New Leasing Law, Law 72(I) of 2016

ASAP GlobalHomepage NewsNew Leasing Law, Law 72(I) of 2016

The Leasing Law, Law 72(I) of 2016, came into force on 28.04.2016, aiming to regulate the provision of leasing services to the public, and ensure the supervision of the financial leasing services providers’ activities, targeting at a smooth operation of economy and the financial sector.

The new legislation provides that financial leasing services may be provided to the public by authorized credit institutions in Cyprus or other member states of the European Economic Area (EEA) that are licensed to provide financial leasing services, and which provide such services through a branch or on a cross-border basis, by financial leasing companies which are subsidiaries of credit institutions established in EEA member states, and which provide such services in Cyprus through a branch or on a cross-border basis; and by a new category of regulated entity, namely financial leasing companies registered in Cyprus, licensed by the Central Bank of Cyprus to provide such services under new legislation.

According to 3 (2) of the Leasing Law, Law 72(I) of 2016, this law applies on the leasing services providers, excluding the following:

(a) providers which do not deal with the public, including the provision of leasing services by legal entities, exclusively, to their parent or their subsidiary company or to a subsidiary of their parent company;

(B) natural or legal persons whose principal activity is the sale of movable property and which provide leasing services for sale of movable property in the amount of five thousand euro (€5,000) per object, and only to the extent required for the exercise purposes of their main business

(C) lease services for which the agreement provides a credit for a total period of less than three (3) months.

The new legislation provides for and/or regulates, inter alia, the following:

(a) organizations which are entitled to provide leasing services,

(b) conditions for issuance of the operating licenses for leasing companies,

(c) content of lease contracts,

(d) activities supervision of leasing companies by the Central Bank,

(e) lease of an immovable property and many more.

By providing for transparency in leases and effective regulation, the Leasing Law should be a positive step in developing the leasing sector in Cyprus.

For advice on these issues, and other more detailed questions, please contact our Legal Department: xkasapi@asapglobal.net / lawyers@kkasap.legal

 

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