The law defines the general legal and organizational principles of financial leasing in Ukraine in accordance with international legal standards in this area.
Adopted Law No. 1111 is a new version of the Law of Ukraine “On Financial Leasing”.
The Law Of Ukraine defines “financial leasing” as a type of legal relations under which the lessor undertakes, in accordance with the financial leasing agreement, for the period and for the fee specified in such agreement, to transfer to the lessee’s possession and use a piece of property (object) belonging to the lessor under the right of ownership and acquired by the lessor without any prior arrangement with the lessee, or property deliberately purchased by the lessor from a seller (supplier) in accordance with the specifications and conditions established by the lessee.
In such case at least one of the characteristics of financial leasing are required:
- transfer for a period during which no less than 75% of the original value is depreciated (but for no less than 1 year), with the lessee’s commitment to purchase the object of financial leasing, with subsequent transfer to the lessee of the title to the object at the price determined by the contract;
- the amount of lease payments at the time of conclusion of the contract is equal to or exceeds the initial value of the object;
- the book (residual) value of the object at the point of termination of the contract is no more than 25% of the original value (price) of such object;
- the object was made to the lessee’s order and upon the expiry of the contract cannot be used by persons other than the lessee.