The leasing scheme is an original way of using foreign offshore companies. The scheme of international leasing is widely used in two cases: to transfer funds abroad on a legal basis, which in the future, depending on the goals and objectives of the offshore company owner, can be placed in foreign banks, for reverse reinvestment in Ukraine. According to the Law on Leasing, the object of leasing can be both immovable and movable property necessary for the economic activity of a resident enterprise.
Business entities in Ukraine that move objects of leasing (lease) across the customs border of Ukraine in accordance with concluded foreign economic agreements must be guided by Procedure No. 83. This Procedure states that the terms “operational leasing” and leasing, and the terms “lease (lease operations)”, “fixed assets” – in accordance with the provisions of the Profit Law.
Leasing is an entrepreneurial activity that is aimed at investing own or borrowed financial resources and consists in the provision by the lessor for exclusive use for a certain period of time to the lessee of property that is the property of the lessor or acquired by him into ownership on behalf of and agreed with the lessee from the relevant seller of property, provided payment by the lessee of periodic lease payments.
International leasing is a leasing agreement carried out by leasing entities that are under the jurisdiction of different states, or if the property or payments cross state borders (clause 2, article 4 of the Law on Leasing).
An international operational leasing agreement is concluded in the form of a bilateral written transaction between the lessor and the lessee and must meet the requirements of Ukrainian legislation. At the same time, the agreement must necessarily reflect the essential conditions, which, according to Article 7 of the Law on Leasing, include:
- names of the parties;
- object of leasing (composition and cost of property), conditions and terms of its delivery;
- the term for which the leasing transaction is concluded;
- the amount, composition and schedule of payment of lease payments, the conditions for their revision;
- conditions for the return of the leasing object in the event of bankruptcy of the lessee;
- terms of insurance of the leasing object;
- Some text
- conditions for registering a leasing object;
- conditions for the return of the leasing object upon expiration of the contract;
- conditions for early termination of the leasing agreement;
- the responsibility of the parties;
- date and place of the transaction.
Leasing scheme: a practical example
Suppose you need to purchase some equipment or goods abroad. Classical offshore and onshore companies are created. An offshore company issues a loan to an onshore company. An onshore company purchases the necessary equipment or goods and enters into a leasing agreement with a Ukrainian company (double tax treaty applies).
After leasing the equipment, the Ukrainian company pays regular lease payments to the Cypriot company. The onshore company transfers money to the offshore company in the form of loan repayment and interest on the loan. The Ukrainian company receives an official channel for transferring funds to offshore. Leasing payments are charged to cost, which can significantly reduce the tax payments of this enterprise.