bulgarian leasing market developments and prospects l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Bulgarian Leasing Market Developments and Prospects PowerPoint Presentation
Download Presentation
Bulgarian Leasing Market Developments and Prospects

Loading in 2 Seconds...

play fullscreen
1 / 19

Bulgarian Leasing Market Developments and Prospects - PowerPoint PPT Presentation


  • 192 Views
  • Uploaded on

Bulgarian Leasing Market Developments and Prospects. A presentation by Teodor Marinov, Co-chairman of Bulgarian Association for Leasing. Historic background – stages, milestones . Until 1989 - the Bulgarleasing era

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Bulgarian Leasing Market Developments and Prospects' - bellona


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
bulgarian leasing market developments and prospects

Bulgarian Leasing MarketDevelopments and Prospects

A presentation by Teodor Marinov, Co-chairman of Bulgarian Association for Leasing

historic background stages milestones
Historic background – stages, milestones
  • Until 1989 - the Bulgarleasing era
  • 1990 - 1992 - start of transition to free market economy, establishment of the first private leasing companies
  • 1993 - 1995 - small car leasing companies gather momentum
  • 1996 - banking sector crisis, lack of refinancing and numerous bankruptcies
  • 1997 - 2000 - first international players enter the market
  • 2001 - rapid expansion phase starts
  • 2002 - two leasing associations established
  • 2003 - mass penetration by international banking groups starts
  • 2005 - BNB commenced collecting and publishing leasing statistics
  • 2006 - BAL established upon merger of the two leasing associations
  • 2007 - Entry into the EU
measuring market growth specifics
Measuring market growth - specifics
  • BNB data available from 2005
    • Changes in sample
    • New business measured by financed amounts
  • BAL data:
    • Principles of surveys
    • Sample
  • The combined approach:
    • BNB data used for outstanding
    • BAL data used for volumes
slide4
Leasing market size, determined by outstanding net lease receivables at the end of the period (in EUR mln)

Source:

2001 – 2004 - BAL data

2005 – 2007 - BNB data, for 2005 and 2006 historic figures used

share of machinery and industrial equipment in the part new business international comparison
Share of machinery and industrial equipment in the part ”new business” - international comparison

Source: Data from market survey of Leaseurope for 2006

bulgaria leasing penetration ratio
BULGARIALeasing penetration ratio

Source: BAL for New bisuness, NSI for Investments

ratio of leasing penetration international comparison
Ratio of leasing penetration- international comparison

Sources: Data from market survey of Leaseurope for 2006, country statistics

bulgaria ratio of net lease receivables to gdp
BULGARIARatio of net lease receivables to GDP

Source: BAL for New bisuness, NSI for GDP

ratio of net lease receivables to gdp i nternational comparison
Ratio of net lease receivables to GDP International comparison

Sources: Data from market survey of Leaseurope for 2006

legal framework for leasing
Legal Framework for leasing
  • No special leasing law. Main laws defining leasing activity are: Commercial Code, Law on Contracts, Accounting Law
  • Leasing companies are not protected by Law from supplier default
  • No restrictions on tenor, type of asset and amount
  • Contracts are registered with Central Pledge Registry. Registration is a base for issuance of repossession writ of execution through out-of-court procedure. There is mixed experience in using of this procedure
  • A certain practice among lessors is the notary endorsement of lease contracts. Such endorsement is used for obtaining of writ of execution for collection of the overdue amounts under out-of-court procedure. Unfortunately, experience in applying of such procedure is mixed
  • While overall legal framework is adequate, there is much room for improvement in implementation
slide14
NONE

ACCOUNTING AND TAX ADVANTAGES OF FINANCIAL LEASES

accounting and profit taxation for leasing
Accounting and profit taxation for leasing

Taxation of financial and operating leases is based on accounting profits

Companies may choose reporting standard between National Accounting Standards (NAS) and IFRS

NAS converge towards IFRS (economic treatment of leasing transactions)

vat taxation for leasing in bulgaria
VAT taxation for leasing in Bulgaria
  • Bulgaria introduced VAT in 1994
  • VAT Law changed dramatically in 2007, reflecting EC’s 6th directive
  • The General rate of 20% applies to capital payments under financial leases and rentals under operating leases
  • Lessor may choose whether to charge VAT on interest;
  • Right to VAT refund to lessees is allowed under the same criteria as if they were to acquire the asset
  • There is special VAT refund regime for cars, depending on number of seats
  • VAT is due upon delivery (close-end leases) or at installment (open-end leases)
  • VAT refund period grew substantially upon EU accession
bulgarian leasing market challenges ahead
Bulgarian leasing market: Challenges ahead
  • Macroeconomic impacts
  • Country risk and cost of funds – implication of the sub-prime lending crisis
  • Liquidity impact – limited on banking groups, stronger on captives and severe on independents
  • Eligibility for EU funded projects:
    • Regional Competitiveness and Employment
    • Program for development of the rural areas
  • BASEL II – impact at Group level, implications on re-financing
  • Maturing (?)