7 December 2016 - Abu Dhabi Global Market (ADGM), the international financial centre in Abu Dhabi, is pleased to confirm the application of the Cape Town Convention and Aircraft Protocol 2001 in its regulatory framework to support its ambition to be an aviation financing and asset management hub in the UAE and the MENA region. The new set of regulations further augments ADGM’s strengths as an international jurisdiction for aviation financing and global financial services.
The ADGM Board of directors has enacted the Insolvency (Amendment No. 2) Regulations 2016 to incorporate a new Part 12 to its insolvency framework confirming the application of the Cape Town Convention, entered into and ratified by the UAE in 2008, in the ADGM. These regulations set in place a framework that will promote and facilitate the acquisition, use and financing of aircraft and aircraft equipment by providing greater legal certainty in an insolvency situation and, in turn, may reduce the costs of raising finance for aircraft equipment.
As international financial centre, ADGM has already put in place key infrastructure and legislative systems to support the aviation industry. These include its Common law system that offers market players legal certainty through flexible corporate structures, a recovery-focused insolvency regime and a tax system that has a number of tax efficiencies including the UAE’s extensive Double Taxation Treaty network. This framework is well-supported by the ADGM Courts with its highly experienced team of senior judges from the world's leading common law jurisdictions.
The civil aviation sector is one of the largest industry sectors in UAE and Abu Dhabi, and continues to expand. This growth is driven by the Middle East’s position as an air hub with airports increasing their handling capacity and airlines, such as Etihad, growing their fleet to meet increased global demand. This growth, in turn, fuels significant demand for aviation finance.
His Excellency Ahmed Al Sayegh, Chairman of ADGM, said: “We are pleased to support the industry by establishing a dynamic framework that caters to the aviation industry in the UAE and the region. The ADGM team will continue to closely engage local and international stakeholders, including airlines, manufacturers, financiers and legal practitioners, to understand and address their business needs on a timely basis. We aim to provide an efficient platform for businesses to access the appropriate financing and services to support their strategic developments and growth today and well into the future.”