Document from CIS Legislation database © 2003-2020 SojuzPravoInform LLC

LAW OF TURKMENISTAN

of September 15, 1999 No. 391-I

About leasing

(as amended on on March 31, 2012)

This Law determines legal, organizational and economic basis of leasing and is directed to investment attraction on the basis of leasing activities.

Article 1. The basic concepts used in this Law

In this Law the following basic concepts are used:

- leasing - the relations arising by transfer for a fee to use to the leasing recipient of the leasing of property caused by the agreement which is made or acquired in property by the lessor for the leasing recipient;

- the lessor - the physical person or legal entity performing transfer of subject of leasing to use to the leasing recipient of the agreement of leasing;

- the leasing recipient - the physical person or legal entity receiving under the agreement of leasing in use leasing subject;

- the seller of subject of leasing - physical person or legal entity at which the lessor acquires leasing subject.

Article 2. Legislation on leasing

1. The legislation on leasing consists of this Law and other regulatory legal acts of Turkmenistan governing the leasing relations.

2. If international treaties of Turkmenistan provide other provisions than containing in this Law, then provisions of international treaties are applied.

Article 3. Leasing subject

1. The companies and other property complexes, buildings, constructions, the equipment, vehicles and other personal and real estate relating to fixed assets can be subject of leasing.

2. The parcels of land and other natural objects, and also the property forbidden to free circulation in Turkmenistan or for which the special procedure for the address is established cannot be subject of leasing.

Article 4. Subjects of leasing

1. The lessor, the leasing recipient and the seller of subject of leasing can be subjects of leasing.

2. Any of subjects of leasing can be both the resident, and the nonresident of Turkmenistan.

3. Concerning specific subject of leasing combination in one person is not allowed:

- the lessor and the leasing recipient under the agreement of leasing;

- creditor of the lessor and leasing recipient of subject of leasing.

Article 5. Internal and international leasing

1. When implementing internal leasing by subjects of leasing residents of Turkmenistan are.

2. When implementing international leasing the lessor or the leasing recipient is nonresident of Turkmenistan.

Article 6. Agreement of leasing

1. The agreement of leasing can be signed in the form of the multilateral agreement with participation of the lessor, leasing recipient and seller of subject of leasing or the bilateral agreement between the lessor and the leasing recipient.

2. In case of the conclusion of the bilateral agreement of leasing between the lessor and the seller of subject of leasing the agreement on purchase and sale of subject of leasing is in addition signed if the subject of leasing is not property of the lessor (it is made by it).

3. By subjects of leasing the accompanying contracts on attraction of money, pledge, the guarantee and other can be signed.

Article 7. Contents of the agreement of leasing

1. The agreement of leasing, except the provisions determined by Article 600 of the Civil code of Turkmenistan" shall contain:

- name of the parties;

- subject of leasing, condition and terms of its transfer;

- the term for which the agreement of leasing is signed;

- the rights and obligations of the Parties connected with acquisition, transfer and content of subject of leasing;

- actions of the parties upon termination of the agreement of leasing;

- responsibility of the parties;

- legal addresses of the parties and bank details;

- date and place of agreement.

2. By agreement of the parties the agreement of leasing can include the following conditions:

- insurance of subject of leasing;

- force majeur circumstances;

- procedure subjects of leasing of control of observance of the agreement of leasing.

The agreement of leasing can include also other conditions according to the legislation of Turkmenistan.

3. The list, amount and cost of the additional services rendered by the lessor both prior to use, and in the course of use of the leasing recipient of leasing subject can be provided in the agreement of leasing.

4. The agreement of leasing is subject to the notarial certificate if one of agreement parties is physical person.

Article 8. Duration of the agreement of leasing

The duration of the agreement of leasing is fixed and shall exceed 80 percent of service life of subject of leasing if its service life constitutes less than 10 years; or to exceed 70 percent of service life of subject of leasing if its service life constitutes more than 10 years.

At the same time the estimated residual cost of subject of leasing at the end of the term of the agreement of leasing shall make less than 20 percent from its original cost.

Article 9. Change and agreement cancelation of leasing

Change and agreement cancelation of leasing are possible by agreement of the parties if other is not stipulated by the legislation Turkmenistan or the agreement of leasing.

Article 10. Leasing activities

1. Leasing activities - type of business activity of the lessor on implementation of the functions determined by the agreement of leasing.

2. The lessor can be:

- leasing companies (firms) - the legal entities created especially for implementation of leasing activities for whom it is the main.

Legal and (or) physical persons both residents, and nonresidents of Turkmenistan can be founders of the leasing companies (firms);

- banks in which constituent documents leasing activities are provided;

- legal entities for whom leasing activities are not the main and if such activities are provided in constituent documents;

- physical persons - individual entrepreneurs.

Article 11. Subleasing

The leasing recipient has the right to hand over the object of leasing received under the agreement of leasing in temporary ownership and use to the third party (subleasing) from written consent of the lessor, remaining responsible before it under the agreement of leasing.

Subleasing is drawn up by the agreement. At the same time in the agreement of subleasing of provision of this Law are applied in the attitude towards the sublessor, the subleasing recipient and the seller of subject of leasing respectively as to the lessor, the leasing recipient and the seller of subject of leasing.

The duration of the agreement of subleasing cannot exceed the duration of the agreement of leasing.

Article 12. Rights and obligations of the lessor

The lessor has the right:

- exercise control of observance by the leasing recipient of terms of the contract of leasing and other accompanying agreements;

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