Article 2 of the Saudi Finance Lease Law

The article has two paragraphs:

Paragraph 1: what counts as a finance lease contract. It is any contract in which the lessor leases fixed or movable assets, benefits, services or intangible rights, subject to two conditions together:

• The lessor is the owner of the asset, or the owner of its benefit, or able to acquire it, or able to build it.
• The lessor obtained the asset in order to lease it to others as a profession, that is, as an activity it carries on, not an occasional lease.

The article refers to the Regulations to clarify this. This is read with the definition of the lessor in Article 1 as the joint-stock company licensed to engage in finance leasing.

Paragraph 2: the lessee acquiring the asset. Ownership of the leased asset may pass to the lessee under the provisions of the contract, in one of the following forms:

• A condition making ownership depend on payment of the contract's installments.
• Payment of the installments together with a specified amount.
• A promise to sell for a nominal price.
• A promise to sell for a price agreed in the contract.
• A sale at the value of the asset at the time the sale contract is concluded.
• A gift.

All of this is without prejudice to the provisions on ownership of real estate by non-Saudis, which must still be observed where the asset is real estate and the lessee is not Saudi. Ownership is not an automatic result of every contract, but follows what the parties agreed, which is why Article 3 requires the contract to be drawn up in writing or electronically with its terms.