IFSCA issues framework for Aircraft Lease

On May 18, 2022, the International Financial Services Centres Authority has specified the Framework for Aircraft lease  for entities to get registered under Finance Company Regulations as a Finance Company or a Finance Unit for undertaking aircraft lease transactions.

Key points:

  • Applicability: all applicants desirous of seeking registration for one or more of the permissible activities.
  • Application for Registration: An applicant desirous of undertaking permissible activities as a Lessor shall submit
    an application form in the format specified in Annexure along with the application fees as specified in this Framework.

  • Permissible Activities: A Lessor shall be permitted to undertake all or any of the following activities:
    1. Operating lease for an aircraft lease arrangement including sale and lease back, purchase, novation, transfer, assignment, and such other similar transactions in relation to aircraft lease;
    2. Operating lease for an aircraft ground support equipment;
    3. Asset Management Support Services for assets owned or leased out by the entity or by its wholly owned subsidiary (ies) set up in IFSCs in India.
  • Capital Requirement: A minimum owned fund of USD 200,000 or its equivalent in freely convertible foreign currency, is to be maintained at all times by the entity.

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