February 10, 2005, Baku, Azerbaijan
-- The Cabinet of Ministers of the Azerbaijan Republic has exempted value
added tax and custom duties on majority of imported leased
assets, a move that is expected to increase the volume of lease finance
in the country. By adopting the exemption decrees, Azerbaijan has
created new incentives to support its rapidly growing leasing industry.
These legislative changes were advocated and developed by the International
Finance Corporation through its Leasing Development Project which was generously
financed by The State Secretariat for Economic Affairs (seco), with support
from Azerbaijan’s Ministry of Economic Development. IFC had identified
the need for reforms to further boost the leasing sector and developed
draft of legislation changes that was submitted to the government authorities.
In 2004, over $7 million worth of equipment was leased to Azerbaijan’s
private sector through local financial institutions. During the year, the
total capital of the leasing companies more than doubled, reaching $2.5
million. As a result of reforms in leasing legislation and the IFC’s consultations
and trainings on leasing practices, the number of leasing companies has
increased from 3 to 7 with 8 more companies in the registration process
IFC (http://www.ifc.org) is the private sector arm of the World Bank Group.
Its mission is to promote sustainable private sector investment in
emerging economies, helping to reduce poverty and improve people’s lives.
IFC finances private sector investments in emerging economies, mobilizes
capital in the international financial markets, helps clients improve social
and environmental sustainability, and provides technical assistance and
advice to governments and businesses. From its founding in 1956 through
FY04, IFC has committed more than $44 billion of its own funds and arranged
$23 billion in syndications for 3,143 companies in 140 developing countries.
IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its
own account and $5.5 billion held for participants in loan syndications.
The State Secretariat for Economic Affairs (seco) represents Switzerland
in multilateral trade organizations and international negotiations. It
is also involved in efforts to reduce poverty and help developing countries
with transition economies build a sustainable democratic society and viable
market economy. Each year Switzerland spends about 1.7 billion Swiss francs
on economic development and transition assistance to developing countries.