The Milli Majlis (National Assembly) of Azerbaijan has passed the draft law "On Financial Lease" in its third and final reading during a plenary session.
According to the Operative Information Center-OMM, the new legislation defines the legal, organizational, and economic foundations of financial leasing in Azerbaijan. The law aims to develop and promote leasing activities, thereby strengthening their role in the country's overall economic growth. The document clearly outlines key concepts, including "purchase price," "sale-leaseback," "financial lease," "lessee," "lessor," "leasing payments," "significant share," and "vendor."
The law will enter into force six months after its official publication. Following its implementation, entities currently engaged in leasing activities in Azerbaijan must align their operations with the new requirements within nine months and apply to the Central Bank of Azerbaijan for registration in the relevant registry. Entities that fail to comply within this period will be prohibited from signing new financial lease agreements or extending existing ones, and must remove leasing-related terminology from their official company names.
This legislative update is part of Azerbaijan's broader financial sector reforms aimed at diversifying the national economy and improving access to alternative financing for small and medium-sized enterprises (SMEs). By bringing leasing activities under the regulatory oversight of the Central Bank, the government seeks to increase transparency, protect consumer rights, and stimulate investment in various non-oil sectors of the economy.
