theLeaseBlog - Leasing Jobs

In order to compete with global companies, Ukrainian manufacture requires modernization. The amortization of basic funds constitutes up to 87%. Throughout Ukraine, the volume of investments aiming at the renewal of the exhausted basic funds constitutes, according to different estimations, from $90 up to $106 bln; besides, from $36.8 bln to $48 bln are to be directed to various branches of industry (c. $19.4 bln to the manufacturing industry, $10.5 bln to the energy industry, and $ 5.5 bln to the extractive branch). The critical investment volume (equipment depraciation – c. 90%) is estimated at $16 bln.

The main source of purchasing equipment is usually represented by the enterprises’ proprietory funds. But the insufficiency of internal resources may badly restrain the enterprises’ growth and development. Moreover, from the point of view of corporate financing, it is often non-profitable to finance one’s development fully or mainly by means of one’s own capital. And for the country’s small and medium-sized enterprizes and enterpreneurs, the development by means of their own capital is even more unattainable. Thus, it is necessary to involve external investment sources. One of the effective ways to involve investment sources is represented by leasing. Well-developed leasing relations with reliable companies may provide support and become a stable investment source.

All over the world, the leasing mechanism plays an important part in stimulating the investment involvement for purchasing new production facilities and renewing the existing ones. In the OECD member countries, leasing constitutes 15-30% of all investments into basic funds, and in the developing countries, up to 15%. The value of leasing as a financial instrument is especially sizable in the economy of the developing countries and of the transitive economy states.

In the recent years, after the EC-Ukraine Contract of Partnership and Co-Operation came into force, numerous steps have been made in the direction of approximating the Ukrainian indirect taxation and enterprise tax legislation to the norms and standards of the EU Taxation Law. In the domain of indirect taxation, the main demands of the basic EU normative acts are considered, namely the 77/388/ ЄЕС Council’s Sixth Directive on the common value-added tax system and the 92/12/ ЄЕС Council’s Directive on the general system of preservation, sales and monitoring on excisable goods. The existing enterprize taxation system meets the EU demands concerning the definition of the taxpayer, tax base, tax jurisdiction etc. The planned legislation changes will further favor the development of leasing in Ukraine.

The lease market in Ukraine is now developing at a quick pace, reaching a third of the yearly growth. Due to the leasing companies operation, a number of national enterpri s es have obtained an opportunity to carry out large-scale investment projects. In the last years, the awareness level of potential clients concerning the main advantages of leasing operations has risen from almost 0 to a certain knowledge.

LEASE AGREEMENT DYNAMICS

l - value of the conluded lease agreements

Leasing resolves the most complicated and important problems confronted by the Ukrainian companies, i.e. insufficiency, a high rate of equipment deterioration, and complications with the renewal of the enterpri s es’s production facilities. In the present situation, leasing is a link between financial institutions and manufacturers.

The demand for leasing rewards its proposal, which is first and foremost witnessed by the increasing number of leasing companies, and thereby favors competitive contest, the greatest driver of market economy. The establishment of leasing companies takes place in the conditions of a fast market growth, and for the creation and enforcement of the companies’ competitive advantages, the strategic and tactic marketing is required. A leasing company becomes a partner of the client interested only in the success of their business and not restricting their activities to simple credit and serving the contract.

Who is there in the Ukrainian lease market? Leasing companies with the state share are UKRAHROLIZYNH, UKRTRANSLIZYNH, UKRHOSLIZYNH. Bank affiliate companies are represented by UKREKSYMLIZYNH (UKREKSIMBANK), UKRAINIAN LEASING COMPANY (UKRSYBBANK), LASKA LIZYNH (the Latvian PAREKS BANK), ADL AUTOMOTIVE and SG EGUIPMENT FINANCE UKRAINE (the French SOCIETE GENERALE), AZHIO-LIZYNH (AZHIO BANK), ARMA-LIZYNH (ARMABANK), NADRA-SERVIS (NADRA BANK), UKRINKOMLIZ (KREDYTPROMBANK), DIAMANTBANK,KHFB, INDEKS-BANK – these are banks dealing with financial leasing directly. Independent national leasing companies include the EUROFINANCE company, as well as the FIRST WESTERN-UKRAINIAN LEASING COMPANY, ATON-XXI, LIZUNH-MARKET, UKRAINIAN FINANCIAL LEASING COMPANY. Leasing companies with foreign capital are also in the process of dynamic development. These are OPTYMA-LIZUNH (the German SIXT), the German DUAL. Others are the companies founded by manufacturers (distributors), a.e. BOHDAN-LIZYNH, YEVRO-LIZYNH (YEVROKAR), ILTA (PEUGEUT), SCANIA KREDYT UKRAYINA.

The majority of companies are supported by the project Development of Leasing in Ukraine started in 2004 and financed by the government of the Netherlands.

EUROFINANCE is the most dynamic company in this market. It is a national company operating at international standards and realizing the progressive service technologies in the domain of automotive leasing throughout Ukraine. EUROFINANCE was founded by the FINKOM Financial Fund belonging to one of Ukraine’s largest financial groups with the sum of total assets exceeding $1 bln. EUROFINANCE’s own capital constitutes over $3 mln, which turns it into one of the strongest leasing companies in the market, with the largest registered capital. Within the structure of EUROFINANCE based on the leasing type, 60% belong to financial and 40% to operating lease; according to the products, 52% are taken by the net lease, whereas 48% go to service lease.

EUROFINANCE PORTFOLIO STRUCTURE

l commercial trucks

l buses

l light vehicles

The EUROFINANCE company is managed by a team with a work experience in the leading European leasing companies (VOLVO FINANCE, FIAT LEASING, DAIMLER CHRYSLER SERVICES, BUSINESS LEASE). The company management is also assisted by local professionals highly experienced in the Ukrainian lease market and in providing service to authoritative corporate clients.