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Guide to Doing Businessin Lebanon
(Updated to February 24, 2010)
Submitted by: Moghaizel Law Officeshttp://www.mlof.com
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I. THE COUNTRY AT A GLANCE
A. What languages are spoken?
Arabic99%(officiallanguage)
English50%
French45%
Armenian5%
B. What is the exchange rate for the U.S. dollar, the Euro?
1US$=1,507LebanesePounds(February2010)
1Euro=2,053.75375LebanesePounds(February2010)
C. Describe your countrys geography, proximity to other countries and climate.
LebanonisacountryinWesternAsia,ontheeasternshoreoftheMediterraneanSea,which
liesbetween33and34.40Northlatitudeand35and36.40Eastlongitude.Itisborderedon
theNorthandEastbySyria,ontheSouthbyIsrael,andontheWestbytheMediterranean
Sea,withatotalboundarylengthof679kmofwhich225kmiscoastline.Thehighestpeakis
QornetAlSaouda(3,083meters).ThefourseasonsareveryclearinLebanon,butinaverage
thetemperatureisaround17.728.7Celsius.
Otherneighboringcountries:Jordan,UAE,SaudiArabia,Iraq,KuwaitandIran.
Lebanonsgeographic location,topographyandclimateareundoubtedlythecountrysmain
features.
D. Are there cultural influences or prohibitions on the way business is conducted?
E. Are there religious influences or prohibitions on the way business is conducted?
Lebanon has always followed a liberal economic policy. Governmental regulations and
interventionhavebeenminimal.Thepubliceconomicpolicyinvolvesmerelytheapplication
ofaxiomsderived from theeconomicsofprivateorfreeenterprise.Therefore,thereare
neitherculturalnorreligiousinfluencesnorprohibitionsonthewaybusinessisconducted.
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F. Explain your countrys infrastructure. Be sure to explain which cities have airports,railroad systems, ports, public transportation.
Reorganization of the transport sector is considered to be a priority due to its social,
economic,urbanandenvironmentaldimensions.Theoperation isstillfarfromcomplete.A
large
number
of
projects
are
still
in
progress:
1.Roadtransport:
Theroadtransportationsectorstillsuffersfromseriousstructuraldifficulties.Thenetworkin
Lebanon includes about6,360kilometersof roads. It isorganizedaround threemainaxes
fromthecapital:
a BeirutTripoli,SouthNorth.
b BeirutDamascus,NorthEast.
c BeirutTyre,NorthSouth.
Severalprojectstodeveloptheroadsnetworkhavebeenstartedandarebeingmonitoredby
the relevant governmental organizations such as the Council for Development and
Reconstruction(CDR).
Publictransports:Publictransportsareprovidedbythepublicsectoraswellasbyprivatecompanies.Theservicetaxinetworkandprivatebusesserveall localities
withinlargetownsaswellasvarioustownswithinthecountry.
Railway transportation: A rudimentary railway network briefly operated in
Lebanon.
It
grounded
to
a
half
when
the
war
started.
It
is
currently
non
operational. Theoretically, railway lines in Lebanon covered a network of 428
kilometersspreadon3axes:
i. Acoastalrailway,224kilometersfromNakouraintheSouthtoAkkarintheNorth.
ii. A lineof102kilometerspassingthroughtheNorthof Bekaameeting
thecoastallineatHoms,Syria.
iii. Aninternallineof102kilometerslinkingBeiruttoDamascus.
Aprojecttorehabilitatetherailwaynetworkhasbeenconsideredbutnotyetimplemented.
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2.Marinetransport:
The port infrastructure in Lebanon is concentrated primarily in the Beirut Port and
secondarilyattheportsofTripoli,Chekka,Jounieh,SaidaandTyreaswellasthepetroleum
portsofTripoliandZahrani.
3.Airtransport:
Remarkableeffortshavebeenmadeintheairtransportationsectorduringrecentyears.The
additionalinfrastructure,adoptionofnewtechniques,andthesigningofseveralagreements
wereaimedat increasing trafficat theBeirutRaficHariri InternationalAirport.Openedon
April3,1998,thenewairportisofinternationalstandardandcanstanduptointernational
comparison.
TheRaficHariri InternationalAirport isalso thehub forLebanon'snationalcarrier,Middle
EastAirlines(MEA).G. Explain the communication system.
Lebanons telecommunications network improved considerably following the development
and rehabilitation projects undertaken by the Ministry of Posts, Telephones and
Telecommunications.Additionally,thephenomenalgrowthofcellulartelephonesduringthe
lastfewyearshasbroughttelephoneservicestoquitealargenumberofpeople.
ThefixedsystemisknownbytheacronymPSTN(PublicSwitchedTelephoneNetwork).
The
telephone
system
management
installed
public
phone
booths
throughout
the
main
cities
ofthecountry.
The cellularmobile telephone systemwas established through private sectorparticipation
paralleled with the public investment program. The Government adopted the BOT (build,
operate and transfer) approach to theproject. Thismeans that theoperatorprovides the
funds needed to carry out the work and operate the system. The private operators in
LebanonwereTelecomFinland International, representedbyLibancellandFranceTelecom
MobileLiban,representedbyCellis.
From June 1st, 2004 the GSM network in Lebanon has been transferred to the Lebanese
Governmentanditisbeingoperatedby:
MobileTelecommunicationsCompanysarl, (mtc touch is thebrandnameof thenetwork
ownedbyMobileInterimCompanyNo2SAL.)
Orascom Telecom, (Alfa is the brand name of the network owned by Mobile Interim
CompanyNo1SAL.)
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PostalservicesaremanagedbyaprivatecompanycalledLibanpostSAL.
H. Describe the public services i.e. water, electricity, gas. Are they publicly orprivately owned?
1 Electricity:TheGovernment iscarryingoutanextensiveprogramtorehabilitateandexpandelectricalpower.However,powerisstillnotprovided24hoursadayandisrationed
inallLebaneseregions.
2 Water: Unlike neighboring countries, Lebanon does not suffer from a shortage ofnaturalwater.However,waterresourcesaredecliningduetodecreasingquantitiesofrainor
increasedexposuretopollution.Atthetimebeing,thereareofficesandcommittees,under
the supervision of the Ministry of Hydraulic and Electrical Resources, in charge of the
managementofthewatersupply.PerformanceofthisMinistryisconsiderablyhamperedby
insufficientbudgetaryfundsandlowstaffinglevels.
The CDR has launched projects for the recovery of water transmission and purification in
three ways: Technical assistance to the Ministry of Hydraulic and Electric resources,
rehabilitationof current infrastructureand theextensionof current,andprovisionofnew
infrastructures.Boththeelectricitysectorandthewaterservicesarepubliclyowned.
3 Gas: Gas distribution is ensured by privatelyowned bottled gas distributioncompanies.Thereisnogaspipesnetwork.
II. GENERAL CONSIDERATIONS
A. Investment policies
1. Does the country generally welcome investment? Are there governmental or privateagencies devoted to the promotion of investment?
The Government has generally followed a policy to encourage foreign investments. Full
foreign ownership of businesses is free, subject to a very limited number of restricted
activities such as exclusive commercial agency in relation to which Lebanese majority
ownershipisprescribed.ForeignersmayfreelyownpropertyinLebanonupto3,000square
metersandwithauthorizationbeyondsuchlimit.
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2. What is the rate of inflation?
YearInflationrate(consumer
prices)Rank
Percent
Change
Dateof
Information
2003 3.50% 104 2002est.
2004 2.50% 137 28.57% 2003est.
2005 2.00% 53 20.00% 2004est.
2006 2.40% 68 20.00% 2005est.
2007 4.80% 129 100.00% 2006est.
2008 4.20% 107 12.50% 2007est.
2009 10.00% 145 138.10% 2008est.
3. Explain any sector exceptions, incentives or restrictions on foreign investment?
Thereareneitherexceptionsnorrestrictionsonforeigninvestment.Therearenosignificant
incentivesforforeigninvestments.
4. Describe de facto restrictions on investment, if any, such as bureaucratic discretion.
Therearenodefactorestrictionsoninvestment.
5. What is the size of the different markets?
Lebanon
being
a
small
country,
there
is
a
single
market,
where
the
services
sector
is
predominant.
6. What types of businesses are conducted in the country?
AlltypesofbusinessesareconductedinLebanon.
B. Diplomatic Relations
1. Explain any established diplomatic relations your country may have.
Lebanon
has
diplomatic
relations
with
a
very
large
number
of
countries.
There
are
no
restrictionsastoestablishingdiplomaticrelationswithanycountryexceptwithIsrael.
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2. Give addresses and telephone numbers for the embassies or consulates in yourcountry?
Emb assy o f A lger ia in Be i ru t , Lebanon Rue Jnah Bp 4794/11City : Beirut
Phone: 961 1 82 67 12, 961 1 82 20 81Fax: 961 1 82 67 11, 961 1 84 08 81
Emb assy o f Argen t ina in Be i ru t , LebanonAchrafieh, Rue Sursock N 161, Imm. MoutranResidence des Jardins, 2 eme. etageBeirut, LebanonCity : BeirutPhone: (+961) 1 210 800 / 801
Emb assy o f Arm en ia in Be i ru t , Lebanon Rabieh, MtailebJasmin St.Beirut, LebanonCity : Beirut
Phone: (961 4) 402952Aus t ra l i an Embassy in Be i ru t , Lebanon Embassy ComplexSerail HillBeirut, Centre-VilleLebanonCity : BeirutPhone: (961-1) 974030
Emb assy o f Aus t r ia i n Be i ru t , Lebanon Avenue Charles Malek, Tabaris 812 Bldg., 8. FloorTabaris - AchrafiehBeirut, LebanonCity : Beirut
Phone: (+961) (1) 21 73 60- (+961) (1) 21 74 12 - (+961) (1) 21 74 91
Emb assy o f Be lg ium in Be i ru t , Lebanon Batiment Lazarieh - bloc A10eme etage - Rue Emir BechirBeyrouth Centre VilleCity : BeirutPhone: + (961) (0)1/97.60.01 to 05
Consulat e of Bel ize in Jdeidet El Metn , Lebanon Fanar, Saga Consept BuildingP.O.Box 90-887Jdeidet El Metn 12022070LebanonCity : Jdeidet El Metn
Phone: (961)1 87242- (961) 42-1-8974501
Bulgar ian Embassy in Be i ru t , LebanonHazmieh, MarTakla, sector 6, str.44Beirut, LebanonCity : BeirutPhone: 00961 5452883-00961 5453658
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Em bassy of Canada in Bei r ut , Lebanon First Floor, Coolrite Building, 43 Jal El Dib HighwayBeirut, LebanonCity : BeirutPhone: 961 (4) 713-900
Chin ese Em bassy in Bei rut , Lebanon
72, Rue Nicolas Ibrahim Sursock
Ramlet BaidaBeirut, LebanonCity : BeirutPhone: 00961-1-850314
Em bassy of Colom bia in Bei rut , Lebanon Jal El Dib, Center Mazda, Flr 5Beirut, LebanonCity : BeirutPhone: (961) 4 712646-(961) 4 712648 -(961) 4 712647
General Honor ary Consulate of Costa Rica in Bei ru t , Lebanon Abd-El-Baki Bldg1st Floor Facing Broadway Center Hamra Street,Beirut, LebanonCity : BeirutPhone: 00 (961) 134-34-64 / 00 (961) 134-34-54
Consulat e of the Republ ic of Croat ia in Bei rut , Lebanon Sofil Center, Floor 4Ashrafia, BeirutLebanonCity : BeirutPhone: 0096 11219 533
Em bassy of Cuba in Bei ru t , Lebanon Hazmieh-Mar TaklaRue Said FreihaCenter Farrania
2901 6727 Beirut, LebanonCity : BeirutPhone: (961) 05-459925
Honorary Consu la te o f t he Repub l i c o f Cyprus in Be i ru t , Lebanon Cyprus AirwaysStarco Building, - Block CGround FloorCentral BeirutLebanonCity : BeirutPhone: (00961) 1 366192, (00961) 3 691700 (Mob.)
Emb assy o f t he Repub l i c o f Cyprus in Be i ru t , Lebanon M.N.C. BuildingDebbas StreetRmeil-AchrafiehBeirut, LebanonCity : BeirutPhone: (+ 961) 1 326461-(+ 961) 1 329500- (+ 961) 1 217902- (+ 961) 1 217897
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Em bassy of the Czech Repub l ic in Bei rut , Lebanon Antonieh Str., Baabda, BeyrouthP.O. Box 40-195City : BeirutPhone: 009615/929010-(961)5/929011-(961)5/929012-(961)5/929013-(961)5/929101
Royal Danish Em bassy in Lebanon Embassy ComplexArmy StreetSerail Hill, Down TownBeirut, LebanonP.O. Box: 11-5190City : BeirutPhone: +961 1 991 001 /2/3/4/5/8Honorary Consu la te o f t he Domin ican Repub l i c i n Be i ru t , Lebanon Property Said RahalHadet-BaadbaCity : BeirutPhone: (961) 5 460 440
Ecuador ian Consulate in Bei rut , Lebanon
Marignan Medcom Center (11th Floor)Rue du Caire (Near A.U.H) Hamra sectorP.O.Box. 113-5770 HamraBeirut, Lebanon.City : BeirutPhone: 961-1-344234; 961-1-353 648; 961-1-344 234
Em bassy of Egyp t in Lebanon 4653 Dr. Muhammed El-Bethri st. - Be'ar HassanCity : BeirutPhone: (009611) 859977 - 825566Fax: (009611) 859988
Em bassy of Fin lan d in Bei rut , Lebanon Sadat Tower, 5th floor
Sadat StreetPostal Address:P.O.Box 113-5966City : BeirutPhone: + 961 1 802 275/ 6
Honorary Consu la te Genera l o f F in land in Be i ru t , Lebanon 30, rue BadaroChaoui Building, 3rd Floor, BadaroPostal address: Honorary Consulate General of FinlandP.O. Box 11-7956 OmnipharmaCity : BeirutPhone: +961-1-396704, -705-708
Em bassy of Fran ce in Bei rut , Lebanon Rue de Damas - Espace des LettresRas El-Nabaa - BeyrouthCity : BeirutPhone: [961] (1) 42 00 00
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Consulat e General of Fran ce in Bei rut , Lebanon Espace des Lettres - Batiment ARue de DamasBP 11-477 - BeirutCity : BeirutPhone: [961] (1) 42 00 00
German Embassy in Lebanon
B.P. 11-2820 Riad El-SolhBeirut 1102 2110LebanonCity : BeirutPhone: (00961 4) 91 44 44
Em bassy of Greece in Bei rut , Lebanon P.O. Box 11-0309City : BeirutPhone: (009614) 418772, 521700, 524378
Danish Em bassy in Lebanon Embassy ComplexArmy StreetSrail Hill Down Town
Beirut, LebanonCity : BeirutPhone: +961 (1) 991 001
Honorary Consu la te o f Guatem ala in Be i ru t , Lebanon Ras Beirut Street Justinian CenterCity : BeirutPhone: 00961 3 691916Fax: 00961 134-5457
Consu la te o f Guyana in Be i ru t , Lebanon Selim Bustros Street 1st Floor E1 Dar Building Achrafteh, Beirut, Lebanon.City : BeirutPhone: 961-1-202-220 / 961-1-200-689
I nd ian Emb assy o f I nd ia in Lebanon 31, Kantari StreetSahmarani BuildingP.O. Box No. 113-5240 ( Hamra ),&11-1764 ,Beirut,-1107-2090City : BeirutPhone: 00-961-1-373539, 372619
Emb assy o f I ndones ia in Baabda, Lebanon Presidential Palace AvenueRue 68 Sector 3, No. 3237(P.O.BOX 4007)City : BaabdaPhone: (961-5) 924-682, 924-683, 924-676
Honorary Consu la te o f I ndones ia in T r ipo l i , Lebanon Boulevard StreetKhlat BuildingTripoli, LebanonCity : TripoliPhone: (961-6) 433-913
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Emb assy o f The Repub l i c o f I raq in Lebanon Phone: 009615 - 453209 / 009615 - 435211Fax: 009615 459850
Honorary Consu l Genera l i n Be i ru t , LebanonRue de ChilieKollelat Building - VerdunP.O. Box 11-746SPINAL LECity : BeirutPhone: +961-1-863-040 / -863-239
Emb assy o f I t a l y i n Be i ru t , Lebanon Rue du Palais Presidentiel2902 2633 - BaabdaP.O. Box 57 BaabdaCity : BaabdaPhone: 961 5 954955
Jamaican Consulat e in Lebanon Mme Curie StreetMinkara Centre Bldg., 3rd Fl.Hamra, P. O. Box 5584City : BeirutPhone: 747-244/5/6, 352425, 340736
Em bassy of Japan in Bei ru t , Lebanon Serail Hill Area, Army Street,Zokak el Blat, near the Grand SerailP.O.Box 11-3360, LebanonCity : BeirutPhone: +961-1-989751
Emb assy o f Jo rdan in Be i ru t , Lebanon
Babda/ Elias Al HiloPO Box 5113City : BeirutPhone: +96-1-5922501/+96-1-5922500
Kuw ai t i Embassy in Be i ru t , Lebanon Bir Hassan RoadPoint Cit SportiveP.O.Box 4380BeirutLebanonCity : BeirutPhone: (+961-1) 822515/6/7 or (+961-1) 85252
Em bassy of Malays ia in Bei rut , Lebanon 5 & 6 Floor, Halawani BuildingSalah Eldin Al Ayyoubi Str,Ras Beirut, Beirut, Republic of LebanonCity : BeirutPhone: 00 961 1 787144 or 00 961 1 787166
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Honorary Consu la te o f Ma l ta in Be i ru t , Lebanon Pres. Elias Sarkis AvenueSarraf BuildingAchrafiehP.O. Box 165533Beirut
City : BeirutPhone: 00961 (1) 322 999; 328 999
Em bassy of Mex ico in Bei rut , Lebanon Secteur 2, str. 53Mansour Bldg # 90, 1st. floorNew NaccacheCity : BeirutPhone: (961-4) 418-870 al 72
Emb assy o f Morocco in Be i ru t , Lebanon.BIR HASSANRUE DES NAT. UNIES- PRES DE L'UNUFILBeirutCity : Beirut
Phone: (+961) (1) 85 98 51, (+961) (1) 85 98 29
Honorary Consu la te Genera l o f Nepa l i n Be i ru t , Lebanon Street-Nadim Comair Bldg,City : BeirutPhone: 00961-1-386-690
Emb assy o f t h e K ingdom o f t h e Nether lands in Be i ru t , Lebanon Netherlands TowerCharles Malek Avenue,Opposite Centre Sofil2073-0802 Achrafieh1100-2190City : BeirutPhone: 00-961-1-204663
Roya l Norweg ian Embassy in Be i ru t Embassy Complex, Serail HillPostal Address: P.O. Box 113.7001, Hamra, 1103-2150City : BeirutPhone: +961-1-960-000
Emb assy o f t he Su l tana te o f Be i ru t , Lebanon Al- Remla Al- Bida Venezuele StreetAl-Tyser BldgP.O. Box 135900 Beirut ShouranCity : BeirutPhone: (009611) 856555
Embassy of Pak is tan in Bei rut , Lebanon Watta Moseitbeh,Gabriel El Mur StreetDar Salam Building Beirut- LebanonCity : BeirutPhone: (+961-1) -835453 &835634
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Emb assy o f t he Ph i l i pp ines in Be i ru t , Lebanon Building No. 29Plot No. 511Charles Malik Avenue Across Roadster DinerAchrafieh, Beirut LebanonP.O. Box No. 136631City : Beirut
Phone: (9611) 212-001 to 3
The Em bassy of the Republ ic of Poland in Bei r ut Av. President Suleiman Frangieh52 /Raymond Khalife Bldg.40-215 BaabdaCity : BeirutPhone: 05-928-881, 05-468-152
Emb assy o f t he Sta te o f Qata rShoran-Dabs Buildint, 1st FloorBeirutLebanonCity : BeirutPhone: (+961-1) 865271
Em bassy of Rom ania in Baabda, Lebanon Route du Palais Prsidentiel,BaabdaLebanonCity : BaabdaPhone: (00) (961) (5) 924848 or 924849
Em bassy of Russ ia in Bei rut , Lebanon Beirut-Rue Mar Elias el-Tina, B.P. 5220, Beirut, LebanonCity : BeirutPhone: (+9611) 30-0042
Consulat e General of San Mar ino in Bei ru t , LebanonAutoroute Jal El Bid
Yachouhi BuildingCity : BeirutPhone: +961-4-714002
Seychel les Consulat e Bei rut , Lebanon PO Box 55363, BeirutCity : BeirutPhone: (+961-1) 680674
Consulat e of Sierr a Leone in Lebanon Speats St, near the Lebanese Red Cross building P.O.Box 112016City : BeirutPhone: +961-1-367264
Consulate of Singapore in Lebanon Center Sofil, Charles Malek Avenue AchrafiehAchrafiehCity : BeirutPhone: +961-1-334-335 / +961-1-200-786/+961-1-200-787
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Slovenia Em bassy in Lebanon
JouniehPO Box 818City : Jounieh BeyrouthPhone: +961-9-900003
Emb assy o f Nor th Korea in Mousa i tbeh , Lebanon Camelia 3 bldg, 5th floor, Said Freiha StreetPO Box 40-290 BaabdaHazmiehCity : BaabdaPhone: +961-5-953167/+961-5-953169
Em bassy of Spain in Lebanon Palais Chehab, Hadath AntounieB.P.: 11/3039City : BeirutPhone: (+961) 5 46 41 20
Emb assy o f Sudan in Be i ru t , Lebanon Minkara Building
Verdun StreetCity : BeirutPhone: +961.1.353.270
Consulat e-General of Sw eden, Bei rut Fattal BuildingEcochard Avenue, Sin El FilBeirutLebanonCity : BeirutPhone: +961 (1) 485489
Syr ian Emb assy in Be i ru t , Lebanon Hamra StreetHamraCity : Beirut
Phone: 009611735849/ 009611736145
Emb assy o f Uk ra ine in Lebanon Sin El-Fil, Jisr Al-Bacha,Al-Bacha Gardens, Bloc BCity : BeirutPhone: (+961-1)-510527 / 510531 / 511971
Emb assy o f Un i ted Arab Emi ra t es in Be i ru t , Lebanon Al Janah - Ramlah Al Bayda, Opposite to Edin RockBeirut, LebanonCity : BeirutPhone: +961-1-8570006
Emb assy o f Grea t Br i t a in in Be i ru t , Lebanon Serail HillBeirut Central DistrictPO Box : 11- 471 BeirutLebanonCity : BeirutPhone: 00961 (0)1 990400
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Emb assy o f t he Un i ted S ta tes in Be i ru t , Lebanon Awkar facing the MinicipalityP.O.Box: 70-840 AnteliasLebanonCity : BeirutPhone: (961) 4 542600 543600
Emb assy o f U rug uay in Lebanon Rue Banque du Liban, Immeuble, Stella Maris , 3e. Etage, JouniehCity : BeirutPhone: +9619 63-65-29 / +9619 63-65-30
Em bassy of Venezuela in Lebanon Rue Marche Zalka Breezevale House, 5th floorBeirut, LebanonCity : BeirutPhone: +961-1-88-87-01 / +961-1-88-87-16
Emb assy o f Yemen in Be i ru t ,P.O.Box 114Beirut
LebanonCity : BeirutPhone: (+961-1) 852691/2, 852688
3. Are there prohibitions or restrictions on certain business dealings with the country?
There are generally no such restrictions or prohibitions, subject to compliance with the
relevantregulations.
4. Explain any travel restrictions to or within the country?
Thereareneithertravelrestrictionswithinthecountrynortothecountrywiththeexception
ofIsrael:IsraelicitizenscannotentertheLebanesesoilandanypersonwhohasanentryvisa
toIsraelonhispassportcannotenterLebanon.
C. Government
1. Explain your countrys election system and schedule. Is there an anticipated changein the present government?
Thereare128membersofParliament,halfofwhichareChristiansandhalfMuslims.Each
candidateiselectedforafouryearmandate.
EveryLebanesecitizenaged21(Maleorfemale)canvote.
There isnoanticipated change in the current government, itwas appointed following the
generalelectionsinJuneof2009andshouldremainassuchforfouryears.
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2. Is the present government stable? Briefly explain your countrys political history inthe last decade.
Intheyear2000,IsraelpulledoutfromthesouthofLebanon.
OnSeptember2,2004,theUNSecurityCounciladoptedUNSecurityCouncilResolution1559,
coauthored by France and the United States. Echoing the Taif Agreement, the resolution
"callsuponallremainingforeignforcestowithdrawfromLebanon"and"forthedisbanding
anddisarmamentofallLebaneseandnonLebanesemilitias."
OnFebruary14,2005,RafikHariri,theformerPrimeMinisterofLebanonwasassassinated,
andastringofpoliticalassassinationsandterroristattackstookplaceinthecountry.
International pressure for the withdrawal of Syria intensified and public perception in
LebanonturnedstronglyagainstSyria,evidencedbymassdemonstrationsthatwerelabeled
theCedarRevolution.PresidentBasharalAssadofSyriaannouncedonMarch5,2005thathe
planned to "bring his forces home." The withdrawal, involving about 14,000 troops, took
aboutsevenweekstocomplete.
OnMay7,2005MichelAoun,Lebanesepoliticianandformermilitarycommander,returned
toLebanonafter15yearsofexile.
On April 26, 2005, after 29 years of military action in Lebanon, the last Syrian troops left
Lebanon.
Thegovernment(presidedbyOmarKarami)resignedandatransitionalgovernmentwasput
inplace(presidedbyNajibMikati),afterthreemonths,thenewgovernmentwasformedby
FouadSiniora.
Parliamentpassedanamnestybillon18 July2005to freeSamirGeagea,the leaderofthe
Lebanese forces political party that had been imprisoned for the last11years for his war
crimes.GeageawasreleasedfromprisononJuly26,2005.
October31,2005:TheUNSecurityCouncilunanimouslyapproveda resolutiondemanding
SyriatocooperatewithaUNinvestigationintotheassassinationofLebanon'sformerprime
minister,threateningfurtheractionagainstDamascusifitcontinuestostonewall.
12July2006:WarwithIsraelbegins.
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The conflict continued until a United Nationsbrokered ceasefire went into effect in the
morningon14August2006,thoughitformallyendedon8September2006whenIsraellifted
itsnavalblockadeofLebanon.
The2007LebanonconflictbeganwhenfightingbrokeoutbetweenFatahalIslam,anIslamist
militant organization, and the Lebanese Armed Forces (LAF) on May 20, 2007 in Nahr alBared, an UNRWA Palestinian refugee camp near Tripoli. It was the most severe internal
fightingsinceLebanon's197590CivilWar.
November2007:PresidentEmileLahoudresignsandLebanonstayswithoutapresidentfor6
months.
May2008:ConflictinBeirutbetweenthegovernmentandtheopposition.
TheDohaAgreementwasreachedbyrivalLebanesefactionsonMay21,2008inDoha,Qatar
which resolved several issues including electing Michel Suleiman as president of Lebanon,
and forminganationalunitygovernmentcomposedof30ministersdistributedamong the
majority(16ministers),theopposition(11ministers)andthepresident(3ministers).
May25,2008:PresidentMichelSleimanwasswornintoofficeasPresidentofLebanon.
JuneOctober2009:ThepresentGovernmentpresidedbySaadHariri, sonof the lateRafic
Hariri,wasformedfollowinggeneralelections.
3. Explain your countrys judicial system. Be sure to answer the following questions:
Is the judicial system generally perceived to be impartial? Must disputes be resolved in the country?
Is there a political method of resolving disputes?
Are alternative methods of dispute resolution permitted?
How long does it take to resolve disputes?
Can foreign judicial decisions be enforced in the country?
Can decisions from the country be enforced outside the country?
Are there separate tribunals depending upon the subject matter of the case?
Are there different legal systems within the country or its political subdivisions?
Can the investor choose to be subject to the country's jurisdiction or not?
The Lebanesejudiciary system is structured in a way that makes it similar to the existing
systemsinWesterncountries.
JusticeissecuredattwolevelsbytheFirstDegreeCourtsandCourtsofAppeal.Alastresort
is theCourtofCassation (SupremeCourt)sitting inBeirut,comprisingofseveralchambers
andoneplenaryassembly.
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Thejudicialsystemisgenerallyperceivedasimpartial.
Disputescanberesolvedoutsidethecountry,ifthepartieschoosetosubmitthedisputetoa
foreigncourtandfreelychosetheapplicablelawexceptforcommercialagenciesthatshould
begovernedbyLebanese lawandsubmitted to theLebanesecourtsasperDecreelawno34/67ofAugust5,1967governingcommercialagenciesinLebanon.
Alternative methods of dispute resolution are permitted: disputes resulting from the
executionorinterpretationofcivilorcommercialcontractscanbesubmittedbytheparties
toarbitration.Thearbitrationclausemustbestipulatedinthecontractorinanaddendum.
The period of time necessary to resolve disputes depends on each case. It is generally
perceivedasalongprocedure.
Astotheenforcementofforeignjudgments,ajudgmentdeliveredbyaforeigncourtcanbe
enforced in Lebanon through an enforcement order (exequatur) issued by the Lebanese
judicialauthority.TheenforcementapplicationissubmittedtotheCourtofAppealofBeirut
andisgrantedtoforeignjudgmentssubjecttospecificconditions.Thereisnoreviewofthe
meritsinthecontextofsuchprocedure.
Courtsareorganizedaccordingtothesubjectmatterofthecase.Acommercialmatterwillbe
submittedtothecourtsittingincommercialmatters.Therearespecialcourtssuchasmilitary
courtsthatdealwithmilitaryissues,andreligiouscourtsthatdealwithfamilylawmattersin
accordance with the relevant religious laws. Inheritance matters for nonMuslims are
governedbycivillawsandsettledbycivilcourts.
Therearenodifferentlegalsystemswithinthecountryoritspoliticalsubdivisions.
4. Explain your countrys legislative system.
Laws are enacted by Parliament; bills may be prepared by the government. They are then
proposed to the Parliament to be voted. Parliament may enable the government for a
determinedperiodoftimetotakeDecreeLawsinparticularmatters.
D. Environmental Considerations
1. What is the public/government attitude toward environmental regulation?2. Explain any environmental regulations.
Lebanons environmental regulations are relatively recent. The Ministry of Environment
(http://www.moe.gov.lb/) was established by Law no. 216 of April 2, 1993. Such law was
laterreplacedbyLawno.690ofAugust26,2005thatredefinedtheroleandorganizationof
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the Ministry. The Ministry of Environments general duties are to formulate a general
environmentalpolicyandproposemeasuresforitsimplementationincoordinationwiththe
various concerned government administrations, to protect the natural and manmade
environments inthe interestsofpublichealthandwelfare,andtofightpollutionbytaking
preventiveand remedialaction.The ultimate longtermobjectivesof the Ministry are the
following:
Preparetheappropriatelegislativeframeworktoenforceenvironmentalpractices.
Initiateworkingplansandprogrammessettingtheaccurate indicatorsandstandards inenvironmentallyaffectedsectors(privateandpublic).
Launchingpublicawarenesscampaignsthroughcoreacademiccurriculaandthroughthedifferentaudiovisualmedia.
Impose application of Environmental Impact Assessment (EIA) on vital developmentalprojects,andsubstituteproblematicplanswithenvironmentallyfriendlyones.
EmpowerlocalNGOs'roleinthecivilsociety.
A number of laws, decrees, and ministerial decisions govern environmental matters. A
frameworklawfortheprotectionoftheenvironmentwasadoptedin1988andamendedin
2002 (Law 444 of July 29, 2002), which defines the basis and norms for environmental
protectionnotablyforwater,soil,useofchemicalsandresourcemanagementaswellas
institutional,administrativeandtechnicalaspects.
Lebanon has signed and/or ratified the following international conventions, treaties and
protocols:
2001 Stockholm Convention on Persistant Organic pollutants for adoption by the conference
of plenipotentiaries.
1999 Convention on Wetlands of International Importance especially as Waterfowl Habitat.-
Ramsar.
1994 United Nations Convention to Combat Desertification.-Paris.
1992 United Nations Framework Convention on Climate Change.-Rio de Janeiro.
1992 Convention on Biological Diversity.-Rio de Janeiro.
1992 Amendment to the Montreal Protocol on Substances that deplete the Ozone Layer.-
Copenhagen.
1990 Amendment to the Montreal Protocol on Substances that deplete the Ozone Layer.-
London.
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1989 Basel Convention on the Control of Transboudary Movements of Hazardous Wastes and
their Disposal.-Basel.
1987 Montreal Protocol on Substances that deplete the Ozone Layer.-Montreal.
1985 Vienna Convention for the Protection of the Ozone Layer.-Vienna.
1982 Protocol Concerning Mediterranean Specially Protected Areas.
1980 Protocol for the Protection of the Mediterranean Sea against Pollution from Land-based
Sources.-Athens.
1976 Convention on the Prohibition of Military or any other hostile use of Environmental
Modification Techniques.-Geneva.
1976 Protocol Concerning Co-operation in Combating Pollution of the Mediterranean Sea by
Oil and Other Harmful Substances in Cases of Emergency.-Barcelona.
1976 Convention for the Protection of the Mediterranean Sea against Pollution.- Barcelona.
1976 Protocol for the Prevention and Elimination of Pollution of the Mediterranean Sea by
Dumping from Ships and Aircraft.-Barcelona.
1973 International Convention for the Prevention of Pollution from Ships.-London.
1972 Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other
Matter.-London-Mexico city-Moscow-Washington.
1971 Treaty on the Prohibition of the Emplacement of Nuclear Weapons and other Weapons
of Mass Destruction on the Seabed and the Ocean floor and in the Subsoil.-London-
Moscow-Washington.1969 International Convention relating to Intervention on the High Seas in cases of Oil
Pollution Casualties.-Brussels.
1969 International Convention on Civil Liability for Oil Pollution Damage.-Brussels.
1954 International Convention for the Prevention of Pollution of the Sea by Oil.-London.
III. INVESTMENTINCENTIVES
A.
Explainany
export
incentives
or
guarantees.
Be
sure
to
answer
the
following
questions:
Aretheretaxincentivesforexports?
No.
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Ifso,aretheylimitedtocertaintypesofproducts?
N/A.
Isexportfinancingavailablefromgovernmentorprivatesources?
N/A. Ifso,whatformsoffinancingorguaranteesareavailable?
N/A.
Isthereanygovernmentalinsuranceforexports?
No.
Mustanationalbeaparticipant in theenterprise inorder for the investor tobenefitfromtheseincentives?
N/A.B. Explainanygrants,subsidiesorfundsyourcountryoffersforeign investors.Besureto
answerthefollowingquestions:
Aregrantsandsubsidiesrestrictedbythetypeofactivity?
Touristic,agriculturalandindustrialenterprisescarryingoutprojectsinLebanoncanbenefit
fromStatesubsidy,throughtheCentralBankofLebanon,ontheinterestoftheloansgranted
bybanksoperatinginLebanon,accordingtocertaineligibilitycriteria,aspertheCentralBank
basiccircularno.80dated2January2001.Smallandmediumsizedenterprises (SMEs)operating throughoutLebanon in the industry,
agriculture,tourism,traditionalcraftsandhightechnologysectorsmayobtainguaranteesto
the loans granted by banks operating in Lebanon from Kafalat SAL, a Lebanese financial
company established by the Lebanese government. Kafalat SAL is owned by the National
Institute for the Guarantee of Deposits (75%) and by fifty Lebanese banks (25%). Kafalat
guaranteed
loans
benefit
from
interest
rate
subsidies
financed
by
the
Lebanese
Treasury
and
administeredbytheCentralBankofLebanon.
Whatistheprocessforobtainingapprovalforthesegrantsorsubsidies?
Submit an application with the necessary supporting documents to the bank granting the
loanand/ortoKafalatSAL.
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Howlongdoesittaketoreceiveapproval?
Oncetheapplicationisreceivedalongwiththenecessarysupportingdocumentsevidencing
that the applicant meets the necessary requirements, the decision process to approve or
rejectanapplicationtakesuptofourweeks. Cantheinvestorreceiveloansfromthegovernmentorgovernmentalagencies?
No.
Mustanationalbeaparticipant in theenterprise inorder for the investor to receivethesegrantsorsubsidies?
TheinvestormustbeestablishedandoperatinginLebanon.
Iftheinvestorisalimitedliabilitycompany,allthepartnersmaybeforeigners.
Iftheinvestorisajointstockcompany,themajorityofthemembersofitsBoardofDirectors
mustbeLebanese.
However,iftheinvestmentprojectisgovernedbytheInvestmentDevelopmentLawno.360
dated August 16, 2001 as amended (regulating investment promotion of domestic and
foreignentitiesandaimingatencouragingLebanon'seconomicand socialdevelopmentas
well as enhancing its competitiveness), then thejoint stock company may be granted a
specialexemptionfromtheaboverequirementbyadecisionoftheInvestmentDevelopment
AuthorityinLebanonIDALprovidedspecificrequirementsaremet(Article174ofthesaid
Law).
C. Explainanynationaltaxincentivesforforeigninvestors.Besuretoanswerthefollowing
questions:
Aretheincentivesrestrictedbythetypeofactivity?Tax incentivesaregrantedby the InvestmentDevelopment Lawno.360dated August16,
2001asamended.Theyarerestrictedtoprojectsintheindustry,agriculture,agroprocessing,
tourism,
information
technology,
communications
and
media
sectors.
Aretheincentivesrestrictedbythedurationoftheactivity?
Theincentivesaregrantedinlightofseveralfactors,includingtheprojectsduration.
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Whatistheprocessofapplication?
The process of application consists of submitting an application with the necessary
supportingdocumentstoIDALwhowillevaluatetheprojectanddecidewhethertograntthe
incentivesavailable.
D. Explain any regional tax incentives open to foreign investors. Be sure to answer the
followingquestions:
Aretheretaxincentivesfortheinvestorthatexistonlyincertainregionsofthecountry?
TheInvestmentDevelopmentLawno.360datedAugust16,2001dividedLebanonintothree
investmentzones (A,BandC).The incentives for investmentprojectswillbebasedon the
categorizationoftheprojectwithinaparticularinvestmentzone.
Doestheinvestorneedtoreceiveapprovaltobeeligiblefortheseincentives?
Yes,fromIDAL.
Aretheincentivesrestrictedbythetypeofactivity?
The Investment Development Law no. 360 grants incentives to industry, agriculture, agro
processing,tourism,informationtechnology,communicationsandmediaprojects.
Aretheincentivesrestrictedbythedurationoftheactivity?
Theincentivesaregrantedinlightofseveralfactors,includingtheprojectsduration.
Whatdoestheprocessofapplicationinvolve?
Theprocessofapplication involvessubmittinganapplicationwiththenecessarysupporting
documentstoIDALwhowillevaluatetheprojectanddecidewhethertogranttheincentives
available.
IV.FINANCIAL
FACILITIES
1.Banking/FinancialFacilities
Whatkindoffinancialinstitutionsexist?
Commercialbanks
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Private banks (investment banks and long and short term credit banks) such asBanquedel'HabitatSAL(thehousingbank)
Branchesofforeignbanks
Foreignbanksrepresentativeoffice
Financialinstitutions
FinancialinstitutionestablishedbytheLebanesegovernment(Kafalat)
Branchesofforeignfinancialinstitutions
Leasingcompanies
Brokeragefirms
Branchesofforeignbrokeragefirms
Moneydealers
Musttheinvestormaintainabankaccountinthecountry?
No.
Whataretherequirementsforopeningabankaccount?
Therequirementsforopeningabankaccountaremainlythepersonal information(identity
and address), evidence of the source of money and identification of the economical
beneficiary,inaccordancewithapplicablelawsandregulationsonfightingmoneylaundering,
mainlyLawno.318dated20April2001.
Whataretherestrictions,ifany,ontheinvestor'suseoftheaccount?
Therearenoparticularrestrictionsontheinvestorsuseoftheaccountexceptforcompliance
withthelawsandregulationsonfightingmoneylaundering,mainlyLawno.318datedApril
20,2001.
Whatisthetypeoffinancialsysteminthecountry?
Thefinancialsystemisliberalwithfreetransferandexchangeofmoney.
Howisthebankingsystemstructured?
Thereare localbanksandfinancial institutionsandbranchesofforeignbanksandfinancial
institutions.TheCentralBankofLebanongrantslicensesfortheestablishmentofbanksand
financial institutions and the Banking Control Commission controls and supervises such
institutions.
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Isthereastockmarket?
Yes,theBeirutStockExchange.
Can
the
investor
receive
bank
loans?
Yes.
V.EXCHANGECONTROLS1.BusinessTransactionswithNationals,ResidentsorNonResidents
Howarenationals,residentsandnonresidentsdefined?
Thereisnolegaldefinition.NationalsmaybedefinedasthepersonswhoholdtheLebanese
citizenship.ResidentsarepersonshavingapermanentaddressinLebanon.
Arethererestrictionsonconductingbusinesswithnationals,residentsornonresidents?
No, except that conducting business with a resident of Israel or an Israeli national is
prohibited.
Aretherereportingrequirements?
No.
Cantheinvestorreceiveloansfromnationals,residentsornonresidents?
Yes,subjecttotheprohibitionofdealingswithIsraelinationalsorresidentsofIsrael.
2.InvestmentControls
Arethererestrictionsondirectinvestmentinthecountry?
The acquisition of real estate properties in Lebanon by foreigners, whether individuals or
legal
entities,
must
be
authorized
by
the
Council
of
Ministers
if
the
total
surface
area
acquired
exceeds3,000sqmeterswithinthewholeLebaneseterritory.
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Are there restrictions on indirect investments in the country? Must the investor make
declarationsregardingthenatureofhisinvestment?
Therestrictionsonindirectinvestmentsarethefollowing:
Themajorityof themembersof theBoardofDirectorsofajoint stockcompanymustbe
Lebanese.
Companiescarryingoutcommercialrepresentationactivities(DecreeLawno.34of5August
1967)aresubjecttothefollowingrestrictions:
(a) If the company is a partnership or a limited liability company, the majority ofpartners must be Lebanese nationals, and they must hold the majority of the
companyscapital.
(b) If the company is a joint stock company, its shares must be in the form ofregistered shares and the majority of its capital must be held by Lebanese
nationals. Also at least two thirds of its Board members must be of Lebanese
nationality.Inallcases,themanagementofthecompanymustbeentrustedtoa
Lebanesenational.
Jointstockcompanycarryingoutshippingagencyactivities:Halfofitscapitalmustbeheldby
Lebanese nationals. For limited liability companies, 51% of the capital must be held by
Lebanesenationals.
Companies wishing to publish political magazines (Law of September 14, 1962 regarding
printingmatters)aresubjecttothefollowingrestrictions:
a) Forlimitedliabilitycompaniesandpartnerships,allpartnersmustbeLebanesenationals.
b) For partnerships by shares, partners who are personally liable must be
Lebanese.
c) Forjoint stock companies, all shares must be held by Lebanesenationals or
Lebanesecompanies.
Joint stock companies runningapublicutilitymusthaveone thirdof theircapitalheldby
Lebanese
nationals.
Investorsdonothavetomakedeclarationsregardingthenatureoftheirinvestment.
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3.MoneyTransfer
Istherefreedeterminationofexchangerates?
Yes.
Arethererestrictionsonthetransferofmoneyintooroutofthecountry?
No,exceptforcompliancewithlawsandregulationsonfightingmoneylaundering(Lawno.
318dated20April2001.
Arethererestrictionsontheremittanceofprofitsabroad?
No.
Aretherereportingrequirements?
No.
Canhardcurrencybetakenoutofthecountry?
Yes.
VI.IMPORT/EXPORTREGULATIONS
1.CustomsRegulations
IsthecountryamemberofGATT?
Yes.
IsthecountryamemberoftheEEC?
No.However,on17June2002LebanonsignedinLuxembourgtheEUROMEDagreementwith
the
European
Union
and
its
members,
which
was
ratified
by
Law
no.
474
dated
12
December
2002.
Isthecountryapartytoaregionalfreetradeagreement?
In1997,LebanonsignedtheAgreementtoFacilitateandDevelopTradeamongArabStates.
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Lebanon has also signed bilateral agreements, such as the liberalization agreement of
LebaneseSyrian trade signed in February 1998 regarding the progressive liberalization of
tradebetweenthetwocountries.
DoestheCustomsDepartmentvaluethegoods?
Yes.
Howaregoodsclearedthroughcustoms?
FollowingthedeclarationofthegoodstoCustoms,thelatterverifiesitsvalidity,includingthe
inspectionofgoods;then,thedutiesaresetincompliancewithCustomstariffsorthetariff
providedforinapplicablelawsandregulations.Finally,thedutiesarepaidattheCustoms'
Treasuryagainstareceipt.
Are
there
applicable
tariffs?
Yes,inlinewiththeCustomstariffbook.
2.Exports
Arethererestrictionsonexports?
In addition to the prohibition of exporting to Israel, Lebanon operates export control on
goods on an itemby item basis. Some items areprohibited from being exported, suchas
weapons,
ammunitions,
narcotics
and
archeological
pieces
and
currencies,
while
export
of
otheritemsissubjecttotheauthorizationofdesignatednationalauthorities.Allsuchitems
aredetailedinascheduleestablishedbytheCustomsAuthorities.
Areexportlicensesrequired?
Exportofsomeitemsrequirespriorauthorization.
Arethereapplicableexportduties?
No.
3.ForeignTradeRegulations
Arethereforeigntraderegulationsontheimportorexportofgoodsinvolvedinthebusiness?
Yes.
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4.Imports
Areimportlicensesrequired?
Someproductsrequireanimportlicense. Arethereapplicableimportduties?
Yes.
Arethereapplicableimportquotas?
No.
Arethereapplicableimportbarriers?
AllimportsfromIsraelareprohibited.
The importationofsomefruitsandvegetables isforbidden inspecificseasonsanddatesto
protectlocalagriculture.
Apriorlicenseisrequiredtoimportsomeproducts,suchasceramicsanitaryware,insulated
wire,telephonewireandcoppercables.
5.ManufacturingRequirements
Must
the
product
contain
ingredients
or
components,
which
are
found
or
produced
only
in
the
country?
No.
Willtheimportationofcertaincomponentpartsbepermittedonlyiftheyaretobeultimately
incorporatedinafinalproduct?
No.
6.ProductLabeling
Are there applicable labeling or packaging requirements (e.g. multilingual notices, safety
warnings,listingofingredients,etc.)?
Theapplicablelabelingorpackagingrequirementsarethefollowing:safetywarnings,listing
of ingredients, production and expiry dates. The English and French language would be
accepted.
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VII. STRUCTURES FOR DOING BUSINESS
1. Governmental Participation- Will the government seek to participate in the ownership or operation of the entity (e.g.depending on the type of activity involved)?- If so, to what extent?- What is the investor's potential liability to partners, investors or others?- Are there restrictions on capitalization?- What are the investor's tax consequences? (see also Sections XII and XIII)
Lebanonenjoysawidelyliberalandopenlegalsystemforforeigninvestors,theymayfreely
dobusiness inLebanonandmayown localcompanies.Thegovernmentwouldnotseek to
participate in the ownership or operation of the entity, and there are no restrictions on
capitalization.
2. Joint Ventures
- Are joint ventures permitted?- If so, what is the registration or incorporation procedure?- How long do these procedures take?- What costs and fees are involved?- Must a national of the country or a related state, (e.g. the EEC) be a participant, manageror director?- What is the investor's potential liability?- Are there restrictions on capitalization?- What are the investor's tax consequences?
Jointventuresarepermitted,andtheyareestablishedbyprivateagreementssettingoutthe
rights and obligations of the parties. Deprived of legal entity, the joint venture is notsubmittedtotheincorporationorpublicationformalities.Consequently,eachpartnerdealing
with a third party is considered to be dealing in his own name and for his account. Such
partneristhereforepersonallyresponsibleforthecompanysdebts.
Thereisnoobligationforanationaltobeaparticipant,managerordirectorandthereareno
restrictionsoncapitalization.
3. Limited Liability Companies- Are limited liability companies permitted?- If so, how are they registered or incorporated?
- How long do these procedures take?- What costs and fees are involved?- Must a national of the country or a related state be a participant, manager or director?- Are there restrictions on capitalization?- What are the investor's tax consequences?
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ThelimitedliabilitycompanywasmadepossiblebyDecreeno.35dated5August1967.Itis
registered,asforanycompanywhoseheadofficeisinLebanon,attheCommercialRegister
oftheregionwheresuchheadofficeislocated.Registrationisrequestedwithinonemonthof
thecompanysformation.
Theregistrationproceduretakesapproximatelythreedays.
There is no obligation for a national to be participant, manager or director. There are no
restrictionsoncapitalizationbutthelimitedliabilitycompanymusthaveaminimumcapital
of LL 5,000,000 (approximately US $ 3,334) and it cannot be involved in operations of
insurance,airlines,transport,bankingandinvestmentoffundsandlocallegislationprohibits
thelimitedliabilitycompanyfromissuingnegotiableorregisteredcertificatesortransferable
securities,stocks,bondsorshares.
The limited liabilitycompany issubjecttothecorporations incometaxatthe fixedrateof
15%ofnetprofitsand toawithholding taxondividendsof10%.Expensesandchargesas
expresslydefinedbythelawaretaxdeductible.Thisrateiscutdowntohalfforthetaxlevied
on revenues earned by companies when they are generated from the construction or
developmentofbuildingsorhousingunitsforsaletothepublic.
Incorporationdocuments:
TheArticlesofAssociationsignedbythepartnersbeforeanotarypublic
orbeforetheHeadoftheCommercialRegister.
Anapplicationaddressedtothebankconcerningtheconsignmentof
thecapital.
Acertificateofthedepositissuedbythebank.
Aregistrationapplication.
Acertificateofregistration.
Acircular.
An
application
addressed
to
the
bank
concerning
the
release
of
the
capital.
An application for the appointment of an additional auditor (if the
capitalexceedsLL30,000,000).
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AnapplicationaddressedtotheMinistryofFinancetogivenoticeofthe
commencementofbusiness.
Costsandfees:
ForacapitalofLL5,000,000(approximatelyUS$3,334),whichistheminimumcapital:
Notarysfees:LL450,000(approximatelyUS$300).
Incorporationfees:(i)afixedfee:LL750,000(approximatelyUS$500),
(ii) a proportional fee of 3 (three per thousand) of the capital (LL
5,000,000x3 1000=LL15,000orUS$10fortheminimumcapital).
Thejudgesmutualfund:(i)afixedfee:LL375,000(approximatelyUS$
250), (ii)aproportional feeof1.5 (oneandahalfperthousand)of
the
capital
(LL
7,500
or
US
$
5
for
the
minimum
capital).
Stamps: LL2,000foreachoriginaldocument.
LL1,000foreachduplicate.
LL20,000fortheoriginalsignedArticlesofAssociation.
LL10,000fortheArticlesofAssociationduplicate.
TheregistrationfeeofaproxyattheBarAssociation:LL100,000.
The attorneys fees range between US $ 1,000 and US $ 3,000
dependingonthefirm.
4. Liability Companies, Unlimited- What are the forms of liability companies?- How are these companies registered or incorporated?- How long do these procedures take?- What costs and fees are involved?- Must a national of the country be a participant, manager or director?
Thelimitedliabilitycompany(SARL)inwhichthepartnersareliablefor
lossestotheextentoftheircontributiontothecapital.
Therearetwoformsofunlimitedliabilitycompanies.Theywillbedealtwithundergeneralandlimitedpartnerships.
Thereisanotherformoflimitedliabilitycompanies:thejointstock
company(SocitAnonyme).
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Jointstockcompanies(SocitAnonyme):
Costsandfees:
FortheminimumcapitalofLL30,000,000(approximatelyUS$20,000):
Notaryfees:LL660,000(approximatelyUS$440)includingthejusticefee.
Incorporationfees:LL1,000,000(approximatelyUS$665).
Thejudgesmutualfund:LL550,000(approximatelyUS$365).
TheotherfeesarethesameasfortheSARL.
Theregistrationproceduredoesnottakemorethanthreedays.
Onethirdofjointstockcompaniescapitalwhoseobjectistheoperationofapublicutility
mustbemadeupofregisteredsharesheldbyLebaneseshareholders.
Injointstockcompanies,themajorityofBoardmembersmustbeLebanese.
5. Partnerships, General or Limited- Are partnerships recognized or permitted?- Must a national of the country or related state be a partner?- If so, to what extent?- What costs and fees are involved?- What is the investor's potential liability?- What are the investor's tax consequences?
Partnershipsarepermittedandthereisnoobligationforanationaltobeapartner.
Costsandfeesinvolved:
Notaryfees:2(twoperthousand)ofthecapitalplusafixedfeethat
mustnotexceedUS$300.
Incorporationfees:LL1,000,000(approximatelyUS$665).
At
the
Commercial
Register:
AfixedfeeofLL750,000(approximatelyUS$500).
Stampdutyfee:3(threeperthousand)ofthecapital.
Thejudgesmutualfund:LL375,000(approximatelyUS$250)+
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1.5(oneandahalfperthousand)ofthecapital.
Thegeneralpartnership(socitennomcollectif,SNC)consistsoftwoormorepartnerswho
arejointlyresponsibleforthecompanysdebtsandobligations.
Everypartnerispersonallyliableforthepartnershipsdebts.Suchliabilityisjointandseveralandconsequentlycanbeenforcedagainstboththepartnershipsassetsandtheassetsofthe
individualpartners.
Limited partnership (socit en commandit simple, SCS) consists of two or more people
dividedintotwocategories:thegeneralpartner,whoisdeemedtobeatraderandisentitled
to takepart in themanagementof thebusinessand ispersonally liable for thedebtsand
obligationsoftheSCS.
The limitedpartner isnotdeemedtobeatraderand isnot liable forthedebtsoftheSCS
beyondhiscontribution.
Eachpartnerissubjecttoindividualincometax.Theactualincomeissubjecttotaxationafter
applyinganallowanceofLL3,000,000 for individuals,asupplementarytaxallowanceofLL
1,500,000formarriedtaxpayers,andLL300,000perlegitimatedependentchild.
6. Partnerships, Undisclosed- Do undisclosed partnerships exist?- If so, how are they formed?- What costs and fees are involved?- Must a national of the country or a related state be a participant, manager or director?- What is the investor's potential liability?- What are the investor's tax consequences?
Undisclosedpartnershipsare in the formof socitenparticipation.Please refer to the
informationprovidedinrelationtojointventures.
7. Sole Proprietorships- Can the investor be a sole proprietor?- How is the sole proprietorship registered or established?- How long does this process take?- What costs and fees are involved?- What is the investor's potential liability?
- Are there restrictions on capitalization?- What are the investor's tax consequences?
Therearenosingleshareholdercompanies.Soleproprietorshipsareintheformof
commercialestablishments(fondsdecommerce).Theownermustregisterasatraderat
therelevantRegisterofCommerceandregisterhisbusiness.Theownercontinuestobe
taxedonhispersonalincome.Thereisnocapitalization.
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8. Subsidiaries/Branches/Representative Offices- Can the investor establish a branch, subsidiary or representative office?- If so, how long does registration or incorporation take?- What costs and fees are involved?- What is the investor's potential liability?- Must a national of the country be a participant, manager or director?- Are there restrictions on capitalization?- What are the investor's tax consequences?- Are these tax consequences different than those of a local company?
Aforeigncompanymayconstituteorestablishabranchoranofficetocarryouttheactivities
ofitsparentcompany.AccordingtoDecreeno.16datedJanuary30,1926,andamendedby
Lawno.4180whichwasissuedonMarch7,1980,astatementmustbefiledwiththeMinistry
ofCommerceandEconomybeforethecompanycanopenoneormorebranchesinLebanon.
RegistrationtakesonemonthatmostandthecostsinvolvedareLL1,800,000(approximately
US $ 1,200). Additional registration fees are payable at the Registry of Commerce in the
amountofapproximatelyLL1,000,000(US$665),inadditiontoLL1,800,000forcompanies
subjecttoDecreeno.96.
Thelocalbranchmaycarryoutalltheactivitiesoftheparentcompany,exceptforrestricted
activitiessuchascommercialagencyactivities.
Representative Offices cannot carry out business. They must restrict their activities to
marketingresearchesandpromotion.
Thereisnoobligationforanationaltobeaparticipant,managerordirectorandtherearenorestrictionsoncapitalization.
BranchesandLebanesesubsidiariesofforeigncompaniesaresubjecttotaxationunderthe
sameconditionsasLebanesecompanies.Regardinglocalbranches,thetaxauthoritiesdeems
thatallamountstransferredtotheheadofficebythelocalbrancharedistributedprofitsand
thussubjecttothe10%tax(subjecttodoubletaxationtreaties).
9. Trusts and Other Fiduciary Entities- Are trusts or other fiduciary entities recognized?- If so, how are each defined?
- What are the legal consequences of a transfer of assets to a trust or fiduciary?- Can the investor be the grantor, trustee or beneficiary?
Trustsarenotrecognized.
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Lawno.520dated6June1996entitledDevelopmentoftheFinancialMarketandFiduciary
Contracts recognizedbanks, financialestablishmentsandotherestablishmentsauthorized
bytheCentralBanktoactasfiduciaryagents.
Thetransferofassetstoafiduciaryagentisatransferoftheassetspropertytothefiduciary
agentwhomustholdthefiduciaryassetsdistinctlyfromhispersonalassets.Theinvestorcanbethegrantororthebeneficiary.
VIII. REQUIREMENTS FOR THE ESTABLISHMENT OF A BUSINESS
1. Alien Business Law
- Is the business subject to any alien business law?
No.
- Are there registration or reporting requirements?
2. Antitrust Laws
- Do the entity's operations comply with anti-trust laws?- Are there filing requirements?
Therearenoantitrustlaws.
3. Environmental Regulations
- Is the business of the investor subject to environmental regulation? If so, are there added
costs involved (e.g. audit requirements)?
Forspecificbusinesses,environmentalregulationsapply,includingauditrequirements.
4. Government Approvals- Are government approvals required for the anticipated business?
No, subject to prior licensing for specific activities such as banking, insurance, tourism
activities, andrestaurants.
- If so, how long does this process take?
Itdependsuponthebusinessinvolved.
- What fees are involved?
Feesinvolveddependonthenatureoftheactivity.
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5. Insurance
- Must the enterprise carry insurance?
Theenterprisemustnotcarryoutinsurance.
- If so, what kind of risks must be insured?
- Is there a state monopoly on insurance?
ThereisnoStatemonopolyoninsurance.
6. Licenses/Permits
- Are licenses or permits required for the anticipated activity?
Activitieslikeinsurance,bankingandfinancialactivitiesrequirelicenses.
- If so, how does the investor apply for and receive the necessary license or permit?
TheinvestorhastoapplytotheconcernedMinistryorauthorityandsupplythedocuments
andinformationrequiredtoobtainthepermit.
- How long does it take to receive the license or permit?
Itdependsonthenatureoftheactivityandtheauthorityconcerned.
IX. OPERATION OF THE BUSINESS
1. Advertising- Are there restrictions on advertising?
AdvertisinginLebanonissubjecttolicensingandcontrol.
2. Attorneys
- Is it necessary to have local counsel?
Limitedliabilitycompaniesandjointstockcompaniesmusthavealegalcounsel.
- How can local counsel be found?
TheattorneycanbefoundthroughtheBarorthroughforeignembassiesinLebanon.
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How much are attorneys fees?
TheBeirutBarrecommendsthattheminimumyearlyfeesoftheattorneybesevenmillion
fivehundredthousandLebanesepounds(approximatelyUS$5,000).
3. Bookkeeping Requirements
- Must the investor keep local books of accounts?
Yes,theinvestormustkeeplocalbooksofaccounts.
- In what form must the investor keep accounts (e.g. GAP, in what language, etc.)?
Accountsmustbekept in linewithlocalaccountingstandardsandInternationalAccounting
Standards.
Accounting
books/records
and
accounting
documents
can
be
in
Arabic,
French
or
English.
4. Business Ethics/Codes
- Are there certain business ethics or codes which the investor must follow (e.g. GAAPfor accountants, etc.)?
No.
5. Consumer Protection Laws
- Are there consumer protection laws which apply to the investor's operations?
Yes there isaConsumerProtectionLawnumber659 issuedonFebruary4,2005,and that
becameeffectiveonMay10,2005.
6. Construction
- What are the costs of construction?
Aproportionaltaxisleviedoneachsquaremeteroftheproposedconstructiontobebuiltor
addedirrespectiveofthepurposeofuse,andoneachfloor.
Inaddition, there areamounts tobepaid for the useofMunicipalpublicdomainand for
allocationstopublicprojects.
Moreover,aproportionaltaxisalsoleviedtoestablishsewersandsidewalks.
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- Are permits required for construction?
All new constructions, renovations, reconstructions, restoration works of any kind in any
property
are
subject
to
a
building
permit.
- How is authorization to construct obtained?
Buildingpermitsaregrantedasperapplicablelawsandspecificrulesnotablythoserelatedto
urbanismandpublicsafety.
The building permits application is submitted along specific forms set by the Order of
EngineersandArchitects,isregisteredwithsaidOrderbytheresponsibleengineer,andthen
filedby theengineerattherelevantUrbanismBureau thatstudiestheapplicationwith its
enclosures,conductsthenecessarysurveyandcalculatestherelevantbuildingpermitsfees.
Afterwards,thefileistransferredtotheMunicipalityandthepermitisissuedbytheHeadoftheMunicipalityafterpaymentoftherelevantfees.
In areas where there is no municipality, the Urbanism Bureau transfers the file to the
Mohafazator Caemakamiah (heads of administrative regions) to have the building permit
issuedbytheMohafezorCaemakam.
InBeirutandTripoli,therearenoUrbanismBureaus,andthebuildingpermitsapplicationis
filedtotheMunicipality,transferredtotheadhocTechnicalBureauattheMunicipalityand
thepermitisissuedbytheHeadoftheMunicipality.
- How long does it take to receive authorization?
The relevantUrbanismBureaushould study the fileandgrant thepreliminaryapprovalor
motivatedrefusalwithinthefollowingdeadlines:
Two months as of the registration date of the relevant application, if the plot islocatedonthesideofaroadoronanyofthesidesofanapprovedplanning.
Orwithinsixmonthsasoftheregistrationdateoftherelevantapplicationiftheplotis subject toa planning, isadjacent to aplanningproject,or if thebuildingpermit
applicationinvolvestheconsultationoftheHighCouncilofUrbanismorotherpublic
authoritiessuchastheGeneralDirectorateforArcheologyortheGeneralDirectorate
forCivilAviation.
Other publicauthorities, such as the Civil Defense,Electricite du Liban, should alsogivetheirapprovalormotivatedrefusalwithinfifteendaysasofthedatearelevant
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demand is transferred to them by the Urbanism Bureau, otherwise they would be
deemedashavingimpliedlygiventheirapproval.
Then,therelevantUrbanismBureaushould(i)giveitsfinalapprovalwithintheabovetimeframes,(ii)advisetheapplicant,and(iii)transferthefileaftercalculatingthefees
totheMunicipality,theMohafazaortheCamakamiahasthecasemaybe,tohave
the building permit issued by the Head of the Municipality, the Mohafez or the
Camakam,afterpaymentofthefees.
- What fees are involved?
ThefeespaidtotheMunicipalityare:
1.5%ofthepurchasepriceforeachsquaremeterofland,ifsuchprice
doesnotexceedLL25,000,equivalentapproximatelytoUS$17.
2% of the purchase price for each square meter of land if such price
rangesbetweenLL25,000andLL100,000,orUS$17andUS$67.
1%of thepurchaseprice foreachsquaremeterof landexceeding LL
100,000,orUS$67
Apremiumequivalent to10%oftheabove fees isallocated topublic
projectssuchastheNationalMuseum(5%),publicparksandgardens,
andpublictoilets(5%).
- Apremiumequivalentto5%oftheabovebuildingpermitfeesispaidfortheuseofmunicipalpublicdomains.
- Moreover,a0.5% taxof thepurchaseprice foreach squaremeteroflandisleviedtoestablishsewersandsidewalks.
- Inaddition,thefollowingstampdutiesaredue:
2,000L.Lforeachsquaremeterforeachfloorprovided itdoesnotexceedLL250,000(approximatelyUS$165)foreachfloor.
1,000L.Lforeachsquaremeterforeachfloorsectionprovideditdoes not exceed LL 100,000 (approximately US $ 65) for each
floorsection.
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FeespaidtotheOrderofArchitectsandEngineers:
- 5%ofthebuildingpermitsfeespaidtotheMunicipality.
7. Contracts
- Can the investor freely enter into local contracts?
Yes,theinvestorcanfreelyenterintolocalcontracts.
- Can the contracts be governed by the law of another country?
Yes,thecontractscanbegovernedbythelawofanothercountry,butemploymentcontracts
shouldbemandatorilygovernedbytheLebaneselaw.
Moreover, the parties to an agency/exclusive distribution agreement cannot submit their
contracttoaforeignlawtogovernmattersspecificallyregulatedbytheDecreeLaw34/67of
August 5, 1967 governing commercial agencies in Lebanon which are considered of public
policysuchastheprovisionsgoverningtheterminationandnonrenewalcompensation.
8. Price Controls- Are there applicable price controls?
Generallynot,butpursuanttoarticle7ofDecreelawno73datedSeptember9,1983related
to thepurchaseand tradingofgoodsandproducts, forthesaleofgoodsandproducts for
whichthemaximumsalepriceorpercentageofthesaleprofitaredetermined,thesaleprice
maynotexceeddoublethecostprice.
Moreover, there are price controls mechanisms pursuant to antidumping laws, antifraud
regulations,andinrelationtosomefooditems.
9. Product Registration- Must the entity register its product?
No,butincertaincases,thedeclaration(andnotregistration)totheMinistryofEconomyand
Tradeofsomeproductsismandatory.
- If so, how is registration obtained?
- How long does the process take?
- Are there fees involved?
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10. Reduction or Return on Capital- Can capital be repatriated while the corporation is still ongoing?
Yes, subject to the capitalization requirements applicable to specific businesses such as
insurers,
banks
and
financial
services
companies.
11. Sale of Goods
- Are there restrictions on the manner, time or place of sale of goods?
Therearenorestrictionsassuch,butthemanner,timeorplaceofsaleofgoodsareregulated
bydifferentlawsandorganizedbyregulationsissuedbytheMinistryofEconomyandTrade.
12. Trade Associations
- Are there trade associations the investor can or must join?
Therearenotradeassociationsthatthe investormustjoin,buthecanjointheChamberof
CommerceandIndustry.
- If so, are there fees involved?
Thefeesareapproximately700,000LBP.
- Are there mandatory trade practices?
Therearenomandatorytradepractices.
X. CESSATION OR TERMINATION OF BUSINESS
1. Termination
- What are the tax consequences of terminating the business?
Alltaxesduebythebusinessmustbepaidupontermination.
- What costs are involved in termination?
Costs
involved
in
termination
depend
on
the
form
of
the
company
and
amount
of
the
capital
andthesizeofthebusiness.
- How long does it take to terminate the business?
Thedurationdependsonthecomplexityoftheprocedureregardingtheformandsizeofthe
company.
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- How is the investor's particular form of business treated in termination?
The procedure of termination is the same in principle, but in practice its length and
complexitydependontheinvestorsparticularformofbusiness.
- Can the business be terminated without government approval or intervention?
Yes,thebusinesscanbeterminatedwithoutgovernmentapprovalor interventionsavefor
somekindofactivitiessuchasinsurance,bankingandotherlegalentitieslistedintheCentral
Banklistssuchasfinancialinstitutions,brokeragefirmsetc
- What are the obligations toward creditors, employees and others upon termination?
Upontermination,creditorsmustbepaidbackandemployeesmustreceivealltheirduesand
compensation.Inthisrespect,employeesendofserviceindemnityispayabletothembythe
NationalSocialSecurityFundtowhomtheemployerpaidtherelevantcontributionsforeach
employeeduringhisemploymentperiod.
- What are the tax consequences of termination?
Thereare no specific tax consequences except thatall taxes that are due by the business
mustbepaidupontermination.
2. Insolvency/Bankruptcy
- What is the extent of the investor's liability in the event of insolvency or bankruptcy?
Theextentoftheinvestorsliabilityintheeventofinsolvencyorbankruptcydependsonthe
formofthecompany:ifitisapartnership,hewillberesponsibleonhispersonalassets;ifitis
ajointstockcompanyoralimitedliabilitycompany,hewouldnotberesponsiblebeyondhis
contributiontothecapital.
- What choices, if any, are available to the investor with regard to the restructuring ofthe business?
Therearenorestructuringoptionsprovidedforbylaw.
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XI. LABOR LEGISLATION, RELATION, AND SUPPLY
1. Employer/Employee Relations- What laws govern employer/employee relations?
The laws that govern the employer/employee relations are mainly the Labor Code of
September23,1946andtheSocialSecurityLawissuedbydecreeno.13955ofSeptember26,
1963,inadditiontotheWorkRelatedInjuryDecreeLawno.136datedSeptember16,1983.
- Are there obligations to train employees?
Theemployerhastheobligationtotrainemployeestotheprofession,artorcraftworkthey
werehiredfor.Attheendofthetraining,acertificateofabilityisdeliveredtotheemployee.
Suchobligationisnotstrictlyimplementedinpractice.
2. Employment Regulations- Must the investor hire nationals of the country?
Pursuant to the Ministerial Decision no. 94/1 issued by the Minister of Labor on May 24,
2008,certainemployeespositionsarereservedtoLebanesenationalsandthereforenowork
permitsaregrantedtoforeignemployeesforsuchpositions.
These positions relate to administrative and banking occupations and include managerial
positions,salesandmarketingrepresentatives,businessconsultants,computeroperatorsand
engineers,nursingandotherjobs,unlesstheforeignemployeesspecializationorexpertiseis
not
available
locally,
in
which
case
he
would
be
granted
a
work
permit
subject
to
certain
conditions(suchaspublishingajobofferinlocalnewspapers).
Inaddition,theserestrictionsdonotapplyto(i)foreigncitizenswhohaveaLebanesemother
oramotherofLebaneseoriginor(ii)whohavebeenmarriedtoaLebaneseformorethan
oneyearor(iii)whoareresidinginLebanonsincetheywerebornor(iv)whoaremanagersor
representativesofa foreigncompanyregistered inLebanonandprovidedthattheStateof
whichtheforeignerisacitizenallowsLebanesetocarryouttheworktheforeignerintendsto
performinLebanon.
Moreover,foreachforeignemployee,theemployermustemploythreeLebanesenationals.
Suchconditionisnotalwaysstrictlyapplied.
- Is there a minimum wage?
Yes.TheminimumwageisfixedbyDecreeatLL500,000(approximatelyUS$334).
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- Is there a maximum number of hours an employee can work each week?
UndertherelevantprovisionsoftheLebaneseLaborCode,themaximumworkinghoursfor
adults(menandwomen)is48hoursperweek.Thisdoesnotincludebreakperiods.
The
break
period
consists
of
an
hour
of
rest
for
male
employees
every
six
hours
of
work
and
forfemaleseveryfivehours.
Employeesshouldbenefitofaconsecutivebreakperiodofninehoursforevery24hoursof
work.Also,theymustbenefit,weekly,fromanuninterruptedbreakof36hours.
Moreover,employerscan, in certainexceptional circumstancesanddue tomajorbusiness
requirements, request from their employees to work for a maximum of 10 hours a day,
providedtheMinistryofLaborisinformedwithin24hours.
Overtimehourssalarymustexceedby50%theregularsalary.Iftheemployerhastowork
during the36uninterruptedweeklybreakmentionedabove,hehas the right to rest fora
similarperiod.AscheduleofworkinghoursshouldbenotifiedtotheMinistryofLaborand
displayedattheworkingplace.
Workinghourscanbeincreasedupto12hoursadaybydecisionoftheMinisterofEconomy
provided notice is given to Social Affairs Service within 24 hours (with 50% additional
paymentpereachadditionalhour).
- Is there a minimum number of vacation and sick days to be given?
Yes
there
is,
as
follows:
AnnualLeaves:
Everyemployee isentitledtoafullypaidannual leaveof15workingdaysprovidedhe/she
hasbeenemployedbythesameemployerforatleastoneyear.
Accordingtoconventionno.52oftheInternationallaborOrganizationonpaidannualleaves
andwhichhasbeenratifiedbytheLebaneseauthorities,theannualleavemustbeincreased
in proportion to the number of years of employment. The Ministry of Labor applies the
increasedleaveasfollows:
PeriodofEmployment Annualleave
From1to5years 15workingdays
From5to10years 17workingdays
From10to15years 19workingdays
Above15years 20workingdays
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SickLeaves:
Employeeswhohavebeenworkingforthesameentityforaperiodexceedingtheprobation
period(threemonths)areentitledtopaidsickleavesasfollows:
Employmentyears Fullsalary andHalfsalary
3monthsto2years month month
2yearsto4years 1month 1month
4yearsto6years 1month 1month
6yearsto10years 2month 2month
Above10years 2month 2month
Sickleaveisgrantedpursuanttoamedicalreport.Whenthesickleaveexceedsonemonth,
the
employer
is
entitled
to
reduce
the
employees
annual
leave
to
8
days
instead
of
15
days.
3. Hiring and Firing Requirements
- Must the investor employ a minimum number of people?
Thereisnoobligationontheemployertoemployaminimumnumberofpeople.
- Must the investor employ a minimum number of nationals?
Pleaserefertoourresponsetothefirstquestionofpart2above.
- Must certain positions in the company be held by nationals?
Pleaserefertoourresponsetothefirstquestionofpart2above.
- Are there rules to follow in hiring/dismissing personnel (e.g. notice)?
AccordingtotheLebaneseLaborCode,eachoftheemployersandemployeesareentitledto
terminatetheemploymentcontractentered intoforan indefiniteperiodoftime,provided
onegivestheotherpartywrittennoticeoftermination.The lengthofnotice isspecifiedby
law and cannot be reduced. It varies with the length of the duration of employment as
follows:
Priornotice Durationofemployment
1monthpriornotice Lessthan3yearsofemployment
2monthspriornotice 3to6yearsofemployment
3monthspriornotice 6to12yearsofemployment
4monthspriornotice Morethan12yearsofemployment
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Ifthecausesofterminationarenotstatedclearly inthenotice,theemployee isentitledto
asktheemployertoclarifythereasonsforthedismissal.Theemployersanswerwillenable
theemployeetodeterminewhethertofileanunfairdismissalclaimornot.
Theemployerisnotboundtohavetheemployeecarryonworkingduringthenoticeperiod.
Theonlylegalobligationontheemployeristopaytheapplicablewagesduringthattime(
payinlieuofnotice).
Moreover,theterminationnoticemustnotbeservedduringtheannualleave,thematernity
leave,thesickleaveandotherleavesprovidedforintheLaborCode,aswellastopregnant
employees. This restriction does not apply if the employee is hired by another employer
duringthesaidleaves.
Employmentcontractsentered into foradeterminedperiodof timecannotbe terminated
prior to their expiry date, except by mutual agreement between the employer and the
employee, and/or if such early termination is provided for in the contract and along the
provisionsofsuchcontract.
- Does the investor have an continuing obligation towards dismissed employees?
No,exceptforthesettlingalltheemployeesstatutoryadcontractualentitlements,in
additiontotheobligationofsettlingtotheNationalSocialSecurityFundthebalanceof
contributionsdueinfavortheterminatedemployeetotheEndofServiceIndemnityBranch
at
such
Fund.
4. Labor Availability
- Is adequate skilled or unskilled labor available for the anticipated business?
AdequateskilledlaborisavailablealmostforeverykindofbusinessinLebanon.
5. Labor Permits
- Are labor permits required?
Yes,laborpermitsarerequiredtoenableforeignerstoworkinLebanon.
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- If so, how are they obtained?
Permitsforforeignemployeesincludethefollowingformalities:
a Apreliminaryletterofapproval:A preliminary letter of approval is to be first delivered upon the employees and/or
employersrequestbytheMinisterofLabor.
The followingdocumentsmustbeenclosed tothepreliminary letterofapprovalsrequest:
Copyoftheforeignerspassportvalidforatleast18months,copyoftheemployersidentity
card, the incorporation documents of the employer if it is a legal entity, the employees
academiccertificateandCV,theregistrationcertificateoftheemployerifitisalegalentityat
theMinistryofLabor,adocumentsignedbytheemployerinwhichthislatterundertakesto
(i)declareandregistertheemployeeattheNationalSocialSecurityFundand(ii)toenterinto
an employment contract with the employee pursuant to which the salary and benefits
grantedtosaidemployeearespecificallydetermined.
b Priorauthorization:Aftergettingthepreliminaryletterofapproval,theforeignemployeemustobtainfromthe
MinistryofLaborapriorauthorization.Anapplicationformsignedbytheemployershouldbe
submittedtotheMinistryofLaborinthatpurposeenclosedwithabankguaranteefromthe
BanquedelHabitatamountingtoLL/1,500,000/orUS$1,000(theamountofsuchguarantee
is
refunded
when
the
work
permit
is
terminated
and
the
employee
leaves
the
country),
in
additiontootherdocumentssimilartothedocumentssubmittedforthepreliminaryletterof
approval.
TheMinistryofLaborstudiestheapplicationanddecideswhetherornottogranttheprior
authorization. If the area of specialization of the foreign employee can be covered by
Lebanesenationals,thepriorauthorizationwillnotbegranted.
c Laborvisa:Once thepriorauthorization isobtained, theemployermustapply to theSretGnrale
(NationalSecurityServices) fora laborvisa toenable theemployer toenter theLebanese
territory.SuchlaborvisaisstampedontheemployeespassportattheInternationalAirport
of Beirut. Specific documents, together with the prior authorization and a notarized
undertakingaddressedtotheSretGnralesigned inLebanonbytheemployer,mustbe
enclosedtothelaborvisaapplication.
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d Workpermit:OncetheemployeeenterstheLebanese territorypursuant to the laborvisa,theemployer
mustapply fortheemployeesworkpermit.Specificdocumentsshouldbeenclosed tothe
workpermitsapplicationsuchasanotarizedemploymentcontract,medicalinsurancepolicy,
medicaltests,etc.
e Residencypermit:Once the work permit is obtained, the residency permit is issued by the Sret Gnrale
subjecttothefilingbytheemployersoftherelevantapplicationanddocumentation.
Workandresidencypermitsaregrantedforaperiodofoneyearonlyandmustberenewed
yearly.
- How long does the process take?
Generally,theprocesstakesapproximatelythreemonths.
- What fees are involved?
Governmentalfeesforobtainingworkandresidencypermitsforaforeignemployeecanbe
summarizedasfollows:
- US$1,000:Bankguarantee.- US$400:Priorauthorizationfee.
- US
$
150:
Labor
visa
fee.
- US$1,200:Workpermitfee.- US$1,200:Residencypermitfee.- US$150:Insurancepolicycosts.- US$350:Stampsandsundries.- Inadditionto3stampdutyand2notarizationcostsincludingthebarsfees
calculatedproratatothesalary.6. Safety Standards
- Are there safety codes which must be followed?
Yes, Decree no. 11802 dated January 30, 2004 regulates and organizes professional
prevention, safety and health. In addition, there are different and multiple safety and
preventionrulesrelatedtospecifictypesofactivities.
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7. Unions
- Are unions recognized?
Yes, syndicates and their unions are recognized under Lebanese law. They are formed
pursuanttoalicensebytheMinistryofLabor.
- What are the unions in the investor's business?
Syndicatesandunionsaimatprotecting,encouragingandimprovingtheprofession,aswell
asdefendingtheinterestsofthemembers.
- What are these unions' political affiliations, if any?
Unionsandsyndicatesareprohibitedfromhavingpoliticalaffiliations.
- Is there an obligation on the part of the employer to organize unions?
No.
- Are there mandatory collective bargaining agreements for the business involved?
TherearecollectivebargainingagreementsinseveralsectorsinLebanon(suchasthebanking
sector).
Thereisnoobligationtohavesuchagreements,butonceacollectivebargainingagreementis
made, it can be extended to all the employees of the business by decision of Minister of
Laborpursuant toa favorableproposalof theHigher CommitteeFor CollectiveBargaining
Agreementsprovided for intheLaborCode. Inthatcase, itbecomesmandatory forallthe
employeesandemployersofthesamesector.
XII. TAX ON CORPORATIONS
1. Allowances
- What are the major allowances (e.g. capital cost depreciation)?
N/A.
- What are the major deductible items?
Thetaxappliestothenetincome;therefore,expensesandchargesaredeductiblefromthe
gross income,suchascostsofgoodsandmerchandise, leasesofshopsandoffices,salaries
andwagesofemployees,interestofloansenteredforbusinesspurposes,etc.
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- What are the major expenses that are excluded from deductibility?
N/A.
2. Calculation of Taxes
- How is the taxable base determined?
Tax is leviedon thenet incomegeneratedduring thepreviousyear.Thenet income is the
wholeturnoverofthetaxpayerafterdeductingallchargesandexpensesdeterminedbythe
law.
Therearethreetaxassessmentmethods:
Theactualprofitmethod(mainlyforjointstockcompanies,limitedliabilitycompaniesandpartnershipslimitedbyshares).
Thelumpsumprofitmethod,and
Theestimatedprofitmethod.
3. Capital Gains
- What are the federal or national tax rates on capital gains?
The(national)taxoncapitalgains(namedtaxovermoveableassetsreturns)is:10%
- What are the regional or state taxes on capital gains?
N/A.
- What are the municipal or local taxes on capital gains?
N/A.
4. Filing and Payment Requirements
- When must the corporation file its tax return, if any?
Forjointstockcompanies,limitedliabilitycompaniesandpartnershipslimitedbyshares(for
active partners) the tax return should be filed before the 1st of June of each year. For
sleepingpartnerships,thetaxreturnisfiledbeforethe1stofApril.
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- When must the corporation pay its taxes?
Thecorporationmustpayitstaxeswhenfilingthetaxreturn.
- Are taxes paid in installments or annually?
Theincometaxispaidannually.
5. Miscellaneous Taxes Due
- Is there a tax on capital?
BesidesthetaxoncapitalgainsmentionedunderSectionXII(3)above,thereisnospecifictax
onthecapitalofacorporation.There isa3stampdutyonthecapitalthatappliesupon
incorporation
of
a
company
and
its
capital
increases.
ForHoldingcompanies,thereisataxoncapitalpleaserefertoSectionXII(10).
- Is there a business license tax?
No.
- Is there an apprenticeship tax?
No.
- Is there a training tax?
No.
- Are there other taxes?
Companiesthataresubjecttotheactualprofitmethodmustreassesstheirfixedassetsevery
fiveyears.Incaseofbetterment,a10%taxapplies.
Also, a 15% betterment tax applies in case of a gain generated from the assignment of a
companysfixedassets.
Thereisalsothestampduty:
On contracts (on each original copy), deeds, undertakings to pay, and other specific
documents:3
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53
Oncommercialbills:1.5
- What are the filing and payment requirements?
The
filing
is
submitted
by
any
representative
of
the
company
in
question.
The
calculation
of
thetaxiscarriedoutbyacertifiedaccountant.
6. Registration Duties
- Are there registration duties due upon the incorporation of a company?
Yes,thereareregistrationdutiesdueuponthe incorporationofacompany.Pleasereferto
SectionVII.
- Are there registration duties due upon an increase in capital?
Yes.PleaserefertoSectionVII.
- Are there registration duties due upon the transfer of the company's shares?
Yes, thereare registrationdutiesdue upon the transferof the sharesofa limited liability
companybecausethetransferofsharesmustbedonepursuanttoanotarizedsharestransfer
agreementthatisregisteredattheCommercialRegister,whichisnotthecaseforthetransfer
ofsharesofajointstockcompany.
- Are there registration duties due upon a transfer of corporate assets?
Yes,thereareregistrationdutiesdueif
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