Reasons why the aviation industry is a flying success in Ireland
Ireland has over 50 years of experience in the aviation leasing and finance industry which is why it is now considered a global hub for the sector. It has seen growth of up to 20% since 2016 and this is predicted to rise into 2021 with the bulk of investment into Ireland coming from Europe the US and Asia.
The aviation industry is worth €4.1bn to the Irish economy along with the leasing sector pulling in €550m alone making it a significant contributor. Nine of the world’s top 10 lessors are also headquartered here with over 50 per cent of the world’s leased aircraft managed and owned in Ireland, providing employment for around 44,000 full-time workers with 5,000 of these from the leasing companies.
Last year alone saw over 76,000 flights handled by Ireland’s five main airports in the third quarter. Dublin accounted for 82.5% of all flights (63,032) while Cork handled 8.2% of all flights (6,274).
With some of our Glandore members attending the Air Finance Journal this week here in Dublin we decided to look at reasons why the aviation industry is such a success here.
Ireland is the second largest common law jurisdiction in Europe and as of 2017 is part of the Cape Town International Register for interests in aircraft which is now part of Irish law. The country is also home to Aviareto, managers of the International registry of mobile assets. This further supports Ireland’s commitment and interest to the aviation expansion and investment while also promoting its position as a global leader in aviation. The Cape Town Convention will help attract new investors into the country and it will ensure that Ireland remains a desirable location in the future. Danny McCoy, chief executive of Ibec, mentions that: “Ireland has developed a world-class capability in aircraft leasing over decades and is the recognised global leader in the industry.”
Ireland has a highly skilled and experienced workforce, which is a key factor in attracting foreign direct investment in any country and Ireland has done exceptionally well at this. More specifically, some 50 years of experience in the field of aviation and aviation finance has allowed the country to plan and invest in commercial, financial and technical skills while also tailoring and introducing relevant courses to meet the demand for these specific careers in Universities and colleges and has also introduced the first master’s in aviation finance in Europe. This has allowed us to stay attractive as a location while ensuring that companies locating to our shores will have access to exceptional graduates and highly skilled, experienced workers from solicitors, accountants, corporate service providers and tax advisors, allowing Ireland to remain competitive.
Ireland has now signed 74 double tax treaties with countries around the globe and the Irish trading tax at a rate of 12.5 percent for active members. Irish tax authorities encourage any business that creates employment and economic growth which is why they are so supportive of the leasing and aviation industry. Ireland has a double tax treaty network which facilitates efficient finance in the industry allowing lessors to claim their tax credits against Irish corporation tax for any undisclosed foreign withholding taxes.
Ireland’s Legal Framework
Ireland’s European Union membership strongly influences its legal system, with its common law system almost the same as that of the UK. This allows them to easily stay in line with other EU members when dealing with financial institutions and awarding bodies. The Irish legal system allows access to numerous options when facilitating finances and structuring transactions across several jurisdiction areas. Ireland is also seen as a hub of financial excellence around the world providing people with uncomplicated, user friendly regulatory framework and this ensures that all members of the aviation and aviation finance industry the ability transition with ease. This has helped support and promote investment here in Ireland.
At Glandore, we are proud to have been the first home to many of the worlds leading aviation companies in Ireland. We support the growth of companies and individuals by creating flexible options that allow their business to easily expand. If you would like to learn more about becoming a Glandore member in our flexible office space, get in touch here.