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:
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- 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;
- Operating lease for an aircraft ground support equipment;
- 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.