of July 23, 2002 No. 121
About finance lease (leasing)
Accepted by General Court of Jogorku Kenesh of the Kyrgyz Republic on June 13, 2002
Approved by the Meeting of national representatives of Jogorku Kenesh of the Kyrgyz Republic on July 3, 2002
The purposes of this Law are development of forms of investments on the basis of finance lease - leasing (further - leasing), protection of the property rights, rights of participants of investment process, ensuring efficiency of investment.
In this Law legal and organizational and economic features of leasing are determined.
1. Scope of this Law is leasing of the property relating to inconsumable things, including the parcels of land (except other natural objects), transferred to temporary ownership and use to physical persons and legal entities.
2. Legal relationship on leasing are regulated by the Civil code of the Kyrgyz Republic, this Law, and also other regulatory legal acts published according to them.
3. If the international treaty of the Kyrgyz Republic ratified in the procedure established by the law determines other rules, than those which are provided by this Law are applied rules of the international treaty.
In this Law the following basic concepts are used:
leasing - set of the economic and legal relations arising in connection with implementation of the agreement of leasing, including acquisition of subject of leasing;
the agreement of leasing - the agreement according to which the lessor (further - the lessor) shall acquire in property specified by the lessee (further - the leasing recipient) property at the seller determined by it (leasing recipient) and to provide to the leasing recipient this property for a fee in temporary ownership and use.
At the same time the agreement of leasing shall contain one or more of the following signs:
- upon termination of the term of the agreement of leasing the subject of leasing carries over the leasing recipient;
- the agreement of leasing provides repurchase right by the leasing recipient of subject of leasing upon termination of the term of the agreement of leasing at the price which is specified in the agreement of leasing;
- the term of the agreement of leasing constitutes more than three quarters of economic life of subject of leasing (in this case the ownership to the leasing recipient can not be transferred);
- the amount of leasing payments calculated at market rate shall be at least 90 percent of cost of subject of leasing;
- the subject of leasing is fixed asset and has special character so only the leasing recipient can use it without essential modifications.
The agreement of leasing can provide that the choice of the seller and acquired property is performed by the lessor.
leasing activities - the type of investing activities directed to investment of own and/or borrowed funds of the lessor under the agreement of leasing.
1. Any inconsumable things can be subject of leasing, including: the companies and other property complexes, buildings, constructions, the equipment, vehicles and other personal and real estate used for business activity.
2. As subject of leasing natural objects, except the parcels of land, and also the property forbidden by the legislation of the Kyrgyz Republic for free circulation or for which the special procedure for the address is established cannot act.
Subjects of leasing are:
- the lessor - the legal entity or physical person which is engaged in individual business activity in the procedure established by the legislation which at the expense of own and/or borrowed funds acquires during implementation of the agreement of leasing in property property also presents him as leasing subject to the leasing recipient for certain payment for certain term and under certain conditions in temporary ownership and in use with transition or without transition to the leasing recipient of the property right regarding leasing;
- the leasing recipient - the legal entity or physical person which is engaged in individual business activity in the procedure established by the legislation which according to the agreement of leasing shall accept leasing subject for certain payment for certain term and under certain conditions in temporary ownership and in use according to the agreement of leasing;
- the seller - physical person or legal entity which sells to the lessor in the caused time the property which is leasing subject.
Concerning subject of leasing combination of obligations of the lessor and leasing recipient is not allowed.
1. Leasing company - the commercial organization (the resident and the nonresident of the Kyrgyz Republic) who is carrying out according to the legislation of the Kyrgyz Republic and with the constituent documents of function of the lessor.
2. Legal, physical persons (residents and nonresidents of the Kyrgyz Republic) can be founders of the leasing companies.
3. Leasing company - the nonresident Kyrgyz the Respublikiinostranny legal entity performing leasing activities in the territory of the Kyrgyz Republic.
4. The leasing company has the right to raise funds of legal entities and/or physical persons (residents and nonresidents of the Kyrgyz Republic) for implementation of leasing activities in the procedure established by the legislation of the Kyrgyz Republic.
Voided by the Law KR of July 4, 2005 No. 95
Internal leasing - leasing form in case of which the lessor and the leasing recipient are residents of the Kyrgyz Republic.
International leasing - leasing form in case of which the lessor or the leasing recipient is nonresident of the Kyrgyz Republic.
Returnable leasing - type of leasing in case of which the seller can act at the same time as the leasing recipient within one leasing legal relationship.
Subleasing - type of leasing in case of which the leasing recipient (sublessor), according to this Law and the agreement of leasing, gives to the third party (subleasing recipient) to temporary ownership and use for the entrepreneurial purposes for a fee and for the term of in accordance with the terms agreement of subleasing the property received earlier from the lessor under the agreement of leasing and constituting leasing subject. At the same time the sublessor and the subleasing recipient act as the lessor and the leasing recipient, have the rights and perform the duties determined by this Law for these participants of the leasing transaction. The term of the agreement of subleasing shall not exceed the duration of the agreement of leasing.
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