Unlike an outbound purchase transaction, however, because the tenant does not present the committed balance as a debt, issues payments as an expense, and retains the title of the device. During the term of the lease, the finance company is considered the rightful owner of the asset. As under the repealed law, unless otherwise stipulated, the contract is deemed terminated at the end of its term and in the event of bankruptcy, death or loss of the legal capacity of the owner. The parties may agree to extend the term of the lease three months before the end of its term. The case of an unsuccessful enforcement procedure against the tenant is no longer retained as a ground for termination. On the other hand, Law No. 6361 stipulates that the lessee may terminate the contract before its term if the lessee or his company to which the leased property is transferred is in the process of liquidation. This is a complex issue, and each asset investment must be considered individually to determine what type of funding is most beneficial to the organization. However, there are two important considerations; the nature and life of the asset and how the leased asset is reflected in the organization`s accounts.

The Financial Leasing Act (72(I)/2016 (the “Law”) entered into force in Cyprus on 28 April 2016 with another Financial Leasing Directive (the “Directive”) adopted by the Central Bank of Cyprus on 17 February 2017. The objective of this legislation is to establish a regulatory and supervisory framework for the operation of leasing companies that provide leasing services to the public.