Irish Treaty Funds: structuring for aircraft finance

Ireland is an established leading centre for structuring investment funds and asset-backed securitisation vehicles, thanks to its reputation for robust financial regulation and integrated position within the EU and global markets.

One of the most effective tools used in cross-border transactions, particularly in asset-backed securitisation (ABS), and securitisation markets, is the Irish Section 110 special purpose vehicle (SPV). Supported by Irish funds, these structures offer flexibility and tax efficiency, facilitating international investment while navigating complex tax, regulatory and commercial landscapes.

With careful structuring and robust legal support, Irish funds are a useful solution for cross-border investment and debt structuring for aviation finance. Whether structuring aircraft assets or syndicating investment across multiple jurisdictions, expert guidance and diligent structuring are vital.

This article explores the core considerations, fund structuring options and compliance requirements for structuring for aviation funds and examines how the mature structured finance and investment fund industry in Ireland can support the financing of aircraft globally. Ogier’s Investment Funds and Structured Finance teams, provide an overview of key legal, regulatory and practical services provided to sponsors and asset managers engaging in these transactions.

Aircraft leasing in Ireland

Ireland has been a global hub for aircraft leasing and aviation finance since 1975. Today, its role as a worldwide leader in the sector is undisputed. An Irish-leased aircraft takes off every two seconds, representing more than 60% of the global leasing market.

Home to leading industry players such as AerCap, Avolon and SMBC Aviation Capital, Ireland boasts a robust ecosystem that attracts lessors, investment managers and operators from around the world.

More than 25% of Irish SPVs are attributed to the aviation finance industry, with a 23% increase in total incorporations of aircraft leasing SPVs from 2023 to 2024. Coupled with strong interest from emerging markets, industry forecasts predict that Ireland is in a prime position to support incoming projects in 2026 and beyond.

The main tax incentives for setting up a leasing business in Ireland include:

• the 12.5% corporate tax rate on trading income, including qualifying foreign dividends paid out of trading profits
• a participation exemption from capital gains on qualifying share sales
• a 33% standard rate of tax on gains arising from the disposal of aircraft (subject to various reliefs / exemptions)
• stamp duty exemption on the purchase of aircraft
• a robust tax treaty network of more than 78 double taxation agreements (DTAs), with 75 in effect and with many major business jurisdictions
• unused losses can be carried forward
• employee tax incentives
• securitisation regime
• regulated Irish funds regime

As the aviation finance industry has matured, more innovative funding mechanisms are being explored including sourcing funding through Irish funds and SPVs.

An overview of Irish funds

Since the establishment of the funds and asset management industry in Ireland more than 30 years ago, we have helped investment managers from all over the globe to develop and expand their international distribution footprint. Ireland is the domicile for world-wide investment fund assets, making it the fourth largest global centre and the third largest in Europe. The cross-border distribution of Irish domiciled funds is central to Ireland’s role as a financial services hub in Europe, enabling the efficient flow of capital, supporting economic growth and enhancing investor choice across the globe. The combination of scale, regulatory excellence, trusted reputation and a strategic geographic position makes Ireland uniquely important for cross-border fund distribution within the EU and beyond.

The Alternative Investment Fund Managers Directive (AIFMD), implemented in July 2013, has transformed the EU regulatory landscape in the alternatives space. All non-UCITS funds, or Alternative investment Funds (AIFs) are covered by AIFMD which has introduced new organisational and operational transparency and conduct of business requirements on AIFMs and the funds they manage.

Ireland was the first jurisdiction to provide a regulated framework for AIFs and remains at the forefront of developments with the implementation of AIFMD. The AIFMD framework is in many ways reflective of pre-existing requirements in Ireland relating to supervisory oversight, an independent depositary, corporate governance, valuations and investor disclosure.

The Central Bank has clarified its regime applicable to Irish regulated AIFs, AIFMs and their service providers under the “AIF Rulebook”. The Rulebook maintains the essential features and advantages of Ireland’s regulated AIF offering while combining these with the new AIFMD framework. There are two main types of AIF in Ireland, the Qualifying Investor AIF and the Retail Investor AIF.

Qualifying Investor AIF

The Qualifying Investor AIF (QIAIF) is a regulated investment fund suitable for well-informed and professional investors. As the QIAIF is not subject to any investment or borrowing restrictions, it can be used for aircraft investment purposes.

The most popular legal structure is an Irish Collective Asset-Management Vehicle (ICAV) which is treated as a corporate vehicle which is fully exempt from Irish tax on its income and profits. It can meet the "check the box" requirements for US tax purposes. Additionally, no Irish VAT should arise on payment of management fees. Other legal structures include investment limited partnerships, common contractual funds and unit trusts.

Investors subscribe for shares in ICAV and generally receive distributions without incurring any Irish withholding tax, provided that the investors are not Irish non-exempt investors. Exemption from withholding tax also applies to redemptions and transfers of interests. Non-Irish investors are generally not subject to Irish tax.

Irish Section 110 SPVs

A Section 110 company (S110 SPV) is an entity incorporated and tax resident in Ireland, designed for the tax-neutral holding and management of certain qualifying assets - including loans, receivables and other financial instruments. Uniquely, section 110 of the Irish Taxes Consolidation Act grants these vehicles efficient tax treatment, making them an optimal choice for international financing, securitisation and structured investment transactions.

Typically, the entire issued share capital in an S110 SPV is held in trust by a Share Trustee for charitable purposes, ensuring independence and bankruptcy remoteness. The S110 SPV issues profit participating notes (PPNs) to investors, with different classes of PPNs (Class A, Class B, Class C, for example) designed to allocate income, control economic participation and manage treaty qualification tests.

Irish funds and Section 110 companies can be used inclusively or exclusively dependent on investor requirements.

Accessing treaty benefits

Ireland’s efficient and clear tax regime is open, transparent and fully compliant with OECD guidelines and EU law. The Irish framework is legislation-based and does not rely on rulings. Ireland has been credited with:

• having the highest rating in the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes
• being the first international fund domicile to sign an Intergovernmental Agreement (IGA) with the US in respect of the implementation of FATCA
• being an early adopter jurisdiction of the OECD’s Common Reporting Standard (CRS) regime

Spanning more than 75 countries across the EU, Middle East, Asia and South America, Ireland’s tax treaty network is one of the most developed and favourable  in the world. The availability of treaty benefits in a particular case will ultimately depend on the relevant tax treaty and the approach of the tax authorities in the treaty country. Consequently, treaty access needs to be reviewed on a case-by-case basis. View the full list tax treaties networks on the Irish Revenue website.

Typical investment activity and note issuance

Irish funds / SPVs are highly flexible investment vehicles, capable of originating loans, and acquiring loans or other finance assets including aircraft on both primary and secondary markets. The issuance of PPNs is commonly structured so that:

• interest paid to noteholders is equal to the net income of the SPV
• notes can be listed on a recognised stock exchange, offering further tax certainty and marketability

Parallel structures - using series of feeders and multiple SPVs - can cater for multi-jurisdictional investor groups, with Irish, US, Cayman, or other partnership vehicles feeding into the SPV holding direct US assets.

How Ogier can help

Ogier’s dedicated Investment Funds, Structured Finance, and Tax teams can provide comprehensive legal, tax, and regulatory support, ensuring clients’ objectives are met most efficiently in a complex and fast-moving global marketplace for aviation finance.

Ogier’s structured finance lawyers work closely with the corporate and fiduciary support of Ogier Global, delivering comprehensive, jurisdiction-specific services. Ogier Global act as an independent third-party administrator, offering innovative, bespoke and cost-effective services to clients.

Ogier’s Investment Funds team in Ireland offers the full spectrum of fund structuring, establishment, authorisation, and ongoing advisory services, including:

• establishment and authorisation of all types of UCITS and AIFs, covering a wide range of asset classes (private equity, credit, infrastructure, real estate, fund of funds, ETFs, and more)
• fund structuring and documentation (PPMs, prospectuses, constitutional documents, KIDs, and KIIDs)
• liaison and reporting to the Central Bank of Ireland
• service provider selection and contractual negotiation
• centralised management of regulatory, passporting, migration, and disclosures obligations

The Structured Finance and Capital Markets team supports clients across all capital markets and structured finance transactions - including aviation finance. The team acts as listing agent for debt securities and provides regulatory, taxation, and market abuse advice, leveraging Ogier’s global network to deliver efficient solutions across all key jurisdictions. Ogier's Aviation Finance experts will be at Airline Economics Dublin (25-28 January 2026) to discuss all your aircraft financing queries.

About Ogier

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice