"Financial leasing" as an economic developmenttool in Azerbaijan

This paper presents an overview of the financial leasing as a vital element for the economic development and due to lack of legislative regulation, necessity of adoption of new separate law of Azerbaijan in comparative models study. It starts with a study of the essence of financial leasing, mainly setting it in the context of difference with operating leasing and other types of leasing including accounting and taxation issues, as well as the legal nature of financial leasing contract. This scrutiny is a background for the following analysis of the scholars' opinions, international treaty framework and international best practices. Special attention is paid to the imperfect elements of national legislation and uncertainity of legal status on it and concrete offers in this field have been made for each section. Another focus of the paper are structural problems of the regulatory mechanism of leasing sector, in particular legal subjectivity of lessor and lessee, requirements for operations of leasing companies, as well as the purpose of financial leasing asset using comparative research method of different countries. All those analyses have been made per main structural elements of suggested draft law in the case of adoption of it. The main focus is made on the comprehensive assessment of factors affecting the development of leasing market, also substantiation of necessity of adoption of new law to enhance financial inclusion of SME's to financial markets, avoid imperfection of current leasing legislation stimulation of financial leasing activity while improving financial literacy. While analyzing such comprehensive issues, data collected from Central Bank and Ministry of Taxes of Azerbaijan and surveys and reports done by World Bank, ADB, IFC and other prominent organizations for Azerbaijani government have been used in Thesis. By this, Author aims to achieve showing how financial leasing is important for the economy, to substantiate the necessity of separate law on financial leasing while examining its main structural units theoretically and practically and ultimately to contribute further economic development of Azerbaijan. Keywords: financial leasing; necessity of separate law; comparative analysis; leasing market; financial inclusion.