How many types are there for leasing contracts and what are the differences between them?

Leasing contracts are classified into two types: (1) Operating Leases; and (2) Financial Leases. Under an Operating Lease, the lessee books monthly payments as “Rent”; also, the equipment owner is not the lessee. Even upon contract termination, the lessee does not intend to purchase the equipment, or transfer the equipment ownership to them. As for the Financial Lease, the lessee books the leased equipment as their “asset” and depreciation is calculated from the first day of contract.

Are land and buildings required as collateral against the financing transaction?

Equipment under financing will be used as collateral; therefore, there is no requirement for land and buildings.

Is imported equipment eligible for leasing?

Imported equipment is eligible for leasing, including

  • Equipment imported by a vendor
  • Equipment imported by the customer
What terms are offered for leasing and hire purchase contracts?

Leasing term is 3-5 years and hire purchase term is 1-5 years.

What tax benefits are available for leasing?

Monthly rental payments are 100% tax-deductible expenses.

Further inquiries? Call us at

K F&E 02-2902900