The study in this thesis concerns the leasing business in Thailand featuring the historical background, characteristics, establishment, operating problems and its role in the nation's economic development. It is aimed to serve as a guideline which is expected to be beneficial to all concerned and to show the importance of leasing business towards industrial development. Since the leasing business is relatively new in Thailand, even though it has been in existence in Thailand since 1978, it is still not fully understood by most people. This thesis is to study the operations of leasing companies that act as financial media between the producers or their sole agents and the users who need machinery and necessary equipment in order to run their business. Generally speaking, leasing is a kind of long-term contract to lease machinery and equipments. The lessee (hirer) is free to choose any machinery or equipments and the seller as he wish. The lessee's purpose is to lease for a long term period for use instead of being the owner. When the lease contract expires the parties have choices either to renew the lease or decide to make the purchase. The leasing company will invest and become the owner of that property throughout the period of contract. The agreed payment is normally made by installment in the form of rent. The rent is simply calculated from the cost of that property and the benefit from which leasing company will gain. The leasing business is the business of financially service. In Thailand, it is considered as a commercial activity and it is required to register with the “Commercial Registration Department” of the Ministry of Commerce. Many companies registered their names with the word “leasing” but in fact there are only 3 companies actually operate the leasing business. The agreement between leasing company and the lessee will be in the form of rental contract for 3 to 5 years. The lessee also has to purchase the property at the end of the contract. The operation of the leasing business in Thailand still encounter many problems because leasing is still not fully understood and exploited as a financial instrument. Most businessmen still believe in the ownership of property and hire-purchase is more familiar to them. One of the reasons for slow development of leasing in Thailand is undoubtedly the absence of laws and regulations permitting one to operate in such business with sufficient certitude. Another reason is the lack of favorable taxation on leasing in comparison both with bank loans as well as with hire-purchase. The impact of economic stagnation has badly effected the growth of leasing since the lessee is more carefully screened. This business will expand more if it can provide a good service to serve a customer satisfaction with a reasonable charge and also government should have a clear policy and law to control and support it, this will create a confidence for a one who runs this business and the others who want to invest too.
