You can soon lease-finance expensive industrial equipment
ABU DHABI 5 February 2018: The Federal National Council (FNC) has approved the draft federal law on finance leasing, after amendments and addition of a number of articles and clauses.
The draft law also sets an imprisonment term or a fine of Dh200,000 to Dh10 million, against those who practice finance leasing or use the phrase or any synonym thereof in their trade names without a licence.
The draft law confirms that finance leasing cannot be practised in the country without a licence from the Central Bank. Any contract without a licence from the Central Bank will be considered void. Also, any individual who is not licenced by the Central Bank to practice finance leasing is not allowed to use the phrase “finance leasing,” or any synonym of it in their trade name. The Central Bank is in charge of licencing regulations, the practice of finance leasing in the country, and for licencing of foreign finance leasing companies’ branches, said Wam.
FNC members stressed that the draft law represents an important qualitative addition to the legislative and legal framework for the organisation of this vital economic activity in the country. It strengthens the ability of economic institutions and establishments to compete and keep up with international development, contributes to attracting industrial investments and financial flows and develops financing mechanisms in a way that helps achieve the country’s developmental goals.
Discussing the draft law, in the presence of Obaid bin Humaid Al Tayer, Minister of State for Financial Affairs, the FNC affirmed that the draft law will contribute to helping industrial and commercial projects receive equipment and production tools on rent, with the right to ownership at the end of the leasing period without having to resort to bank financing in order to buy the equipment directly.