Leasing is considered an important aspect when it comes to the finances for the corporations, primarily in the cases of funds for the expensive capital equipment like the machinery, vehicular assets, equipment, aircraft, vessels, etc. and the individual for the financing of vehicular assets and real estates.
The UAE Federal Law Number 8 of 2018 concerning the Law on Finance Lease (the Law) which was active from 1 January 2019. The Law has dealt with the concerns of introduction on a legislative base where the sector can considerably rely on.
The Law makes provisions for the regulatory framework in order to conduct finance lease business in the United Arab Emirates. This Law is made applicable to all the financial lease relating to all the assets which are movable and immovable, including real estate, vessels, aircraft, vehicles, machinery, plants and equipment.
Features of the Law:-
- Registering the Finance Lease Contracts
- Delivering the leased asset
- Prescriptive provisions relating to finance lease contracts
- Selection of the supplier as well as the leased asset
- Asset ownership
The Law is welcomed with open arms in the regulatory division in the UAE legislative spectrum. The Law puts forth a legal framework to conduct the business of finance leases. The corporations which carry out this business are formerly encouraged to undertake a complete review of the contracts concerning the financial lease to ensure that they perfectly align with the law and the concerned banking regulations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.