong Kong for any capital gain derived from the sale of an aircraft where the aircraft has been used to carry out qualifying aircraft leasing activities for a continuous period of no less than 3 years immediately before the disposition. An equivalent exemption does not exist in Singapore or Ireland.

Hong Kong does not impose sales tax or VAT on aircraft leasing payments, resulting in an overall simpler tax system than Ireland and Singapore.

For aircraft lessors looking to target the Mainland China aircraft leasing market, the Double Tax Agreement between Hong Kong and Mainland China also offers a more favourable withholding tax rate of 5% (compared to 6% offered under double tax agreements that Singapore and Ireland have with Mainland China).

The combination of these and other factors will substantially increase the appeal of setting up in Hong Kong to aircraft lessors given the potential tax savings.


The tax concession assumes that a qualifying lessor or manager must be a standalone corporation set up solely for the purpose of carrying out qualifying aircraft leasing or management activities that are managed from Hong Kong.

Certain qualifying conditions must be satisfied before an aircraft lessor or manager can become eligible for the tax concessions, such as:-.

1. It is a key condition that the lessor or manager must have its central management and control in Hong Kong. This requires that the entity's executive officers and senior management personnel who exercise day-to-day decision making powers are based predominantly in Hong Kong. This also means that a foreign corporation looking to take advantage of this regime cannot operate through a Hong Kong branch - a company must be able to demonstrate sufficient “Substance” in Hong Kong.

2. The entity must not carry on management activities or any aircraft leasing from a permanent establishment outside Hong Kong. Permanent establishment for this purpose includes a branch, centre of management or any other place of business as well as any agent who has and habitually exercises a general authority to negotiate and execute contracts on behalf of the entity.

3. An aircraft lessor must not carry on any activities other than aircraft leasing activities (finance lease arrangements are generally not permitted - specific rules are provided to determine whether a lease is a qualifying lease for this purpose). In respect of an aircraft leasing manager, the manager must ensure that at least 75% of its profits must arise from, and 75% of its assets are deployed for, the aircraft leasing management business.

4. The regime is an elective regime. An aircraft lessor or manager who wishes to opt into the regime must make a written election with the Inland Revenue. Any such election is irrevocable. If a lessor or manager fails to satisfy any one of the conditions for any reason, it will be deprived of the ability to opt back into the concessionary regime. This is an anti-avoidance feature included to deter corporations from jumping in and out of the regime at will. Aircraft lessors and managers should take note that no grace period is permitted, which means a Hong Kong based corporate aircraft lessor or manager will become subject to Hong Kong profits tax on all of its worldwide income at the full corporate tax rate if, at any time, it inadvertently fails to meet any one of the conditions for any reason.


As a rule, the more central management and business activities take place in Hong Kong by the local company, the stronger a claim for having sufficient tax substance.  
The place of management and control of a company is usually one of the critical factors in determining tax residency. Therefore, a HK Company, although incorporated in Hong Kong, but managed and controlled from out a foreign tax jurisdiction, is likely to be regarded as a tax resident in that foreign tax jurisdiction whereby it then will also be exposed to foreign corporate income tax.

An aircraft lessor can lease to a Hong Kong aircraft operator (e.g. a Hong Kong based airline) provided that it has elected to come within the tax concession. In exchange, the aircraft lessor would not be permitted to claim tax depreciation that would otherwise be permitted.

To deter Hong Kong aircraft operators from abusing the regime by entering into an intergroup aircraft leasing arrangement with a connected person, a new rule has also been introduced to reduce the amount of deduction that the Hong Kong aircraft operator can claim with respect of any payment made to a connected aircraft lessor to effectively eliminate any tax benefit gained from any such intergroup leasing arrangement.

It is vital for HK Company to keep sufficient tax substance in Hong Kong with a view to mitigate its foreign tax exposures as well as obtain the Certificate from the HK-IRD smoothly and successfully for the purpose of tax treaty benefits. One should note that further to implementation of automatic exchange of information in the near future, tax information will be more and more transparent among tax authorities of various jurisdictions.

CMS has extensive knowledge in obtaining Hong Kong Tax Residence Certificates in order to assist clients to qualify for DTA (Double Taxation Treaties).

For information and assistance regarding this opportunity, please Contact US