The Financial Regulatory Authority (FRA) has amended rules governing foreign-currency financing for factoring and financial leasing companies, allowing greater flexibility in financing transactions and expanding permitted sources of funding. The FRA Board, chaired by Islam Azzam, approved amendments to regulations issued under Decision No.
318 of 2025 to address practical issues that emerged after the rules came into effect. Under the revised regulations, foreign-currency financing will be permitted for sale-and-leaseback transactions used to finance imports, purchase assets, or settle foreign-currency obligations related to a client's business.
The measure covers financial leasing and financing for small and medium-sized enterprises. Foreign-currency financing will also remain available for import transactions related to a client's business, provided the transactions are supported by documentary credits or other documents confirming their completion.
Clients operating in free zones are exempt from this requirement. The FRA also eased requirements for international factoring. For non-recourse factoring, banks, insurers, venture capital firms, foreign financing institutions or other entities approved by the FRA may replace the correspondent factor to protect the rights of the parties involved.
The amendments also expand the sources of foreign-currency funding available to factoring, financial leasing and SME financing companies. Firms may obtain loans from shareholders, subsidiaries or affiliated companies, in addition to their own resources, banks and approved foreign financing institutions.
Azzam said the changes are intended to provide greater flexibility for factoring and financial leasing companies while maintaining effective oversight and protecting the rights of all parties. He added that the amendments respond to practical challenges identified since the previous regulations took effect earlier this year.
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