Aircraft Finance and Leasing in Bangladesh

by Barrister Tahmidur Rahman | Sep 14, 2026

Corporate & FinanceLessors, lenders and airlines8 min read

Aircraft Finance and Leasing in Bangladesh

Bangladesh law advice on aircraft finance and leasing for lessors, lenders, export credit agencies, airlines and helicopter operators: lease and loan documents, registration with the Civil Aviation Authority of Bangladesh, Cape Town Convention filings, tax, foreign exchange, insurance, deregistration and repossession.

Overview

How aircraft finance works for Bangladesh-registered aircraft

Aircraft are financed internationally but registered and taxed locally. When an aircraft is leased or financed for a local operator, the lessor or lender needs certainty that its ownership or security will be recognised in Bangladesh, that rent and loan payments can be remitted, and that the aircraft can be recovered and exported after default. We advise lessors, banks, export credit agencies, airlines and charter operators on aircraft finance and leasing with a Bangladesh connection, alongside the English, New York or Irish counsel who usually lead the documents. This work forms part of our corporate and finance practice.

Bangladesh is a contracting state to the Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol, having acceded in 2008. That gives creditors the International Registry and the treaty's remedies, but their practical value depends on the declarations Bangladesh made, how domestic law and the authorities give effect to them, and how local courts respond in a default. Irrevocable deregistration and export request authorisations are a standard part of most aircraft finance transactions here, and we advise on their form, lodging with the Civil Aviation Authority of Bangladesh and the steps needed to use them.

Local issues go beyond the treaty. The Civil Aviation Authority of Bangladesh maintains the national aircraft register and regulates airworthiness, operations and air operator certificates, and registration documents must show the owner and operator correctly. Lease rentals and loan repayments to foreign lessors and lenders involve foreign exchange rules, Bangladesh Bank reporting and, for borrowing, approvals through Invest Bangladesh. Withholding tax applies to many non-resident payments, and the Finance Act 2026 reduced withholding on interest paid to non-residents to 10%. Stamp duty, customs treatment of aircraft and engines, and insurance and reinsurance also need attention in any aircraft finance deal.

Default and repossession are where local advice matters most. A structure that looks robust on paper can falter if the aircraft is detained for unpaid charges, if records and technical documents are held by the operator, or if a local court grants an injunction preventing removal. We advise lessors and lenders before closing on how enforcement would actually work in Bangladesh, and act quickly when a default arises: serving notices, coordinating with the aviation authority, dealing with airport and handling charges, and taking court action where necessary. We also act for operators negotiating rent deferrals, restructurings and lease returns.

Our role is usually that of Bangladesh counsel within a wider international team. We review lease, loan, security and guarantee documents for local law issues, give legal opinions on capacity, authority, enforceability and choice of law, and coordinate filings, approvals and conditions precedent in Dhaka. Barrister Tahmidur Rahman, who advises on transactions, finance and investment, and Barrister Remura Meheruba Mahbub lead this work, with Adv Syed Wahid on enforcement and litigation. We work with counsel in the UK, US, UAE, Singapore, India and China, and clients can reach us through our Dhaka office.

01 · What we handle

Core workstreams

  • Operating and finance leases
  • Secured loans and ECA-backed finance
  • Registration and Cape Town filings
  • Tax, remittance and approvals
02 · How it runs

Four clear stages

  1. 01Review the structure
  2. 02Approvals and filings
  3. 03Opinions and closing
  4. 04Life of the asset
03 · Start here

Talk to a partner

Consultations in Dhaka or by video. Scope, team and fees are agreed in writing first.

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How we help

Our aircraft finance and leasing work

Workstream 01Corporate & Finance

Operating and finance leases

  • Review the structure
  • Approvals and filings
  • Opinions and closing
  • Life of the asset
Workstream 02Corporate & Finance

Secured loans and ECA-backed finance

  • Review the structure
  • Approvals and filings
  • Opinions and closing
  • Life of the asset
Workstream 03Corporate & Finance

Registration and Cape Town filings

  • Review the structure
  • Approvals and filings
  • Opinions and closing
  • Life of the asset
Workstream 04Corporate & Finance

Tax, remittance and approvals

  • Review the structure
  • Approvals and filings
  • Opinions and closing
  • Life of the asset
Workstream 05Corporate & Finance

Default, repossession and returns

  • Review the structure
  • Approvals and filings
  • Opinions and closing
  • Life of the asset
Workstream 06Corporate & Finance

Restructuring and disputes

  • Review the structure
  • Approvals and filings
  • Opinions and closing
  • Life of the asset
01

Operating and finance leases

We act for lessors and lessees on operating leases, finance leases, wet and dry leases, sale and leaseback and lease novations involving Bangladeshi operators. We review the documents for local law points, including registration, tax gross-up, payment mechanics and insurance, and advise on the conditions precedent that must be satisfied in Bangladesh before delivery, so that the structure works on the day of closing.

02

Secured loans and ECA-backed finance

We advise banks, export credit agencies and borrowers on secured aircraft and engine loans, including mortgages, security assignments, guarantees and share pledges. We assess the recognition of foreign-law security in Bangladesh, advise on approvals for foreign borrowing, review the borrower's corporate authorisations and deliver the Bangladesh law opinions that lenders, credit agencies and insurers require before they release aircraft finance funds.

03

Registration and Cape Town filings

We coordinate registration of aircraft and interests with the Civil Aviation Authority of Bangladesh, advise on the International Registry and Cape Town Convention requirements, and prepare and lodge irrevocable deregistration and export request authorisations. We also handle changes of ownership, transfers between lessors and the documentary steps needed when an aircraft enters or leaves the Bangladesh register, so that the register, the International Registry and the aircraft finance documents stay consistent.

04

Tax, remittance and approvals

Payments under aircraft finance and lease documents raise withholding tax, VAT, stamp duty, customs and foreign exchange questions. We advise on the current treatment of rentals, interest, maintenance reserves and fees, on Bangladesh Bank and bank-level documentation for outward remittances, and on how tax gross-up and indemnity provisions will work in practice for the lessor, lender and operator over the life of the aircraft finance arrangement.

05

Default, repossession and returns

When an operator defaults, we advise lessors and lenders on termination, notices, use of deregistration authorisations, detention and airport charges, access to aircraft records and the export of the aircraft from Bangladesh. We take urgent court action where needed and resist injunctions that would prevent repossession. For lease returns, we help manage redelivery conditions, technical records disputes and final settlement, so that the aircraft can be remarketed quickly.

06

Restructuring and disputes

Airlines facing financial pressure may seek rent deferrals, lease amendments or wider restructurings. We act for lessors, lenders and operators in these negotiations, advise on insolvency risk and priority of claims, and represent clients in disputes over maintenance reserves, return conditions, insurance claims and unpaid rent, in the Bangladesh courts or in arbitration and foreign proceedings coordinated with overseas counsel, protecting each party's aircraft finance position.

RecognitionThe Legal 500Asia Pacific ranks Tahmidur Remura Wahid (TRW) Law Firm for dispute resolution in Bangladesh.
Cross-border reach6 jurisdictionsMatters coordinated with counsel in the UK, US, UAE, China, India and Singapore.
Bar and admissionsDhaka and LondonBarristers and advocates in Bangladesh, with a solicitor of England and Wales (non-practising).
HeadquartersDhakaHouse 410, Road 29, Mohakhali DOHS. Consultations in person or by video.
Who leads this work

Partner-led, on every matter.

Corporate & Finance matters at TRW are led by partners, supported by associates, with one responsible lawyer from first advice to final outcome.

Meet the firm →
01

Is Bangladesh a party to the Cape Town Convention, and what does that mean for aircraft finance?

Yes. Bangladesh acceded to the Cape Town Convention and its Aircraft Protocol in 2008, with the Protocol taking effect for Bangladesh in 2009. Creditors can register international interests on the International Registry and rely on the treaty's default remedies, subject to the declarations Bangladesh has made. In practice, the protection is strongest when combined with properly lodged deregistration authorisations, good local documentation and a clear plan for enforcement. We advise on how the treaty interacts with Bangladeshi law, and on the practical steps lessors and lenders should take at closing to make their aircraft finance rights effective here.

02

How is an aircraft registered in Bangladesh when it is owned by a foreign lessor?

Aircraft operated by Bangladeshi airlines are usually entered on the Bangladesh register maintained by the Civil Aviation Authority of Bangladesh, even when a foreign lessor or special purpose company owns them. The registration documents should correctly identify the owner and operator, and the lease or finance documents will usually require the operator to register the aircraft, record the owner's interest and prevent other registrations. We review the registration documents, coordinate filings with the authority and confirm that the register reflects the transaction. Errors in registration can delay deregistration later, so they are worth correcting before any problem arises.

03

Can lease rentals and maintenance reserves be paid in US dollars to a lessor outside Bangladesh?

Yes, provided the transaction is properly documented and the payments comply with foreign exchange rules. Banks handling the remittance will require the lease, evidence of import of the aircraft or engine, tax clearances and other supporting documents, and some arrangements need prior approval. Dollar availability in the Bangladeshi banking system has at times caused real delays, so lessors should understand the remittance process and build reasonable mechanics into the documents. We advise on the documentation banks expect, help resolve remittance delays, and review payment provisions so that aircraft finance obligations can be met reliably.

04

What withholding tax applies to aircraft lease payments and loan interest paid to non-residents?

Payments to non-residents are generally subject to withholding tax, with the rate depending on the nature of the payment and any applicable double tax treaty. The Finance Act 2026 reduced withholding on interest paid to non-residents to 10%, which is relevant to loans and some finance lease structures. Operating lease rentals, maintenance reserves and fees may be characterised differently. Most aircraft finance documents include tax gross-up clauses, so the characterisation matters commercially to both parties. We confirm the current treatment for each payment stream and advise on treaty relief, documentation and the operation of gross-up and indemnity clauses.

05

How can a lessor repossess and export an aircraft from Bangladesh after an operator defaults?

The route depends on the documents in place and the operator's cooperation. With a valid deregistration and export request authorisation lodged with the aviation authority, the lessor can seek deregistration and export, subject to the authority's procedures and any lawful detention for unpaid charges. Access to the aircraft, technical records and spare parts often needs negotiation or court support. An operator may seek an injunction to prevent removal, which must be resisted promptly. We prepare lessors before default, serve notices, coordinate with the authority and airports, and take urgent action in the High Court Division where required.

06

Do aircraft finance documents governed by English or New York law work in Bangladesh?

Generally, Bangladeshi courts respect the parties' choice of foreign governing law in commercial contracts, but some matters are always governed by local law, such as registration, title formalities for assets in Bangladesh, enforcement procedure, tax and foreign exchange. Foreign court judgments are not automatically enforceable in Bangladesh as a matter of course, and enforcement depends on reciprocal arrangements and local procedure. Arbitral awards under the New York Convention can be easier to enforce. We advise on how dispute resolution clauses will operate here, and provide Bangladesh law opinions covering choice of law, submission to jurisdiction and enforceability.

07

What approvals are needed for a Bangladeshi airline to borrow abroad to buy or refinance aircraft and engines?

Foreign borrowing by private Bangladeshi companies is regulated. Depending on the structure, approvals may be required through Invest Bangladesh, which took over BIDA's functions in August 2026, and Bangladesh Bank, with conditions on pricing, tenor and use of proceeds. State-owned operators face additional government and ministry processes. Finance leases may be treated differently from loans, and the analysis can change with the structure. We review the proposed aircraft finance arrangement, identify the approvals and filings required, prepare applications and track them, so that conditions precedent are satisfied without last-minute delays.

08

What insurance requirements apply to leased or mortgaged aircraft operated by Bangladeshi airlines?

Lessors and lenders typically require hull, war risk and liability insurance naming them as additional insureds and loss payees, with reinsurance placed in the international market and cut-through or assignment arrangements protecting the financier. Local regulations may require part of the cover to be placed with Bangladeshi insurers, which then reinsure abroad. The documents should make clear how claims proceeds flow, who controls settlement and how cover continues after default or termination. We review the insurance structure against Bangladeshi requirements and the aircraft finance documents, and advise on certificates, endorsements and claims coordination with brokers and insurers.

How a matter runs

From first call to resolution.

  1. 01

    Review the structure

    We review the term sheet and draft lease, loan and security documents, identify Bangladesh law issues on registration, tax, foreign exchange and enforcement, and agree local conditions precedent with the deal team and lead counsel at an early stage.

  2. 02

    Approvals and filings

    We obtain corporate authorisations, regulatory approvals and registrations, coordinate Civil Aviation Authority of Bangladesh filings and lodge deregistration authorisations, keeping a shared aircraft finance closing checklist that the whole team can follow.

  3. 03

    Opinions and closing

    We deliver Bangladesh law legal opinions on capacity, authority, enforceability and choice of law, confirm satisfaction of local conditions and support delivery so that the aircraft finance transaction closes on time.

  4. 04

    Life of the asset

    We advise on transfers, amendments, remittance problems, insurance claims, defaults, repossession and lease returns, acting quickly in Bangladesh when the aircraft, its records or the payments due are at risk.

“Demonstrates an extraordinary command over both domestic litigation and international arbitration.”

The Legal 500 Asia Pacific, Bangladesh: Dispute resolution, client feedback

FAQ

Questions, answered.

Still unsure? Email info@trw.co with a short outline of the matter.

What is an IDERA and why does it matter?
An irrevocable deregistration and export request authorisation is a document, provided for under the Cape Town Convention framework, by which the operator authorises the creditor to request deregistration and export of the aircraft. Lodged with the Civil Aviation Authority of Bangladesh, it can significantly speed up recovery after a default. Its effectiveness depends on correct form, proper lodging and the authority's procedures. In aircraft finance practice here, an IDERA is a core closing deliverable that should be refreshed whenever the lease is novated.
Do you act as lead counsel on aircraft finance transactions?
Usually we act as Bangladesh counsel alongside lead counsel in London, New York, Dublin, Singapore or elsewhere who draft the main documents. We focus on local law issues, approvals, filings, opinions and enforcement. For smaller or domestic transactions, including helicopter and general aviation finance, we can take a broader role in preparing documents under Bangladeshi law where that suits the parties. Either way, our focus is on making the aircraft finance structure work in practice in Bangladesh, not only on paper.
Can engines be financed separately from airframes?
Yes. Aircraft engines are recognised as separate objects under the Cape Town framework and are often leased or financed independently, particularly spare engines and engines on short-term lease. Engine finance raises particular issues in Bangladesh, including tracking engines that move between airframes, customs treatment of temporary imports and the recovery of engines installed on aircraft owned by others. We advise on the documentation and practical protections, including title and security over engines, removal rights, and how engine finance interacts with the airframe's aircraft finance documents.
What happens to aircraft finance if an airline becomes insolvent?
Insolvency of an operator raises difficult questions of priority, possession and the treatment of unpaid charges. The Cape Town framework includes insolvency-related remedies, but their availability depends on declarations and local implementation. Bangladeshi insolvency law, including winding up under the Companies Act 1994, will also be relevant. We advise creditors early on protecting their position, including monitoring, notices and steps to secure the aircraft, and act in any winding up or related court proceedings. Documents should be reviewed at the first sign of distress.
Can airport or navigation charges lead to an aircraft being detained?
Unpaid airport, navigation and handling charges can lead to detention of aircraft in many jurisdictions, and lessors may find that an operator's debts affect their asset. Lease documents should require the operator to pay charges promptly and provide information, and lessors should monitor arrears. On default, we help identify outstanding charges, negotiate with authorities and service providers, and secure release of the aircraft. Charges and arrears should be checked as part of any aircraft finance due diligence on a Bangladeshi operator.
Do you provide legal opinions for lenders and lessors?
Yes. We provide Bangladesh law opinions on the capacity and authority of Bangladeshi parties, the validity and enforceability of the documents, choice of law and jurisdiction, registration, tax and foreign exchange matters, and the effect of the Cape Town Convention. We agree the scope and assumptions with lead counsel early so that the opinion can be delivered at closing without delay. We also provide capacity and enforceability opinions for refinancings, novations and transfers of existing aircraft finance arrangements.
How long do approvals and filings usually take?
Timing varies with the structure, the authorities involved and the completeness of the documents. Corporate authorisations and registrations can often be completed quickly, while foreign borrowing approvals and some remittance arrangements take longer. We give a realistic timetable after reviewing the transaction and keep the deal team informed of progress so that delivery dates can be planned around local steps. Starting the Bangladesh workstream early is the simplest way to avoid aircraft finance closings slipping because of local approvals.
Do you act for Bangladeshi airlines and operators?
Yes. We advise Bangladeshi operators on negotiating leases and finance documents, understanding their tax and foreign exchange obligations, obtaining approvals, managing lessor relationships, and handling disputes over maintenance reserves, return conditions or rent. Where an operator is under financial pressure, we advise on restructuring options and negotiations with lessors and lenders, avoiding conflicts with any lessor or lender we advise on the same aircraft. We check conflicts before accepting any instruction on either side of an aircraft finance relationship.

Financing or leasing aircraft into Bangladesh? Contact us.

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