Finance Leasing Business

1. Finance Leasing Business

FINANCE LEASING BUSINESS

2. Overview

OVERVIEW
The acquisition of assets, specifically costly capital equipment
is a huge commitment for many businesses. The process for
acquiring the funds requires careful planning.
Instead of paying for the asset outright using cash, it
frequently makes sense for businesses to seek methods of
spreading the cost of acquiring an asset, to coincide with the
timing of the revenue generated by the business. The most
common sources of medium-term finance for investment in
capital assets are Hire Purchase and Leasing.
Leasing and hire purchase are financial facilities which allow
a business to use an asset over a fixed period, in return for
regular payments. The business customer selects the
equipment it needs and the finance company purchases it on
behalf of the business.

3.

4. Need for Finance Leasing

NEED FOR FINANCE LEASING
The Finance Leasing or 'full pay out lease' is closest to the hire
purchase alternative. The leasing company recovers the full cost of the
equipment, plus charges, over the period of the lease.
Although the business customer does not own the equipment, they
have most of the 'risks and rewards' associated with ownership. They
are responsible for maintaining and insuring the asset and must show
the leased asset on their balance sheet as a capital item.
When the lease period ends, the leasing company will generally agree
to a secondary lease period at significantly reduced payments.
Optionally, if the business wants to stop using the equipment, it can be
sold second-hand to an unrelated third party. The business arranges
the sale on behalf of the leasing company and acquires the bulk of the
sale proceeds.

5. Advantages of Leasing

ADVANTAGES OF LEASING
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The use of hire purchase or Leasing is a popular method of funding
the acquisition of capital assets. Although, these methods are not
necessarily optimal for every business or for every asset purchase.
There are a number of considerations to be made, as mentioned
below –
Certainty
Budgeting
Fixed Rate Finance
Impact of Security
Maximum Finance
Tax Advantages

6. Typical Labuan Leasing Structures

TYPICAL LABUAN LEASING STRUCTURES
Labuan Leasing Structure: [Foreign Co-asset Owner]
Benefits
Labuan Leasing Company is taxed at 3% of net audited profits
No Withholding Tax on lease rental received from Malaysian customers
No Withholding Tax on lease rental payable by Labuan Leasing Company to
Foreign Company
Access to more than 70 Malaysia Tax Treaty partners to reduce Withholding Tax
on lease rental received by Labuan Leasing Company from Foreign Customers
Liberal exchange control environment in Labuan
Labuan Leasing Structure: [Foreign Financier]
Benefits
Labuan Leasing Company is taxed at 3% of net audited profits
No Withholding Tax on lease rental received from Malaysian Customers
No Withholding Tax on interest payment payable by Labuan Leasing Company to
Foreign Financier

7. Tax Advantages of Labuan Leasing Company

TAX ADVANTAGES OF LABUAN LEASING
COMPANY
3% corporate tax on net audited profits
No withholding tax on dividends, interest, technical fee and royalty /
lease rental
No stamp duty on all instruments including share transfers
No import duty / sales tax
No foreign exchange controls
No capital gain tax and inheritance tax
Enjoy Malaysia’s Double Tax Agreements with over 70 countries
50% personal tax exemption for expatriate professionals employed by
the leasing company
100% tax exemption for director’s fees received by non-citizen
directors
To understand the Leasing Process in Labuan, contact the QX Trust team
advisers at +60 39212 6940 or [email protected] for a free
consultation.

8. For More Information Contact Here

FOR MORE INFORMATION CONTACT HERE
CONTACT US :- +60 3 9212 6940
VISIT HERE: https://www.offshore-labuan.com/
ADDRESS:- Unit No. 3A-16, Level 3A
Labuan Times Square,
87000 F.T. Labuan, Malaysia