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Leasing activities are a type of investment activity. Certain types of goods (usually very expensive items, such as airplanes) most of the time can be purchased only through lease agreements.

International leasing implies that the lessor is not a Russian resident, and object of the lease may be manufactured in Russia or abroad.

A foreign company is not obligated to create a permanent representation or a branch office in Russia or to have a foreign or Russian leasing license in order to conduct leasing activity in Russia. A foreign company simply enters into a leasing agreement with a Russian company, obtains the object of the lease through their own or loaned funds, and releases the object to the Russian lessee. The object of the lease may be purchased abroad as well as in Russia, including purchase from the lessee (this qualifies as “leaseback”).

Taking into consideration that leased property may pass into the ownership of the Russian company at the end of the contract, the procedure to import the property from abroad is very similar to the procedure for importing under an installment payment plan or purchase on credit from a Russian company by a foreign company.

However, in the case of a lease:

• Ownership of the property does not change (either at all or until the expiration of leasing contract, if the contract includes provisions for buying-out of the property). This significantly decreases material and commercial risks affiliated with business activity in Russia (raiders are less interested in a company which has no valuable capital assets but does have obligations).
• The property may remain on the lessor’s balance sheet; if a lessor is a foreign company, there is no property tax obligation in Russia.
• The foreign lessor may pay customs fees in installments, deducting it from received leasing payments. Lease payments are permitted under what is known as the "Temporary Importation Regime."
• The lessor’s revenues are not taken into account in determining the property’s customs value.

Foreign lessor may receive credit in a Russian bank for purchase of property without too much red tape. That is, if it is satisfied with offered terms of credit. In case when Russian bank is “friendly” towards foreign lessor, they would only need to take care of technical details.

Federal Law # 115ФЗ “On Countermeasures Against Legitimization (Laundering) of Criminal Proceeds” is immediately related to leasing activity. In accordance with article 6, paragraph 4 of the above-mentioned law, offering or receiving movable property based on an agreement of financial leasing exceeding 600,000 rubles in value are subject to state regulation. Thus, leasing companies (including foreign companies conducting leasing activity in Russia through accredited standalone subdivisions) must be registered and must file data on such transactions to the Federal Service for Financial Monitoring. If the lessor does not have a separate subdivision in Russia, it is not subject to these requirements.

International Leasing: Benefits of Customs Regimes

If the leased property is imported by a foreign lessor, the Temporary Importation Regime may be used in accordance with the Customs Code of the Customs Union, or a special regime prescribed by the Law “On Financial Leasing.”

Both of these laws include provisions for customs fee payment methods which differ from those used in the importation of goods for free circulation:

• Payments of customs dues and VAT may be done progressively over two or more years;
• Customs fees and taxes may be otherwise paid in the amount of property customs value, with further payments made simultaneously with the receipt of lease payments or up to 20 days after receiving lease payments.

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