Financial leasing is a powerful financial instrument used by businesses to acquire assets without the burden of upfront payments. In Turkey, the regulation of financial leasing is designed to support capital investment and corporate growth. In this article, our Turkish Law Firm—ER&GUN&ER—explains the legal foundation, procedures, and key types of financial leasing available in Turkey. Our Istanbul Lawyer Firm offers specialized legal support to clients navigating leasing agreements and compliance.
What is Financial Leasing in Turkey?
Financial leasing ("finansal kiralama") in Turkey refers to a transaction in which the lessee acquires the right to use an asset owned by the leasing company. Ownership is transferred to the lessee at the end of the lease term, provided all payments are completed. This system allows companies to access expensive equipment and machinery while preserving working capital for other operations.
Typically, the lessee selects the asset and supplier, negotiates terms, and submits the request to a leasing company. Upon approval, the leasing company acquires the asset and leases it to the tenant under predefined conditions. This structure is ideal for businesses expanding their operations or managing cash flow efficiently.
Legal Framework for Financial Leasing in Turkey
Turkey’s legal structure for financial leasing is based on:
- Law No. 6361 - The Law on Financial Leasing, Factoring and Financing Companies (enacted in 2012)
- Supersedes the original Financial Leasing Law No. 3226 from 1985
This law governs licensing, operational principles, contract structures, and cross-border leasing transactions. Companies involved in financial leasing must comply with corporate law and contract law, which is why working with a Turkish lawyer is essential.
Types of Financial Leasing
1. Operating Lease
Under an operating lease, the lessee uses the asset for a limited term without obtaining ownership. This structure provides flexibility, especially when the asset is only needed temporarily. Maintenance responsibilities often lie with the lessor. In Turkey, this model is recognized but less commonly used.
2. Financial Lease
In a financial lease, the lessee makes fixed payments and obtains full ownership at the end of the lease term. This is the most widely used structure in Turkey and is favored for long-term capital investments. It provides asset security and better cost predictability for businesses.
Advantages of Financial Leasing in Turkey
- Preserves Working Capital: Leasing allows asset acquisition without upfront payment.
- Enables Expansion: Businesses can lease multiple assets simultaneously.
- Tax Efficiency: Lease payments may be deductible as expenses.
- Cost Control: Inflation may erode the real value of fixed lease payments.
Disadvantages of Financial Leasing
- Higher Total Cost: Long-term payments may exceed the asset’s purchase value.
- Contractual Restrictions: Terms may limit operational flexibility or impose penalties for early termination.
Legal Requirements for Lease Agreements
Any legal or natural person, including freelancers and companies, can enter into a financial leasing agreement. The leased asset must be independently usable and depreciable. A Turkish contract lawyer can help ensure the lease is legally binding and structured for the lessee’s benefit.
Cross-Border Leasing Regulations
Cross-border leases involving foreign leasing companies are regulated by the 2013 Circular on the Registration of Financial Lease Contracts. Turkish companies must register these contracts and comply with reporting obligations. Our experienced English-speaking lawyers in Turkey assist with the full process.
For tailored legal assistance in financial leasing transactions in Turkey, contact ER&GUN&ER Turkish Law Firm—your trusted Istanbul Lawyer Firm for commercial leasing and finance law.
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