Brazil
At CIT Latin America, Brazil, we have been offering tailor-made financial solutions since 1997. We can structure both large and small deals in U.S. dollars, Euros or the local currency, depending on our clients' needs.
As a client or vendor of CIT Latin America, Brazil, you have access to a wide range of financial products, such as:
Operating Lease
The operating lease allows the customer the "use" of the equipment during a determined period, without having the obligation to purchase it, making the process of technological refreshment easier. Under this figure, the customer transfers 100% of the risk of technological obsolescence and all the costs of this process to CIT. At the end of lease, the customer has three different alternatives:
- return the equipment and make a technological refresh,
- renew the contract with the same equipment for the term of their convenience (payments in most cases reduce depending on the term of the renewal), or
- buy the equipment at fair market value.
Cross Border Lease
This type of lease is a contract in U.S. dollars, with the main characteristic being that the customer and the leasing company are in different countries with different legal systems.
This type of purchase option is managed and usually is 1 percent and, once cancelled, allows the customer to have the property of the equipment.
Another method of gaining tax benefits is to make the operation concerning equipment considered a capital benefit—one in which the government allows making a temporary importation and lets the customer pay the tax and duties during the term of the contract with no interest charge. Terms are from three to five years.
Finance Lease
A Finance Lease is a contract in which a company gives the customer the right to rent the equipment with the term and conditions defined for both parties. The customer could buy the equipment using a purchase option, as defined in the contract.
The most important difference between a Finance Lease and an Operating Lease is that the Finance Lease has a defined purchase option in the contract that usually is 1 percent. The Operating Lease allows the customer to buy the equipment, but the purchase option will be defined by the Fair Market Value at the end of lease. The law does not allow an Operating Lease to determine the purchase option at the beginning of the lease.
There are also some tax differences between Operating and Finance Leases. In general terms, in Operating Leases, the full amount of rentals are tax deductible. In Finance Leases, this is not always the case. If you need further information about tax-related issues, please contact us.