| Companies | Operations Accounting | Operations |
Leasing products exist in Egypt since May 1995 and has been created
by the Law 95.
NEW! 
This law has just been amended on 10th of May 2001 and now authorizes
companies to finance vehicles for transportation of passengers like all types of bus or personal car.
The rest of the law has not been modified and can be summarized by the three following figures: |
Leasing companies, regrouped in an informal Association, respect the following
characteristics: |
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Leasing companies are considered as commercial entities |
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Operations are not submitted to the International Accounting
Standard |
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Operations do not appear in the financial statements of the
lessee, neither assets nor liabilities |
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Rentals are considered as expenses and are fully deductible
from the taxable profit |
|
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The leasing company (the lessor) buys the property chosen
by the end user (the lessee) |
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The lessor rents the property to the lessee during a certain
period, in general between 1 to 5 years (up till 7 years for real estate
leasing) |
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The lessee pays rentals as agreed in the leasing contract
(monthly, quarterly, half-yearly...) |
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The rentals can be fixed or variable |
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The rentals can be in EGP or foreign currencies |
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At the end of the contract the lessee can buy the equipment
for the residual value mentioned in the contract |
| |
(ranging 1 EGP up till 10 % of the initial amount) |
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