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Sunday, 18 February, 2018
About BTA
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Lebanon Overview
Lebanon is situated in a strategic geographical location: at the heart of the Middle East and the crossroads of three continents: Africa, Europe and Asia; Lebanon has long been the convergence point of trade routes and the meeting place for a wide variety of people, the basis of today’s uniquely diverse and rich national culture Lebanon offers the most liberal investment climate in the Middle East backed by a free market economy, a long tradition of free trade regime,a sophisticated banking system, a developed legal framework, a superbly skilled workforce, and an exceptional lifestyle. Lebanon offers a large number of investment opportunities in all sectors of the Lebanese national economy and more specifically in the Tourism and Agro-food industries, Light & Medium industries, Agriculture, Health, Telecommunications, Energy, Environment, Transportation, and Information Technology sectors.
The government has shown commitment to protect economic competitiveness and has implemented a number of structural reforms to further stimulate growth and investments. These reforms have been attractive to foreign investments.
New policies have been adopted, and modern laws have been promulgated such as:
- Foreign Acquisition of Property law that facilitates and streamlines the acquisition of real estate by foreigners.
- The implementation of the Investment Law and the establishment of The Investment Development Authority of Lebanon (IDAL).
- Customs Law that facilitates import and export procedures.
- Reduction of Customs Duties on almost all imports and especially raw material, equipment destined for industrial use, and IT-related products.
Why Lebanon? 10 Reasons to Invest in Lebanon
There are many advantages of investing in Lebanon that can be summarized as follows:

1- Free Market Economy: Lebanon offers the most liberal investment climate in the Middle East and is ranked as one of the freest economy regionally and internationally, with the Government maintaining a non‐interventionist stance toward private investments.

2- Liberal Financial Environment: Lebanon is known for its liberal financial environment with a free exchange regime, full currency convertibility policies and absence of restricted flows of capital, remittances or dividends.

3- Banking Secrecy: Lebanon had a long tradition of banking confidentiality and privacy officially codified in the Banking Secrecy Law. In 2002, the traditional banking secrecy law in Lebanon has, been amended to empower the Special Investigation Committee (SIC) to lift bank secrecy and investigate suspicious transactions to ensure compliance with anti money laundering law.

4- Attractive corporate taxation and Fiscal Incentives: Lebanon has one of the most favorable taxation schemes and fiscal incentives worldwide.

5- Non-Discriminatory and Efficient Legal Framework: Lebanon provides Protection of private property and right and equality between the Lebanese and Non Lebanese.

6- Strategic Location: A strategic geographical location as a transshipment point between a variety of Arab countries and overseas.

7- Labor Cost: Lebanon is recognised for the young, high skilled, educated and multilingual (Arabic, English and French) workforce.

8- Quality Health Care & High Education: Lebanon is internationally renowned for the quality of its hospitals and medical centers. The healthcare system is amongst the best performer amongst developed and emerging economies.

9- Rich History and Culture: Throughout history, Lebanon has been a contact centre between various cultures and civilizations, rendering it a highly cosmopolitan country.

10- High Quality of Life: Lebanon offers a wide variety of tourism attractions and activities all year round in natural scenery from beautiful beaches to mountains and valleys. With its ambiance of hospitality and warmth, Lebanon served as the business, cultural, academic and touristic center of the MENA.
Social Security Contribution
Law provisions concerning Social Security are imperative and do not allow to either the employers or the insured salaried persons to remain outside the scope of these provisions being considered of Public Policy.
Social Security Contributions are calculated as a percentage of monthly salaries, including all benefit up to a maximum wage of five times the official minimum wage. All companies are officially required to register with the NSSF within one month from the start of operations. New employees should be registered within 15 days of their employment.
In general, all Lebanese employees and workers, regardless of the nature of their employment, are subject to the Social Security provisions, provided their activities are conducted on Lebanese territory.
As for Foreigners working in Lebanon and holders of Work Permits, they are entitled to Social Security benefits, provided their countries of origin offer equal treatment to Lebanese workers.
Non-Resident foreigners and Lebanese are exempted from Social Security contributions if they are working in Lebanon pursuant to an Employment Contract concluded abroad with foreign Companies, and if their employer produces evidence that they are entitled to Social Security benefits in their country of residence at least equivalent to those offered in Lebanon.

Program Employee Contribution Employer Contribution
Sickness and Maternity 2% 7%
Family Allowance 0% 6%
End of Service Indemnity 0% 8.5%
Foreign Acquisition of Property
In 2001, the Parliament endorsed amendments on the legislation regarding the foreign acquisition of Property in Lebanon to provide incentives foreign investment through reactivating the real estate sector. The law stipulates the following:

- The new Law allows the foreigners to acquire 3% of the total area of Lebanon regardless the geographic location subject to one condition: foreigners can acquire no more than 3% of the total area of a caza. One exception to this law is Beirut, where foreigners are allowed to acquire up to 10% of the total area of the capital.
- Foreigners are now allowed to acquire up to 3,000m² without the need to a decree by the Council of Ministers. The Authorization to acquire a piece of land for a specific project has to be executed within a period of five years (extended once for a similar period). It is allowed to a foreigner to buy more than 3,000m² subject to a Council of Ministers’ decree.
Merchants
a. Qualifications:

i. The Merchant should have eighteen years and above to become a merchant and carry out commercial activities.
ii. The Merchant should carry out Commercial Activities.

b. Prohibited activities:

Some commercial activities are prohibited to Merchants by certain institutions or organizations such as banks.
Foreign Merchants are prohibited to carry out the activity of Commercial Representation.

c. Formation:

Registration in the Commercial Register within 1 Month from starting the business.

1. Information and Documents required:

• Full name, Place and Date of Birth of the Merchant with a copy of the ID or Passport.
• Commercial Name under which he is carrying out his business.
• Location of the Business along with the lease Agreement if any.
• The Activities forming the objectives of the Commerce.
• Full Name, Nationality, place and Date of Birth of all persons authorized to represent the Merchant.

2. Registration Procedures and Cost:

An Application should be presented to the Competent Commercial Register where the Business is located by the Merchant or his legal representative along with the documents required. Then the Merchant or his legal representative should pass by the Office of the Ministry of Finance to pay the Tax. Afterward, the Commercial Register will issue the relevant Judiciary Fees to be paid by the Merchant and will finalize the Registration procedures.

The Official Charges for the registration of a Merchant at the Commercial Register is estimated as follows:

- Financial Tax: LBP/750.000/ (Around USD/500/).
- Judicial Fees: LBP/375.000/ (Around USD/250/).
- Stamps: LBP/3000/ (Around USD/2/)
- POA Registration if any: LBP/100.000/ (Around USD/67/)
- Each Certified True Copy of the Registration Documents: LBP/2.000/.
Business Concern
The Business Concern is a legal Entity, not having a legal personality, comprising corporeal and incorporeal elements forming the core of the Business and which may be subject to diverse transactions.
Corporeal elements consist of goods, equipments, tools machines and furniture.
Incorporeal elements include trademarks, trade names, patents, copyrights, good will and customers.
These two elements may constitute the object of several transactions as a whole entity or separately such as sale, mortgage, garnishment, contribution in a partnership or a corporation, and independent free management. These transactions should be register at the Commercial Register.

a. Formation:

1. Information and Documents required:

• Full name, Place and Date of Birth of the Merchant with a copy of the ID or Passport.
• Commercial Name under which he is carrying out his business.
• Location of the Business along with the lease Agreement if any.
• A Discharge Document from the Social Security relevant for the Registration of a Business Concern.
• Registration Certificate as a Merchant.

2. Registration Procedures and Cost:

An Application should be presented to the Competent Commercial Register where the Business Concern is located by the Merchant or his legal representative along with the Documents required. Then the Merchant or his legal representative should pass by the Office of the Ministry of Finance to pay the Tax. Afterward, the Commercial Register will issue the relevant Judiciary Fees to be paid by the Merchant and will finalize the Registration procedures after the monitoring of the premises.

The Official Charges for the registration of a Business Concern at the Commercial Register is estimated as follows:

- Monitoring Fees: LBP/75.000/ (Around USD/50/).
- Financial Tax: LBP/750.000/ (Around USD/500/).
- Judicial Fees: LBP/375.000/ (Around USD/250/).
- Stamps: LBP/1.000/ (on each document).
- Financial Charge: LBP/2.000/ + LBP/250/ for each Document.
- POA Registration if any: LBP/100.000/ (Around USD/67/) .
- Each Certified True Copy of the Registration Documents: LBP/2000/.
Joint Partnerships
a. Definition and Main Characteristics:

The Commercial law in Lebanon provides that the Joint Partnership is one which operates under a specific name and is composed of two or more persons responsible jointly and severally liable for the company’s debts and obligations.

The main Characteristics of such Entity:

1- Joint liability: The Partners are jointly and serially liable for the debts of the partnership in their own individual funds and property should the partnership’s assets be insufficient to satisfy the Creditors.

2- Legal Status: Each partner is considered by Law a Merchant. Thus he should be legally entitled to carry out commercial activities as a Merchant. The bankruptcy of the partnership may result in the bankruptcy of the partners.

3- Intuitus Personae: The intuitus persona prevails in the relation between the partners. Thus, usually the shares may not be transferred to third parties except with the consent of all partners.

4- Capital: No minimum capital is required by law.

b. Formation:

The Partnership Agreement must be evidenced in a formal or informal deed signed by all partners but, in this latter case, it should be drafted in as many copies as the number of partners.
Within the month following the formation of the partnership, it should be registered in the relevant Commercial register.

1. Information and Documents required:

• Full name, nationality, Place and Date of Birth, and the domicile of each of the Partners along with a copy of their ID.
• The Commercial Name of the general Partnership.
• The object or purpose of the General Partnership.
• The amount of the capital and the value of contribution made by each partner.
• The name of the Authorized Signatory on behalf of the Company.
• The address of the registered office and the addresses of the branches if any.
• The date of formation of the General Partnership and its duration.

Any amendment on the status of the partnership should also be registered in the Commercial Register.

2. Registration Procedures and cost:

An Application should be submitted to the relevant Commercial Register along with the Articles of Association and the required documents after the payment of the Financial Tax within five date of the signature of the Articles of Association.

The Official Charges for the registration of a Joint Partnership at the Commercial Register is estimated as follows:

- Financial Tax: LBP/750.000/ (Around USD/500/) + 3/1000 of the capital amount to be paid at the Office of the Ministry of Finance.
- Judicial Fees: LBP/375.000/ (Around USD/250/) + 1.5/1000 of the Capital amount.
- BBA Fees: 1/1000 of the capital amount to be paid within the Notary Public Fees if any.
- POA registration: LBP/100.000/ (Around USD/67/).
- Stamps: LBP/4.000/ (on the Application).
- Financial Charge: LBP/2.000/ + LBP/250/ for each Document.
- Each Certified True Copy of the Registration Documents: LBP/2000/.
Limited Partnership
a. Definition:

A Limited Partnership carrying out its business under a trade name, It is similar to the Joint Partnership but comprises two groups of Partners:

- The Active Partners who have the exclusive right to conduct business and are jointly and severally liable for the partnership’s debts.
- The Silent Partner whose role is limited to providing the necessary funds and are liable to the extent of their shares in these funds. The Trade name should include only the names of the active partners. The Limited Partnership consists of at least one Active Partner with full liability and one or more silent partners.

b. Formation:

The formation of a Limited Partnership is governed by the same rules and procedures governing the Joint Partnership as described above.
Limited Liability Company (s.a.r.l.)
a. Definition and main characteristics:

A Limited Liability Company (s.a.r.l) combines traits from both a partnership and a corporation. It is governed by Decree No. 35 dated 05/07/1967. The main Characteristics of such Entity:

1- Limited liability: The Partners are liable only to the extent of their shares in the capital.

2- Legal Status: The Partners are not considered Merchants. Thus no special capacity is required.

3- Intuitus Personae: The person of the partners is of prime importance and is taken into consideration in the formation of the Company. Therefore the parts are not negotiable and cannot be transferred by one partner to third parties without the consent of a special majority of the other partners. Public Subscription to the parts is strictly prohibited.

4- Capital: Minimum Capital LBP/5.000.000/ (Around USD/3,334/) wholly paid on formation and deposited in an approved bank in the name of the company followed by the term “Under Formation”.

5- Number of Partners: the Minimum number of partners is three (3) and the maximum is twenty (20), except in the case of death and inheritance, when the number of partners may extend to a maximum of 30. If it exceeds that number, the company must register as a Joint Stock Company.

6- Foreigners: All partners may be foreigners; with the exception of companies seeking to engage in Commercial representation, in such case the foreigners’ shares should not exceed 50% of the capital. A foreign Manger of the company cannot be appointed except after obtaining a Work Permit in Lebanon.

7- Prohibited Activities: The object of an s.a.r.l may not include the following activities: Insurance, capitalization, savings, regular air transport, banking operations and the investment of funds for the account of third parties.

8- Appointment of an Attorney and Auditor: the Appointment of an Attorney and an Auditor is a must.

9- Management: the management of the Company shall be entrusted to one or more managers, not necessarily partners, appointed in the status or in a subsequent deed, for a limited or unlimited period provided they are physical persons.

10- Partners Meetings: 2 kinds of Partners meetings are available:

• Ordinary Partners Meetings to be held at least once per year within a period of 6 months as of the date of the closure of the financial year.
• Extraordinary Partners Meetings to be held for the purpose of modifying the Articles of Association.

11- Attendance and Resolution: each Partner may attend the meeting and participate in the voting process by a number of votes equal to the parts owned by him or represented by proxy.
The resolutions of the ordinary meetings are adopted by a simple majority vote of partners holding Fifty percent (50%) of the parts representing the capital of the Company.
Any amendment to the Articles of Association may be decided by a majority vote of partners representing three quarter of the capital.
Resolutions concerning the change of the company’s nationality, or compelling a partner to increase his contribution to the capital, or increasing his obligations may not be decided except by unanimous vote of the partners in an extraordinary General Meeting.

b. Formation:

The company is not considered finally formed unless the parts are allocated to the partners, the number of parts to each is determined and their value fully paid and the amounts deposited in a bank. The registration in the Commercial Register is a must.

1. Information and Documents required:

• The Articles of Association duly signed by the Partners before the Notary Public or the President of the Commercial Register.
• Full name, nationality, Place and Date of Birth, and the domicile of each of the Partners along with a copy of their ID.
• The Name of the Company.
• The object or purpose of the Company.
• The amount of the capital and the value of contribution made by each partner along with the Deposit Advise from the bank.
• The name of the Authorized Signatory on behalf of the Company.
• The address of the registered office and the addresses of the branches if any.
• The date of formation of the Company and its duration.

Any amendment on the status of the Company should also be registered in the Commercial Register.

2. Registration Procedures and cost:

An Application should be submitted to the relevant Commercial Register along with the Articles of Association and the required documents after the payment of the Financial Tax within five date of the signature of the Articles of Association.

The Official Charges for the registration of a Limited Liability Company at the Commercial Register is estimated as follows:

- Financial Tax: LBP/750.000/ (Around USD/500/) + 3/1000 of the capital amount to be paid at the Office of the Ministry of Finance.
- Judicial Fees: LBP/375.000/ (Around USD/250/) + 1.5/1000 of the Capital amount.
- BBA Fees: 1/1000 of the capital amount to be paid within the Notary Public Fees if any.
- POA registration: LBP/100.000/ (Around USD/67/).
- Stamps: LBP/4.000/ (on the Application).
- Financial Charge: LBP/2.000/ + LBP/250/ for each Document.
- Each Certified True Copy of the Registration Documents: LBP/2000/.
Joint Stock Company (s.a.l.)
a. Definition and Characteristics:

The Commercial law defines the Joint Stock Company as being a company composes by a number of persons subscribing in shares, who are liable for the debts of the Company only to the extent of their shares in the capital.

1- Limited liability: The Shareholders are liable only to the extent of their shares in the capital.

2- Legal Status: The Shareholders are not considered Merchants. Thus no special capacity is required.

3- Intuitus Pecuniare: The contributions of the shareholders prevail over the person of the shareholders themselves. Thus the shares are negotiable, In general any shareholder may transfer his shares without the consent of other shareholders. Shares are transferred by the simplified means of commerce. The shares can be registered, to order or bearer shares.

4- Capital: Minimum Capital LBP/30.000.000/ (Around USD/20.000/). All of the share capital should be subscribed to upon Company’s formation, but only 25% of capital must be paid up at the time of subscription. The remaining capital is payable as and when decided by the board of directors.

5- Number of Partners: the Minimum number of Shareholders is three (3), no maximum number.

6- Foreigners: All Shareholders may be foreigners; with the exception of companies seeking to engage in media, real estate, commercial representation, banks, financial institutions, leasing, management concession of a Public Service and insurance. The unlimited foreign participation principle is however mitigated by requirements that majority of the Board of Directors is Lebanese and each member of the board is holder of a limited number of shares.

7- Nationality: Irrespective of the percentage of share capital controlled by non-Lebanese investors, any corporation formed under Lebanese Law is, however, considered a Lebanese Corporation and must have its Head-Office in Lebanon.

8- Appointment of an Attorney and Auditor: the Appointment of an Attorney and an Auditor is a must. An additional Auditor shall be appointed by the Commercial Court. Banks and Financial corporations are exempted from external auditors appointed by the Commercial Court.

9- Administration: the Administration of the Company shall be entrusted to a Board of Directors composed of a minimum of three members and a maximum of twelve. Unless otherwise specified by law, the majority of directors must be Lebanese nationals. The board shall be presided by one of the Directors designated by the board; the Chairman may be a foreign national.

10- Company’s Structure:

• General Meetings of the Shareholders:

i. The constituent Assembly which is held once to confirm the Formation of the Company.

ii. The Ordinary General Meeting which is held at least once per year after closing of the Annual Accounts and may, under special circumstances, be convened once or more during the year provided the object of such meeting does not concern the amendment of the company’s statutes.

iii. The Extraordinary General Meeting shall deliberate on all prospective amendments of the statutes with the exclusion of changing the company’s nationality, increasing the range of liability of shareholders or affecting rights of third parties.

• The Board of Directors: The Board of Directors shall have the broadest powers to implement the resolutions of the General Meetings of shareholders, and to carry out all acts required for the smooth operation of the Company.

11- Publicity: Prior to any call for subscription addressed to the Public, the promoters shall have to insert a publication for this purpose in the Official Gazette and in two newspapers, one of which is a local daily paper and the other an economic paper, including their signatures, addresses, and all other relevant information namely, the name of the Company, its principle office, the location of its branches, its object, term, capital, the value of the allocations in kind, the fixed rate of interest, the mode of distribution of the dividends, the number of Directors, their remuneration and powers as provided for in the statutes.
In addition, the Company’s Annual Accounts, together with the names of its Board Members should be published in the Official Gazette and two other local publications.

b. Formation:

A Joint Stock Company shall be founded by, at least three founders. The first act to be done by the founders is the drafting of the Company’s Articles of Association. The founders of a Joint Stock Company shall start the formation procedures by depositing and registering the Articles of Association before a Notary Public and the registration at the Commercial Register upon the subscription of the whole capital of the Company.

1. Information and Documents required:

• The Articles of Association duly signed by the Partners before the Notary Public.
• Full name, nationality, Place and Date of Birth, and the domicile of each of shareholders along with a copy of their ID.
• The Name of the Company.
• The object or purpose of the Company.
• The minutes of Meeting of the Constituent Assembly Meeting.
• The minutes of the Meeting of the Board of Directors in which the Chairman was elected.
• The amount of the capital and the value of contribution made by each partner along with the Deposit Advise from the bank.
• The Commercial Circular showing the name and signature of the Authorized signatory.
• The address of the registered office and the addresses of the branches if any.
• The date of formation of the Company and its duration.

Any amendment on the status of the Company should also be registered in the Commercial Register.

2. Registration Procedures and cost:

An Application should be submitted to the relevant Commercial Register along with the Articles of Association and the required documents after the payment of the Financial Tax within five date of the signature of the Articles of Association.

The Official Charges for the registration of a Joint Stock Company at the Commercial Register is estimated as follows:

- Financial Tax: LBP/1.000.000/ (Around USD/667/) + 3/1000 of the capital amount to be paid at the Office of the Ministry of Finance.
- Judicial Fees: LBP/500.000/ (Around USD/334/).
- Official Fees: 5.5/1000 of the Capital Amount.
- BBA Fees: 1/1000 of the capital amount to be paid within the Notary Public Fees.
- POA registration: LBP/100.000/ (Around USD/67/).
- Stamps: LBP/4.000/ (on the Application).
- Each Certified True Copy of the Registration Documents: LBP/2000/.
Holding Companies
a. Definition and Characteristics:

The Holding Company in Lebanon was introduced by the legislative Decree No. 45 dated 24/06/1983.

The main characteristics of the Holding Company as defined by the said decree are as follows:

1. Legal Status: The Holding Company shall take the form of a Joint Stock Company and shall abide by the same law provisions governing this form of companies, with some exceptions to be described below.

2. Capital: Minimum Capital LBP/30.000.000/ (Around USD/20.000/), that can be deposited in foreign currency.

3. Number of Partners: the Minimum number of shareholders is three (3), no maximum number.

4. Object of the Company: the Object of the Company is restricted to the following:

i. Owning shares or parts in existing Lebanese or Foreign Joint Sock or Limited Liability Companies or participating in the formation thereof.

ii. Managing the Companies in which it owns shares or parts.

iii. Granting loans to these companies or guaranteeing loans towards third parties, for this purpose the Holding Company may borrow money from banks, issue bonds in accordance with Article 122 of the Code of Commerce, provided the issued debentures do not exceed in value, at any time, five folds its capital, including reserves, as evidenced in the last approved balance sheet. The Holding Company may not extend loans to companies operating in Lebanon in which its share in the Capital is less than twenty percent.

iv. Appropriation of patents, inventions, concessions, trademarks and other reserved rights and leasing same to enterprises located in Lebanon or abroad.

v. Owning movables and fixed assets provided they are strictly assigned for the purposes of its operations on condition that the Law concerning the acquisition of real estate by foreigners in Lebanon is duly observed.

5. Prohibited Activities: All activities which are not included in the object of the Company as detailed above.
The Holding Company may not have a Direct ownership in excess of 40% in more than 2 companies carrying on, in Lebanon, the same industrial commercial or non commercial activities should this ownership violate the prohibitions provided in the Anti-Trust Law.

6. Tax: the Holding Company has a Special Tax Treatment as described below.

7. Appointment of an Attorney and Auditor: the Appointment of an Attorney and an Auditor is a must. The Auditor should be residing in Lebanon and of Lebanese nationality. No additional Auditor shall be appointed by the Commercial Court.

8. Administration: the Administration of the Company shall be entrusted to a Board of Directors composed of a minimum of three members and a maximum of twelve. The Holding Company is exempted from the requirements of Lebanese Directors in the Board of Directors (As per the Law No. 772 dated 11/11/2006). If the Chairman of the Board is a foreign national, he does not require a Lebanese Work Permit, provided he does not actually reside in Lebanon.

9. Head Office: the Head Office of the Holding Company must be in Lebanon where the Legal records and documents should be kept.

10. Company’s Structure:

. General Meetings of the Shareholders:

i. The constituent Assembly which is held once to confirm the Formation of the Company.

ii. The Ordinary General Meeting which is held at least once per year in Lebanon after closing of the Annual Accounts and may, under special circumstances, be convened once or more during the year provided the object of such meeting does not concern the amendment of the company’s statutes.

iii. The Extraordinary General Meeting shall deliberate on all prospective amendments of the statutes with the exclusion of changing the company’s nationality, increasing the range of liability of shareholders or affecting rights of third parties.

ii. The Board of Directors: The Board of Directors shall have the broadest powers to implement the resolutions of the General Meetings of shareholders, and to carry out all acts required for the smooth operation of the Company. The meetings of the Board of Directors might be held abroad.

b. Formation:

The Holding Company is structured a formed like a Joint Stock Company. A special Register kept the Commercial Register in Beirut in which all Holding Companies should be registered.

1. Information and Documents required:

• The Articles of Association duly signed by the Partners before the Notary Public.
• Full name, nationality, Place and Date of Birth, and the domicile of each of shareholders along with a copy of their ID.
• The Name of the Company.
• The object or purpose of the Company as defined by Law.
• The minutes of Meeting of the Constituent Assembly Meeting.
• The minutes of the Meeting of the Board of Directors in which the Chairman was elected.
• The amount of the capital and the value of contribution made by each partner along with the Deposit Advise from the bank.
• The Commercial Circular showing the name and signature of the Authorized signatory.
• The address of the registered office and the addresses of the branches if any.
• The date of formation of the Company and its duration.

Any amendment on the status of the Company should also be registered in the Commercial Register.

2. Registration Procedures and cost:

An Application should be submitted to the Commercial Register in Beirut along with the Articles of Association and the required documents after the payment of the Financial Tax within five date of the signature of the Articles of Association.

The Official Charges for the registration of a Holding Company at the Commercial Register is estimated as follows:

- Financial Tax: LBP/1.000.000/ (Around USD/667/) + 3/1000 of the capital amount to be paid at the Office of the Ministry of Finance.
- Judicial Fees: LBP/500.000/ (Around USD/334/).
- Official Fees: 5.5/1000 of the Capital Amount.
- BBA Fees: 1/1000 of the capital amount to be paid within the Notary Public Fees.
- POA registration: LBP/100.000/ (Around USD/67/).
- Stamps: LBP/4.000/ (on the Application).
- Each Certified True Copy of the Registration Documents: LBP/2000/.
Offshore Companies
a. Definition and Main Characteristics:

The Offshore Company in Lebanon was introduced by the legislative Decree No. 46 dated 24/06/1983.

The main characteristics of the Offshore Company as defined by the said decree are as follows:

1. Legal Status: The Offshore Company shall take the form of a Joint Stock Company and shall abide by the same law provisions governing this form of companies, with some exceptions to be described below.

2. Capital: Minimum Capital LBP/30.000.000/ (Around USD/20.000/), that can be deposited in foreign currency.

3. Number of Partners: the Minimum number of shareholders is three (3), no maximum number.

4. Object of the Company: the Object of the Company is restricted to the following:

- To negotiate and execute contracts or agreements for operations and transaction performed outside Lebanon, which concern goods and products situated abroad or in Lebanon’s Customs Free Zones.
- Administrate companies and institutions carrying on exclusively their activities abroad and provide administrative, organizational, professional and IT services of all types for companies located abroad based on the requests of such companies.
- Tripartite or multipartite business operations carried on abroad. For such purposes, the offshore company may undertake any negotiations, sign agreements, consign goods, and re-issue invoices for operations and transactions outside Lebanon, or duty free zones in Lebanon or from the same, inclusive using any facilities available in the foregoing zones to store imported goods in view to re-export the same.
- Maritime freight Activities.
- Own shares, participations or bonds in non-resident companies and institutions; borrow non-resident institutions in which the offshore company posses more than 20% of their capital.
- Own or invest agency rights in goods, merchandises, or representations of foreign companies in foreign markets.
- Open branches and representation offices abroad.
- Build, invest, administrate and own financial projects of all types at the exception of the red flags mentioned in article 2 of the present code.
- Open credits and contract loans to finance the aforementioned operations and activities from banks and financial institutions resident in Lebanon or abroad.
- Lease offices in Lebanon and own any estates needed for their activities and business pursuant to the code on acquisition of real estate rights by the foreigners in Lebanon.

5. Prohibited Activities: All activities which are not included in the object of the Company as detailed above.
The Offshore Company may not carry on insurance activities of any type, operations or activities undertaken by bank or financial institutions or institutions subject to the control of the central bank of Lebanon. It shall also refrain from collecting any amounts or benefits or revenues from the movable or immovable monies in Lebanon or providing any services to institutions resident in Lebanon at the exception of the revenues of their bank accounts and the ones relevant to subscriptions in Lebanese treasury bonds and negotiation thereof.

6. Tax: the Offshore Company has a Special Tax Treatment as described below.

7. Appointment of an Attorney and Auditor: the Appointment of an Attorney is not a must unless the capital is above LBP/50.000.000/ or its Annual Accounts over USD/500.000/. The Auditor should be residing in Lebanon and of Lebanese nationality. No additional Auditor shall be appointed by the Commercial Court.

8. Administration: the Administration of the Company shall be entrusted to a Board of Directors composed of a minimum of three members and a maximum of twelve. The Offshore Company is exempted from the requirements of Lebanese Directors in the Board of Directors (As per the Law No. 19 dated 05/09/2008). If the Chairman of the Board is a foreign national, he does not require a Lebanese Work Permit, provided he does not actually reside in Lebanon.

9. Head Office: An Offshore Company may have its headquarters in or outside Lebanon but by definition operates outside Lebanon.

10. Company’s Structure:

a. General Meetings of the Shareholders:

i. The constituent Assembly which is held once to confirm the Formation of the Company.

ii. The Ordinary General Meeting which is held at least once per year in Lebanon after closing of the Annual Accounts and may, under special circumstances, be convened once or more during the year provided the object of such meeting does not concern the amendment of the company’s statutes.

iii. The Extraordinary General Meeting shall deliberate on all prospective amendments of the statutes with the exclusion of changing the company’s nationality, increasing the range of liability of shareholders or affecting rights of third parties.

b. The Board of Directors: The Board of Directors shall have the broadest powers to implement the resolutions of the General Meetings of shareholders, and to carry out all acts required for the smooth operation of the Company. The meetings of the Board of Directors might be held abroad.

b. Formation:

The Offshore Company is structured a formed like a Joint Stock Company. A special Register kept the Commercial Register in Beirut in which all Offshore Companies should be registered.

1. Information and Documents required:

• The Articles of Association duly signed by the Partners before the Notary Public.
• Full name, nationality, Place and Date of Birth, and the domicile of each of shareholders along with a copy of their ID.
• The Name of the Company.
• The object or purpose of the Company as defined by Law.
• The minutes of Meeting of the Constituent Assembly Meeting.
• The minutes of the Meeting of the Board of Directors in which the Chairman was elected.
• The amount of the capital and the value of contribution made by each partner along with the Deposit Advise from the bank.
• The Commercial Circular showing the name and signature of the Authorized signatory.
• The address of the registered office and the addresses of the branches if any.
• The date of formation of the Company and its duration.

Any amendment on the status of the Company should also be registered in the Commercial Register.

The Official Charges for the registration of an Offshore Company at the register is estimated as follows:

- Financial Tax: LBP/1.000.000/ (Around USD/667/) + 3/1000 of the capital amount to be paid at the Office of the Ministry of Finance.
- Judicial Fees: LBP/500.000/ (Around USD/334/).
- Bank Guarantee (Automatically Renewable): LBP/100.000/ (Around USD/67/) to cover the company’s obligation towards the Tax Authorities.
- Official Fees: 5.5/1000 of the Capital Amount.
- BBA Fees: 1/1000 of the capital amount to be paid within the Notary Public Fees.
- POA registration: LBP/100.000/ (Around USD/67/).
- Stamps: LBP/4.000/ (on the Application).
- Each Certified True Copy of the Registration Documents: LBP/2000/.
Foreign Companies
Foreign Companies may operate in Lebanon either as a Branch or as a Representative Office.

a. Branch of a Foreign Company:

A Branch may engage in any business activity listed in the Foreign Company’s Articles of Association provided that it does not contravene Lebanese Law.

The main characteristics of a Branch:

- The Branch shall have the same moral entity of the foreign company and shall be subject to its legal articles of association therefore it shall reserve its foreign nationality.
- Branch Offices are not subject to minimum capital regulations.
- The Branch of a Foreign Company should be register before the Ministry of Economy & Trade (MoET) and the Competent Commercial Register.
- If the head of the Branch Office is foreigner, he must obtain a residence and Work Permit.
- Net Income derived from a branch’s operations in Lebanon is subject to Lebanese Business Income Tax, levied at a rate of 15%.

1. Information and Documents Required:

The Application for the establishment of a Branch of a Foreign Company in Lebanon should be addressed to the Ministry of Economy & Trade (MoET) signed by the Branch Manager or an Attorney. It must include the name of the mother Company, the address of its registered Head Office and details of its capital and structure. The Application should be accompanied by the following documents:
- A copy of the Articles of Association of the Foreign Company certified by the Commercial Register in the Country of Origin and the Lebanese Consulate in the Country of Origin and the Lebanese Ministry of Foreign Affairs, translated into Arabic by a sworn Translator and certified by the Ministry of Justice.
- A copy of the Resolution of a Board of Directors or General Assembly Meeting setting up a Branch in Lebanon certified by the Lebanese Consulate in the Country of Origin and the Lebanese Ministry of Foreign Affairs, translated into Arabic by a sworn Translator and certified by the Ministry of Justice.
- A copy of the Resolution of a Board of Directors or General Assembly meeting appointing the Branch Manager certified by the Lebanese Consulate in the Country of Origin and the Lebanese Ministry of Foreign Affairs, translated into Arabic by a sworn Translator and certified by the Ministry of Justice.
- A Power of Attorney (POA) in favour of a representative in Lebanon authorizing him to act on behalf of the mother company in establishing the branch in Lebanon, notarized and legalized up to the Lebanese Consulate in the country of origin if it is effected abroad.

After the “Notice” is granted by the MoET, the branch should be incorporated at the competent Commercial Register in the district in which the Lebanese Branch is to be located. The representative should submit to the Commercial register the “Notice” received from the MoET and the same documents presented to the MoET (described above).

2. Cost:

- The flat fee for the registration before the MoET is LBP/1,800,000/ (Around USD/1200/).
- Publication Fees in the Official Gazette which depends on the space needed for the publication of the Notice (Around USD/1/ per word).
- The flat fee for the registration before the Commercial register is LBP/900.000/ (Around USD/600/).

b. Representative Office of a Foreign Company:

The representative office shall not have a separate entity from the one of the foreign company and shall be subject to its articles of associations. The activity of the representative office shall be restricted to the marketing of services and goods provided by the foreign company directly without any engagement in any commercial, industrial or financial activities in Lebanon.
A Representative Office is exempt from Income Tax.
The Cost and Documents and information required for the registration of a Representative Office in Lebanon are the same as described for the registration of a Branch.
Stamps Duties
Lebanon charges stamp duties on all legal documents and agreements including amounts of moneys. The rate of the stamps duties tax is 0.3% of the amounts included in the documents and agreement to be paid within 5 days from their signature. The rate is reduced to 0.15% in respect of commercial bills.
Offshore companies are exempt from Stamp duties on overseas contracts signed in Lebanon.
Value Added Tax (VAT)
The VAT in Lebanon is equal to 10% flat rate. Many products and services are exempted from VAT such as medical services, education, bread, books, gas for household consumption and others (Article 16 and 17 of the VAT Law).
Personal Income Tax
The Law differentiates between daily employments and earnings from practicing a profession or trade. Salaries are taxed on a sliding scale. The Tax rate is as low as 2% and as high as 20%.
Gross Income is the sum total of salaries, allowances, annuities, bonuses, pension, and other benefits after the deduction of LBP/7.500.000/ per person to which shall be added LBP/2.500.000/ for the married taxpayer and LBP/500.000/ per legitimate child under his custody.

Income (LBP) Tax Rate
1 to 6,000,000 2%
6,000,001 to 15,000,000 4%
15,000,001 to 30,000,000 7%
30,000,001 to 60,000,000 11%
60,000,001 to120,000,000 15%
More than 120,000,001 20%


The employer should deduct the taxes due on the employeesʹ remuneration and pay them over to the Taxation Authorities together with the taxes due by the employer. 30% of the initial wage of the foreigner employee working at an Offshore Company shall be considered as representation compensation and therefore shall not be subject to any taxes on wages or salaries.
Corporate Tax
i. Joint Stock and Limited Liability Companies:

1. 15% tax on Business Profit.
2. 7.5% tax on profits received from the development or sale of real estate.

A withholding tax at a rate of 10% is levied on all income derived from movable capital assets generated in Lebanon. This tax essentially concerns:

- Distributed dividends, interest and income on shares.
- Directors’ fees as well as amount payable to them from profits.
- Distribution of reserve or profits in form of additional shares or under any form.

ii. Holding Companies:

The Holding Companies are exempt from paying:

- Income Tax on profits.
- Income Tax on profit distribution.

Nevertheless Holding companies shall be liable to pay the following taxes:

- The income tax applied on interests resulting from short term loans (less than three years) granted to companies operating in Lebanon.
- The tax set forth in article 45 of the income tax (10%) applied on the profit resulting from the cession of shares or participations it owns in Lebanese companies since a period of time less than two years.
- A tax of 5% applied on the amounts collected by the holding from its affiliated companies in Lebanon for administrating the same or rendering any other similar services or else, save that such amounts do not exceed the limits defined in the decree approved by the Minister of Finance.
- A tax of 10% applied on the amounts collected by the holding from companies or institutions located in Lebanon to which it has leased or rented its patents and intellectual rights. No other tax shall be added to this one.
- A yearly lump-sum tax of 6% applied on the total value of its capital added to the provisions whenever such amount does not exceed 50 million Lebanese pounds.
This tax shall be reduced to 4% for amounts between 50 to 80 million LP, and 2% for the amounts exceeding 80 million LP. Save that the total value of the yearly tax does not exceed 5 million LP. This tax is applied on holding companies as from the first fiscal year notwithstanding the duration of their term.
- Holding companies shall pay the tax once upon submission of the tax declaration within the time limit set for this purpose. A delay fine of 1/1000 shall be applied for each day if the duties are not paid on time.

iii. Offshore Companies

Offshore companies are exempt from:

- Tax on profits.
- Tax on profits distribution.
- Stamp duties on overseas contracts signed in Lebanon.

The Offshore Companies are subject to:

- LBP/1.000.000/ (Around USD/667/) fixed Annual Tax.
- 10% tax on profit received from the sale of fixed assets in Lebanon.
- Income tax on the salaries of its employees working in Lebanon.
Merchants and Partnerships
Joint Partnerships, limited Partnerships, Joint ventures as well as Merchants and Businessmen are taxed at progressive rates starting from 4% up to 21%

TAXABLE INCOME RATE
0 ‐9,000,000 4%
9,000,000 ‐24,000,000 7%
24,000,000 ‐54,000,000 12%
54,000,000 ‐104,000,000 16%
104,000,000 ‐and above 21%
Tax Treaties
Lebanon has signed treaties for the avoidance of double taxation. The Lebanese double taxation treaty network is one of the widest in the Middle East region with more than 30 treaties signed with different countries.
Social Security Contribution
The IDAL Investment Development Agency of Lebanon was established in 1994. Its main aim is to attract private capital investment to support the reconstruction of Lebanon. IDAL is a public Investment Promotion Agency, it is responsible for attracting private capital investments to Lebanon and assisting investors in the development and implementation of their projects. It is a special body designed to operate in close collaboration with all concerned ministries and public administrations and reports directly to the Prime Minister.

The mission of IDAL is to present a broad, balanced, and objective overview of Lebanon’s assets for prospective investors, thus helping them to translate knowledge and understanding of the country into rewarding opportunities. Its main intention is to facilitate and assist investment growth in the Lebanese economy through the provision of investor-tailored services and seamless information and procedural support.

The Investment Development Law No. 360 dated 16/08/2001 proposed several incentives for the investors in Lebanon among them the Investment Zones which classified Lebanon into three investment zones (A, B and C).



Zone A:

These areas will benefit from the following exemptions, reductions and facilities:

1- Work Permit of various categories, exclusively needed for the project, provided that at least two Lebanese nationals are employed against one foreigner, and are registered in the NSSF.

2- Exemption from Income Tax for 2 years (from the date of listing the shares on the Beirut Stock Exchange), provided that the effective negotiable shares are no less than 40% of the capital of the Company.

Zone B:

These areas will benefit from the following exemptions, reductions and facilities:

1- Work Permit of various categories, exclusively needed for the project, provided that at least two Lebanese nationals are employed against one foreigner, and are registered in the NSSF.

2- Exemption from Income Tax for 2 years (from the date of listing the shares on the Beirut Stock Exchange), provided that the effective negotiable shares are no less than 40% of the capital of the Company. This exemption period shall be added to any other exemption period enjoyed by the Company.

3- A 50% reduction in income taxes and taxes on project dividends, for a period of five years. Reduction shall apply from the date of commencement of exploitation of the project governed by the provisions of this law. In the event that the investor benefits from the aforementioned exemptions related to the listing of shares at the Beirut Stock Exchange, reduction shall apply after the lapse of that exemption period.

Zone C:

1- Work Permit of various categories, exclusively needed for the project, provided that at least two Lebanese nationals are employed against one foreigner, and are registered in the NSSF.

2- Exemption from Income Tax for 2 years (from the date of listing the shares on the Beirut Stock Exchange), provided that the effective negotiable shares are no less than 40% of the capital of the Company. This exemption period shall be added to any other exemption period enjoyed by the Company.

3- A full exemption for 10 years from income taxes and taxes on project dividends, for a period of five years. Reduction shall apply from the date of commencement of exploitation of the project governed by the provisions of this law. In the event that the investor benefits from the aforementioned exemptions related to the listing of shares at the Beirut Stock Exchange, reduction shall apply after the lapse of that exemption period.

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