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

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

Agenda In Context: PRC Aviation market and the Tianjin Free Trade Port Our Panel International Lessor Survey Feedback/Panel Topics Page 3 © Berwin Leighton Paisner

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 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 Page 4 © Berwin Leighton Paisner

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

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 Page 6 © Berwin Leighton Paisner

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 Page 7 © Berwin Leighton Paisner

Drivers for Tianjin SPC structures “Would establishing and onshore presence in DFTP increase opportunities for you to win business from PRC Airlines?” Page 8 © Berwin Leighton Paisner 82%12% 6%

Repatriation of income and capital “Have you already established an onshore presence in the DFTP?” Page 9 © Berwin Leighton Paisner Yes (12%) Yes (12%) No (88%) No (88%)

Drivers for Tianjin SPC structures “Are you or would you consider establishing and onshore presence in the DFTP” Page 10 © Berwin Leighton Paisner 59%12% 29%

Repatriation of income and capital Does “Movement of monies and profit offshore” impact you decision as to whether to set up in the DFTP”? Page 11 © Berwin Leighton Paisner 94% 6%

Onshore aircraft ownership considerations Does “onshore ownership of aircraft in the PRC” impact you decision as to whether to set up in the DFTP”? Page 12 © Berwin Leighton Paisner 65%6% 29%

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] Page 13 © Berwin Leighton Paisner 6% 35% 59%

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”? Page 14 © Berwin Leighton Paisner 82% 12%6%

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. Page 15 © Berwin Leighton Paisner

Doing business in the Tianjin Free Trade Zone - opportunities and challenges for foreign lessors and financiers David Brotherton, Partner Berwin Leighton Paisner LLP Justin 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