Import Lease Homework Help

Import Lease

In an import lease, the lessor and the lessee are domiciled in the same country but the equipment supplier is located in a different country. The lessor imports the asset and leases it to the lessee.

Cross-Border Lease

When the lessor and the lessee are domiciled in different countries. the lease is classified as cross border lease the domicile or the supplier is immaterial.

Operationally the domestic and international leases are differentiated on the basis of risk. The latter type of lease transaction is affected by two additional risk factors, that is country risk and currency risk. The country risk arises from the need to structure the lease transaction in the light of an understanding of the political and economic climate and a knowledge of the tax and regulatory environment governing them in the foreign countries concerned, the payment to the supplier and the lease rentals are denominated in different currencies, any variation in the exchange rate will involve currency risk.

Posted by: andy

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