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Moderator: David Brotherton, Berwin Leighton Paisner Justin Sun, Berwin Leighton Paisner

Doing business in the Tianjin Free Trade Zone – Opportunities and challenges for foreign lessors and financiers. Moderator: David Brotherton, Berwin Leighton Paisner Justin Sun, Berwin Leighton Paisner Li Hu, DFTP Johnny Lau, ICBC Leasing.

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Moderator: David Brotherton, Berwin Leighton Paisner Justin Sun, Berwin Leighton Paisner

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  1. Doing business in the Tianjin Free Trade Zone –Opportunities and challenges for foreign lessors and financiers Moderator: David Brotherton, Berwin Leighton Paisner Justin Sun, Berwin Leighton Paisner Li Hu, DFTP Johnny Lau, ICBC Leasing

  2. Doing business in the Tianjin Free Trade Zone  - opportunities and challenges for foreign lessors and financiers David Brotherton, Partner Berwin Leighton Paisner LLPJustin Sun, Partner Berwin Leighton Paisner LLP 3 November 2015

  3. Agenda • In Context: PRC Aviation market and the Tianjin Free Trade Port • Our Panel • International Lessor Survey Feedback/Panel Topics

  4. Short overview of PRC/ DFTP • PRC Aviation Market: estimated that over 6300 new Aircraft will to PRC Airlines by 2034, representing 17 per cent of the world total demand. • Tianjin Donjiang Free Trade Port (DFTP): • formed to encourage establishment of a financing and leasing industry; • 242 aircraft leasing SPCs/ 476 aircraft leased via DFTP as of March of 2015. • Increasing demand: requests by PRC airlines under leasing and novation agreements to lease via an onshore structure are increasingly regular • Potential for greater access to PRC airlines for non-PRC lessors

  5. Progress to date • Used by a number of PRC lessors • Airline led structures • Non-PRC Lessor/Onshore structures? Offshore Lessor / owner Head lease Considerations: Recourse Structural Risk Onshore airline owned Tianjin SPC Op lease Airline

  6. Our Panel • Mr Li Zhen, International Shipping and Finance Promotion Center of DFTP,  Project supervisor of Dongjiang Aviation Department • Mr Vicente Alva Pons, Managing Director, Aviation Finance, DVB Bank SE Singapore Branch • Mr John Fulton, Head of Tax at HKAC • Ms Yao Zhou, Partner / Attorney at Law, Run Ming Law Office • Mr Johnny Lau, CEO, Astro Aircraft Leasing

  7. Lessor Survey Feedback • Topics to consider • Drivers for Tianjin Structures • Movement of Monies and Profits • Onshore Aircraft Ownership • Consideration for financiers • SPC incorporation and fiduciary duties

  8. Drivers for Tianjin SPC structures • “Would establishing and onshore presence in DFTP increase opportunities for you to win business from PRC Airlines?” Strongly disagree Strongly agree Agree Neutral Disagree 82% 12% 6%

  9. Repatriation of income and capital • “Have you already established an onshore presence in the DFTP?” No (88%) Yes (12%)

  10. Drivers for Tianjin SPC structures • “Are you or would you consider establishing and onshore presence in the DFTP” Strongly disagree Strongly agree Agree Neutral Disagree 59% 12% 29%

  11. Repatriation of income and capital • Does “Movement of monies and profit offshore” impact you decision as to whether to set up in the DFTP”? Strongly disagree Strongly agree Agree Neutral Disagree 94% 6%

  12. Onshore aircraft ownership considerations • Does “onshore ownership of aircraft in the PRC” impact you decision as to whether to set up in the DFTP”? Strongly disagree Strongly agree Agree Neutral Disagree 65% 6% 29%

  13. Considerations for financing Tianjin SPC Structures • Does “your ability to raise finance for onshore structures” impact you decision as to whether to set up in the DFTP”? [stat] Strongly agree Agree Neutral Disagree Strongly disagree 59% 6% 35%

  14. SPC incorporation and regulatory issues • Does “regulations relating to incorporation in DFTP such as regulatory requirements, onshore directorship and fiduciary requirements” impact you decision as to whether to set up in the DFTP”? Strongly agree Agree Neutral Disagree Strongly disagree 12% 6% 82%

  15. Conclusions • We will publish a lessor survey and also a summary of today’s discussion which will be made available to the delegates. • Thank you.

  16. Doing business in the Tianjin Free Trade Zone  - opportunities and challenges for foreign lessors and financiers David Brotherton, Partner Berwin Leighton Paisner LLPJustin Sun, Partner Berwin Leighton Paisner LLP This document provides a general summary only and is not intended to be comprehensive. Specific legal advice should always be sought in relation to the particular facts of a given situation. 385683

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