I want to
apply for IDAL’s incentives
know if I qualify for IDAL’s incentives
know what are the steps to open a business
know what are the licenses and permits needed to open a business
know more about Investment Opportunities in Lebanon
operate in Lebanon
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FAQ
Doing Business in Lebanon
Do I need a permission/ license to invest in Lebanon?
No permission is required to invest in Lebanon. In fact, there is no investment law regulating the process of foreign investment in Lebanon or any legislation requiring foreign investors to obtain approval from the Lebanese authorities before embarking on an investment project in Lebanon. Any investor of any nationality is free to carry out any project in accordance with the system of law.
Is it easy to establish a company in Lebanon?
Yes. Due to the easy procedures and the absence of administrative obstacles (except in cases of established companies in banking, finance and insurance), it is easy to establish a company in Lebanon and it usually takes less than one week. Foreign companies can operate through local branches after obtaining a permission from the Ministry of Economy.
What are the restrictions imposed on foreigners?
Restrictions on foreign investments are very few, all economic sectors are open to foreign investments, except those related to weapons and media, and in some cases real estate ownership and some types of activities related to national security. Foreigners have also the right to participate in public tenders without the need for a local partner.
Is it allowed to transfer funds from Lebanon and vice versa?
Yes it is allowed. It is a one of the main points highlighted in the International Financial Agreement. Complete funds movements from Lebanon and vice versa are acceptable. Currency switch can be executed without any restrictions and while maintaining banking secrecy; which cannot be lifted, unless in exceptional cases.
What is the average tax rate?
The LLC is subject to a 15% tax on income on its net profit. The tax on the distribution of dividends is 10%, and is applied if such distribution is executed.
Are there any incentives for investment?
Yes, investment incentives are available from various institutions. Details can be found on our "Investment Incentives" page.
What kind of investment opportunities does Lebanon offers?

Lebanon provides a wide range of potential and viable sectors to invest in, mainly industry, agriculture, agro-food, tourism, information, information technology, technology, telecommunication and the media. Details can be found on our "Sectors in Focus" page.

How can I get a work permit?
In order to obtain a work permit, a request must be submitted to the Ministry of Labor and Social Affairs. The required documents vary if you are an employer or a foreign employee. In any case, the public institutions provide all the required information. The process of obtaining work permits can be facilitated through the consolidated office to pursue licenses. For more information download our Step by Step Guide to Licenses and Permits in Lebanon.
Are there any guarantees for investment?
Yes. The Lebanese Constitution guarantees and protects individual property. Several institutions national and international exist to safeguard investments such as, the National Institution for Investment Guarantee (NIGC), the Inter-Arab Investment Guarantee Corporation (IAIGC), the French company to guarantee Foreign Trade (COFACE), the European Investment Bank (EIB), and the Multilateral Investment Guarantee Agency (MIGA) and other secure investments against non-commercial risks. Note that the National Investments Guarantee Corporation (NIGC) is a state-owned company that covers non-commercial risks.
Is there any dispute resolution mechanism?

Yes. Lebanon provides a legal framework to secure the rights of Lebanese and non-Lebanese investors. Moreover, an arbitration center belonging to the Lebanese Chamber of Commerce was established and it has a similar regulation to the Chamber of Commerce in France.

Additionally, Lebanon signed the charter of the 1958 New York private international arbitration.

Can a Foreign investor open and operate with a 100% LLC company or a Lebanese shareholder is needed? Would it be possible to obtain a work permit? Or is it required to involve a Lebanese business partner? Any alternative?

Foreign investors can fully own a Limited Liability Company in Lebanon in all sectors except those related to weapons and the media, and in some cases real estate ownership and some types of activities related to national security.
The minimum capital required is 5 Million Lebanese Pounds (equivalent to approximately USD 3,300). The Articles of Association should be signed by three partners at least.
Please note that if a foreign partner will be the manager of the company, he/she should apply for a work permit where the following conditions should be met:

  • The manager share in the capital should not be less than 100 Million Lebanese Pounds (equivalent to approximately USD 66,600).
  • The company should hire 3 Lebanese in the company and to register them at the National Social Security.
  • The activity of the company should not be in trade, weapons and media

As an alternative, a foreign investor can set up a branch office and appoint himself/herself the owner as a manager of the branch in Lebanon. In this case, the manager will apply for a 1st category work permit that is easily provided.
As for the tax rates, the fees will be applied to the branch office’s corporate income in Lebanon.

Which one of the legal structures is the most appropriate so that foreign shareholders can possess a maximum of shares?
The best legal structure is a Limited Liability Company LLC, which can be fully owned by a non-Lebanese. As for a joint-stock company SAL, the majority of shares could be owned by foreigners but the majority of the board should be formed by Lebanese (3 to 12). Note that each board member should hold at least the number of guarantee shares mentioned in the articles of association (it can be 1 share over 10000 as an example). The company can also operate with a direct branch office, which will be managed by a manager who can be either Lebanese or non-Lebanese. In the latter option, the company will be governed by the country of origin law.
Are Lebanese products exempted from VAT when exported?
Yes. Article 19 of law no. 379 drafted in December 14, 2001 regulating VAT in Lebanon, exempts the export of Lebanese goods and merchandises from VAT.
How to incorporate a branch in Lebanon if the company is registered in a country that has no embassy presence in Lebanon?

Administrative papers should be legalized by the General Honorary Consul in Lebanon. The documents should be translated to Arabic by a sworn translator either in the country of origin or in Lebanon and duly legalized. The decision of opening the branch in Lebanon should comprise the following points: 

  • The activity of the branch in Lebanon (excluding banks, insurance, air transport…).
  • The name of the manager and his authoritative powers in Lebanon especially before public authorities and banks.
  • A statement that the fees of the branch in Lebanon shall be supported by the company in the country of origin
What are the funding alternatives in Lebanon?

Financial Institutions in Lebanon offer a range of financial incentives and facilities to help companies set up and expand their businesses, through various government agencies, publicly run institutions or private institutions. For a detailed list please check our "Loans and Other Facilities" page.

What are the establishing procedures, application process, required time and fees to operate in Lebanon?

A foreign company can establish directly a branch in Lebanon without the need of setting up an independent entity. The branch office can directly execute the objectives of the company and undertake any commercial and production activities and it is subject to taxation on its income. As for the representative office, its role is limited to public relations and marketing, it cannot undertake any activity that generates income and it is exempted from tax on income.

 


Documents
 

Conditions

Reference

Application

  • Signed by the Branch Manager or Representative office Manager or Agent
  • Its subject setting up a branch or representative office through the Branch Manager or the Agent/Attorney
  • Concerned Party

Articles of Association of the foreign company

  • Certified by
  • Commercial Register at country of origin.
  • Lebanese Embassy at country of origin and,
  • Lebanese Ministry of Foreign Affairs

 

  • Translated to Arabic
  • Certified
  • Sworn Interpreter
  • Ministry of Justice

Resolution of a Board of Directors or General Assembly or any relevant authority

  • Setting up a Branch or representative office of a Foreign company in Lebanon
  • Certified by
  • Lebanese Embassy at country of origin and,
  • Ministry of Foreign Affairs Lebanese

 

  • Translated to Arabic
  • Certified
  • Sworn Interpreter
  • Ministry of Justice

Resolution of a Board of Directors as General Assembly or any Relevant authority

  • Appointment of a Branch Manager
  • Certified by
  • Lebanese Embassy at country of origin
  • Lebanese Ministry of Foreign Affairs

 

  • Translated to Arabic by
  • Certified by
  • Sworn Interpreter
  • Ministry of Justice

Power of Attorney

  • Certified by
  • Notary public in case it is effectuated in Lebanon
  • Mother company in case it is effectuated abroad

 

The relevant department shall study the application and should provide the applicants with its feedback in 7 days max. Once the requirements are fulfilled, the fees should be paid including the fees of publishing the “notice of acknowledgement” that will be issued by the ministry at the official gazette.

 

The flat fee for registration is: /1.800.000/LbP. (App. 1.200 US$). The cost for the publication in the Official Gazette depends on the space needed for the “notice” . Usually the publication fees reach 200$ max.  in addition to the fees for translation and legalization.

 

After the “notice” is granted by the Ministry of Economy and Trade, the branch or the representative office could be incorporated at the Trade Register (recommended step). The concerned party should submit to the Trade Register the “notice” and a certified-translated copy of the same documents submitted to the Ministry of Trade and Economy.

 

The time needed to accomplish the incorporation is three days.

 

The fee to be paid in the Trade Register for the Mutual Fund of Magistrate is 900.000L.L. (App. 600 US$) and additional fees reaching 200$ as miscellaneous stamps and flat fees.

 

The income tax rate is 15% on the net profit (for branch office only). It should also pay the tax on the distribution of dividends set for (10%).

Can I open a representative office in Lebanon and what are the specificities that I should be aware of?

Yes you can open a representative office in Lebanon. You should be aware that a representative office is not subject to VAT since it does not generate any income on the Lebanese territory however it is subject to tax on salaries and wages and to the tax applied on non-residents (if any) mentioned in article 41 & 42 of the income tax law. It is mandatory for representative offices to get their accounts audited; it requires the services of an auditor to prepare the fiscal declaration, which should then be submitted to the tax department at the Ministry of Finance.

What are the fees that a foreign representative office need to pay to set up their business in Lebanon?

In addition to the registration fees of around USD 1,200 that you need to pay at the Ministry of Economy and Trade there is an additional USD 200-300 to publish the news in the Official Gazette. At a later stage, the representative office could be registered at the commercial register (not compulsory but usually done) for a maximum fee of USD 600 depending on the number of documents and original copies requested.

Attorney's fees and annual retainer fees are usually fixed by mutual agreement between both parties, noting that the Beirut Bar Association has set in 2012 a reference fee of USD 2700 for the registration process and USD 6000 as a yearly retainer fee. Please note that those proposed fees are not obligatory, and could vary greatly between lawyers depending on the volume of the work and level of assistance needed. 

I am interested in exporting products from Lebanon. How do I go about doing this? What licensing is necessary and how much does it cost?
In order to export Lebanese products , you must first be registered as a merchant at the Trade Register in Beirut or any other district. This task is usually completed by an attorney so you might need to appoint one. To be registered costs around LBP 1,150,000 or around USD 760. As a second step, you must apply for membership and certification at the Chamber of Commerce, Industry, and Agriculture of Beirut (CCIAB) or any other regional subdivision. The fee attributed to this task is LBP 224,000 or around USD 150. For more information, visit the corresponding page on the Chamber’s website.
Is there any particular sector foreign investors cannot invest in?

Restrictions on foreign investment are very few; all economic sectors are open to foreign investments, except those related to weapons and media and in some cases real estate ownership and activities related to national security. Foreigners have also the right to participate in public tenders without the need for a local partner.

What are the restrictions for foreign ownership of Real Estate?

A foreigner whether an entity or an individual cannot own a real estate right in the territory of Lebanon without obtaining a prior authorization granted by virtue of a decree issued by the Council of ministers upon the request of the Minister of Finance (the “Decree”)

  • According to the law, is exempted from the Decree, the ownership by a foreigner of up to 3000 square meters in the whole territory of Lebanon. .
  • Notwithstanding the Decree, a foreigner cannot own more then 3% of the total area of Lebanon.
  • In each province, a foreigner cannot own more than 3% of its total area. However with respect to Beirut the total area owned by a foreigner should not exceed 10 % of its total area.
  • Normal lease right for more than 10 years needs the Decree.
  • The Decree shall be ineffective, if not acted upon during a period of 1 year as of its publishing in the Official Gazette.
  • When approval is granted, the building on the real estate should be constructed within a period of five years as of the date of registration with the Land registry (renewable once by the government).
Are there any special restrictions concerning Commercial representation?

According to the law, the exclusive representative must be a Lebanese national.

In case the company is a LLC, the majority of the partners must be Lebanese, the majority of the company’s capital must be held by Lebanese and the authorized signatories must be Lebanese.

In case the company is a joint-stock company, the majority of the company’s capital must be held by Lebanese, the director and authorized signatories should be Lebanese and 2/3 of the Board of Directors must be Lebanese. Finally the place of business must be in Lebanon.

How to protect an idea or sensitive information concerning your business?

Whether you wish to protect confidential information that is made known to a third party for business or marketing or other purposes, or protect a business idea in general there is adequate legal measures to consider.

In the first case, a non-disclosure or confidentiality agreement may be signed between the related parties. These types of agreement are well known and commonly used for business transaction in Lebanon.

In the second case, the Lebanese law provide for intellectual property (IP) protection. However it is less the idea and more the expression of it that is legally protected. In other terms, the idea should be tangible. Here we talk about copyright, trademark and Patent protection.

Dispute resolution mechanism

Arbitration in Lebanon is possible for commercial, civil and public contracts noting that in the latter case the arbitration clause or agreement should be approved by a decree issued in the council of the ministers.

Lebanon has ratified the convention of New York of 1958 relating to international arbitration and the Washington convention of 1965 relating to the settlement of investments disputes between governments and investors of other countries (ICSID).

Moreover the Law no. 360 of August 16, 2001 on the Promotion of Investments in Lebanon offers the possibility of resolving the disputes arising from Package Deal Contracts signed between the Government of Lebanon represented by IDAL and the investor by amicable settlement otherwise by arbitration according to the procedure mentioned in the Lebanese law or any international arbitration center.

What does the BSU do?

The BSU at IDAL will provide start-ups and innovators operating in the productive sectors with the support needed to operate and grow. The BSU will provide eligible start-ups with information, advice and licensing services.

Information and advice concerning pre-incorporation stage:

  • Advice on the most optimal type of legal structure.
  • How to register a company and the required documents.
  • Intellectual property and how to register a domain, trademark and patents.
  • Advice on registered address.
  • Information on Shareholder’s Agreement.
  • Other information relevant at that stage

Information and advice on how to run your company:

  • Information on the content of Non-Disclosure Agreement.
  •  Advice on Employment Agreements, Consultancy Agreements, etc.
  • How to operate changes in business (add or remove a director, change official address or company name).
  • Agreement with vendors, suppliers and prospective clients.
  • Information on Government registration opening up an office or shop or register as an exporter.
  • Information on future funding rounds.
  • Information on web or app related terms of service, privacy policies, disclaimers and service notices.
  • Other information relevant at that stage

And finally, licensing services in order to facilitate the procedures necessary to establish and register a company.

Get in Touch
Lazarieh Tower, 4th Floor, Emir Bechir Street, Riad El-Solh Beirut, Lebanon, P.O.Box 113-7251
Phone
+961 1 983306 / 7 / 8
Fax
+961 1 983302 /3
Investment Incentives Booklet
Setting up your business in Lebanon 2013