What is leasing



The contract is between the lessor (the company providing the equipment for rent for a long term) and the lessee (the tenant who pays for the use of the equipment). After the expiration of the contract, the tenant-firm has the right to conclude a new contract or extend the old one. Also, the lessee has the opportunity to purchase equipment at residual value.
Acquisition of equipment for this type of contract allows to reduce the tax burden of the company (in the regulation of income tax). The subject of leasing are non-consumable things (buildings, equipment, businesses, vehicles, facilities and other immovable and movable property).
The income of the leasing company is made up of the margin it makes on equipment (banks work in a similar way, providing loans to their customers). This mark-up can be significant. At the end of the rental period, the client receives the equipment itself at a minimal cost (and in some cases free of charge).
There are options for international leasing.In this case, the companies that enter into a contract may be located in different countries. In this case, even industrial enterprises and production can be leased. The only condition should be their subsequent commercial use for the purpose of making a profit and providing services. But in Russia since January 1, 2011, this condition is not mandatory.
Financial leasing is distinguished when, after the expiration of the contract term, the subject of the contract (equipment) is transferred to the lessee for free; and operational leasing, when the equipment at the expiration of the contract by the tenant is repurchased.
The exception in this case is only natural objects and land, which have a special order of treatment.