President Ilham Aliyev has signed the law "On Financial Leasing," which was adopted by the Milli Majlis (National Assembly) on May 26. This legislative act is designed to strengthen the legal framework for financial leasing activities, promote their development, and enhance their contribution to the country's economic growth.
According to the Operative Information Center-OMM, the law establishes the legal, organizational, and economic foundations for the regulation and supervision of the leasing sector in Azerbaijan. It introduces standardized definitions for key industry terms, including "purchase price," "sale and leaseback," "financial leasing," "lessee," "lessor," and "beneficial owner," among others. Individuals or entities found in violation of the law's requirements will be held liable.
The law will come into force six months after its official publication. Following this, entities currently engaged in leasing activities—including those that have temporarily suspended operations—have a nine-month period to align their activities with the new requirements and apply to the Central Bank of Azerbaijan (CBA) for inclusion in the official registry. Entities that fail to comply within this timeframe must cease signing new leasing contracts, refrain from extending existing agreements, and remove terms such as "financial leasing" or "leasing" from their corporate names.
In addition to the law, the President has signed a decree on its implementation. Under this decree, the Cabinet of Ministers is tasked with preparing proposals to align existing presidential acts with the new law within four months. The Central Bank of Azerbaijan is mandated to approve several normative acts within six months, including regulations on minimum charter capital requirements for leasing entities, credit risk limits, and procedures for reporting to the centralized credit registry.
The introduction of this law marks a significant step in formalizing the financial services sector in Azerbaijan. By establishing clear regulatory oversight, the government aims to increase transparency, protect the rights of market participants, and foster a more stable environment for both lessors and lessees, ultimately supporting broader financial inclusion and economic development.
