The Law regulating Financial Leasing and the activities of Financial Leasing Companies of 2016 (the “Law”) was published in the Official Gazette and came into force on 28th April 2016.
The Law regulating Financial Leasing and the activities of Financial Leasing
Companies of 2016 (the “Law”) was published in the Official Gazette and came into force on 28th April 2016.
The Central Bank of Cyprus shall be the regulatory authority of financial leasing companies for the purposes of ensuring the smooth operation of the financial
leasing market and protecting the parties to such transactions.
Financial leasing is a method of medium to long-term financing, constituting an alternative to traditional credit financing (such as use of own funds or
banking loans), available to the public for the purposes of acquiring assets. A
leasing company (as “Lessor”) acquires, at the request of a client (the
“Lessee”), an asset which it then makes available to the Lessee for a certain
period of time, in exchange for frequent payments. While the Lessor has legal
ownership over the asset for the duration of the arrangement, the Lessee has
the right to use the lease object and avail of all benefits arising from it as
well as bear all risks and costs arising from the ownership.
In accordance with the provisions of the Law, financial leasing activities and
transactions may be provided to the public, by the following:
A financial leasing company established in Cyprus may set up or operate a branch or representative officer or offer services outside Cyprus, with the prior approval of the Central Bank.
The Law does not apply to the following:
A financial leasing company may provide both financial leasing services and ancillary services as these are defined in the Law, and any other relevant service which may be determined by the Central Bank. Its minimum issued and paid share capital must amount to at least EUR 200,000.
A legal person who offers financial leasing services to the public within the territory of Cyprus (except those excluded by the Law) may continue to do so, provided that within 2 months from the Law coming into force, it shall comply with the provisions of the Law and further submit to the Central Bank the documentation required under the Law. If an application for the relevant license is not made within 2 months, the person in question must cease to provide such services.
KPMG can assist you in this regard by providing the following services:
KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative ("KPMG International") a Swiss entity. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International Cooperative ("KPMG International") or KPMG member firms.