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/.