Several codes and laws in Azerbaijan are being harmonized with the new draft law "On Financial Lease" to modernize the regulatory framework for leasing activities across the country. The legislative overhaul aims to create a more robust legal environment for financial transactions involving both movable and immovable property.
According to Operative Information Center-OMM, the proposed changes were discussed during a meeting of the Milli Majlis (National Assembly) Committee on Economic Policy, Industry, and Entrepreneurship. The amendments impact a comprehensive list of legislation, including the Civil Code, Tax Code, Competition Code, and laws concerning bankruptcy, banking, state duties, and the registration of legal entities. A key component of the reform involves the repeal of Chapter 39 of the Civil Code, which currently regulates "Leasing," to ensure all terminology and procedures align with the new dedicated law.
The draft legislation introduces specific regulatory mechanisms, such as requiring financial lease providers to submit credit history data to at least one credit bureau and establishing state fees for the registration of lessors by the Central Bank of Azerbaijan. Furthermore, the Law "On Private International Law" will be amended to clarify that in the absence of a prior agreement, the law of the country where the lessor is established or primarily operates will apply to international financial lease contracts.
This legislative initiative is part of Azerbaijan's broader economic strategy to improve the business climate and provide clearer legal protections for investors. By streamlining the rules governing financial leases, the government seeks to stimulate growth in sectors such as agriculture, manufacturing, and small business development, where leasing serves as a vital tool for capital investment and modernization.
