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LAW OF THE AZERBAIJAN REPUBLIC

of May 26, 2026 No. 412-VIIQ

About financial leasing

This Law, according to Items 12, 13 and 15 parts I of article 94 of the Constitution of the Azerbaijan Republic, establishes the legal basis of activities in the field of financial leasing, and also legal, organizational and economic basis of regulation and control in this area for the purpose of development, promotion and strengthening of its role in economic growth.

Chapter 1. General provisions

Article 1. Main determinations

1.1. The main determinations used for the purposes of this Law have the following values:

1.1.1. purchase price - the remained amount paid by the lessee for acquisition of property right to leased property after lease expiration of the contract;

1.1.2. reversionary lease - lease in which the lessee is seller of leased property according to the lease agreement and which provides obligation of the lessee to acquire the property right to leased property after lease expiration of the contract;

1.1.3. lease - lease which provides transfer of leased property by the lessor to property and use of the lessee and corresponds to one or several of the following criteria:

1.1.3.1. The agreement of finance lease provides transfer of object of finance lease to property of the lessee after the term of finance lease or the right of the lessee to acquisition of object of finance lease at the specified or in advance determined price after the term of finance lease;

1.1.3.2. the term of finance lease exceeds 75 percent of useful life of object of finance lease;

1.1.3.3. residual cost of object of finance lease after the term of finance lease makes less than 20 percent from its market price of the beginning of finance lease;

1.1.3.4. the payment amount on finance lease, subject to payment during the term of finance lease, is equal or exceeds at least 90 percent of market price of object of finance lease of the beginning of finance lease;

1.1.4. The financial lessee (further referred to as with the lessee) - the legal entity or physical person performing business activity without creation of the legal entity which in exchange for payments on financial leasing accepts in property and use object of financial leasing for certain term and under appropriate conditions according to the agreement of financial leasing;

1.1.5. Activities for financial leasing - the business activity connected with provision of object of financial leasing in financial leasing at the expense of own means and (or) the raised funds of the financial lessor;

1.1.6. The agreement of financial leasing - the written agreement between the financial lessor and the lessee regulating forming, change and the termination of the relations of financial leasing;

1.1.7. Payments on financial leasing - the periodical payments made by the lessee for benefit of the financial lessor for use of object of financial leasing;

1.1.8. The financial lessor (further referred to as with the lessor) - the commercial legal entity or local branch of the foreign commercial legal entity which in accordance with the terms of the agreement of finance lease transfers the object of finance lease acquired at the seller to the possession and use of the lessee in exchange for payments on finance lease;

1.1.9. essential participation - immediate or indirect possession of shares, constituting 10 (ten) percent or more from the authorized capital of the lessor or allowing it to have significant effect on decision making in the legal entity in whom he is participant under the agreement;

1.1.10. the seller - person giving object of finance lease to the lessor according to the purchase and sale agreement including the lessee under the return agreement of finance lease;

1.1.11. aggregate value - the total amount of payments on finance lease, including purchase price;

1.1.12. Civil immunity is that fact that persons performing managerial functions of the lessor, owners of considerable share in the authorized capital of the lessor, the head of its executive body if the owner is legal entity and also beneficial owners observe requirements of article 17 of the Law of the Azerbaijan Republic "About fight against legalization of the property acquired in the criminal way, and terrorism financing".

1.2. Other concepts used in this Law have the values determined by regulatory legal acts of the Azerbaijan Republic.

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