Leasing, also known as financial leasing, is a contract through which an entity (lessor) allows another person or company (lessee) to use an asset for a specified period in exchange for regular payments. The lessor owns the asset and leases it to the lessee for their use in exchange for receiving regular payments.

Fátima Rivera, an associate lawyer at Torres Legal, states that leasing is commonly used in the business field to acquire high-value assets such as industrial equipment, machinery, vehicles, or even real estate. “The lessee has the right to use and enjoy the leased asset for the agreed-upon term, assuming the responsibility for its maintenance and care,” explains our Corporate Department lawyer.

One of the distinctive features of leasing is that, at the end of the contract, the lessee has the option to purchase the asset by paying a predetermined additional amount, known as the residual value. According to Rivera, this purchase option at the end of the contract gives the lessee the opportunity to use the asset for the agreed term and then decide whether they want to acquire it permanently or not.

“Leasing offers several advantages for both the lessor and the lessee. For the lessee, it allows them to use assets without incurring a significant initial expenditure, as payments are made over time,” says Rivera. Additionally, our specialist mentions that the lessee can benefit from certain tax and financial advantages, such as the ability to deduct leasing payments as operating expenses.

“On the other hand, the lessor receives regular income from leasing the asset and can recover the investment made in it. Furthermore, they retain ownership of the asset, which gives them the option to lease it to other clients at the end of the contract with the initial lessee,” our expert assures.

Rivera also points out that leasing is a financial lease contract that allows a company or an individual to use an asset in exchange for periodic payments over a specified period: “It is a flexible and attractive option for acquiring high-value assets without making a significant initial investment”.