VII International forum
“Marine Industry of Russia”
Hotel complex
«President-Hotel»
Department of affairs of the President of the Russian Federation

Moscow, 24, B.Yakimanka Str
24-25 May 2017
 
Forum bulletin


More on leasing in the marine industry of Russia

Leasing is one of investments activities. The lessor acquires title to the property from the vendor and assigns it to the lessee for temporary possession and use for a certain fee.

The leasing deal is a complex of contractual relations. Its direct participants are the lessor, lessee and provider (vendor) of the property. The crediting bank, pledger (guarantor), underwriter and other economic agents are indirect parts of the transaction.

In comparison to the direct lending or purchase, the leasing is a much more efficient option. It does not require to invest capital immediately, and the leasing subject is paid by installments out of the incomes of its use. Besides, income and property tax mitigation is enabled. Other advantages of the leasing are the possibility to refund VAT paid as part of lease payments. The leasing compares favorably with the flexible payment schedule. It ensures quick renewal of the productive capacities without withdrawal of considerable sums from the turnover.

Law

The leasing sphere is regulated by the following documents:

  • The Civil Code of the Russian Federation (Ch. 34, paragraph 6);
  • The letter of the Federal State Statistics Service of the Russian Federation №24-1-21/483 On Recording Leasing Equipment Expenditures dated 13/03/1996;
  • The order of the Ministry of Finance №17 dated 17/02/1997;
  • The UNIDROIT Convention on International Financial Leasing;
  • The Federal Law №16-ФЗ On Accession To the UNIDROIT Convention on International Financial Leasing dated 08/02/1998;
  • The Tax Code of the Russian Federation. Chapter 21. Value-Added Tax;
  • The Federal Law №164-ФЗ On Financial Lease (with amendments dated January 29, December 24, 2002; December 23, 2003; August 22, 2004, June 18, 2005) dated 29/10/1998.

Situation in Russia

In 2007, V. Putin, the President of the Russian Federation, signed a decree stipulating foundation of the United Shipbuilding Corporation (USC). This corporation plays an important role in the stimulation of the civil shipbuilding. Some steps to developing the leasing were taken.

The global financial crisis could not but adversely affect investments commitments and expansion plans of the companies of the transport industry. Under slump of industrial output in the country and reduction of import, traffic volume decreased. Proceeds and profits of the transport companies also decreased.

Altogether, the volumes of leasing in Russia have been growing very fast in recent years. The total volume of new leasing contracts made and financed by Russian companies increased more than 1.5 times per year. Such performance is quite expectable, since along with other advantages, use of the property under the lease agreement provides considerable easing of the tax burden.

State offices have realized the importance of the leasing relations and the fact that they can be the necessary alternative to conventional sources of the capital assets reproduction of the entities in the marine industry. Thus, for example, the Ministry of Transportation was authorized to execute, on behalf of the Russian Federation, the rights of the shareholder of the State Transport Leasing Company (STLC) which is one of the largest Russian lessors for seagoing vessels. Such decision was adopted by the Regulation of the Government of the Russian Federation №93 dated February 4, 2009. Earlier these functions were under the jurisdiction of the Federal Agency for the Administration of Federal Property.

In the end of February, 2009, Sergey Ivanov, the Vice Prime Minister, spoke at the Government Hour at the State Duma and sounded intentions of the state to devote RUR 2.1 bln. to the United Shipbuilding Corporation for implementation of projects on leasing home-produced sea- and river-going ships in 2009. The Vice Prime Minister noted that in the end of 2008, RUR 1.8 bln. were allocated for the development of leasing in the national shipbuilding industry.

All in all, in view of supports to the transport industry in the context of the global financial crisis offered by the Government of the Russian Federation, proactive use of the leasing can be expected in implementation of scale projects for upgrading Russian sea and river fleet.

 
 
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