A Lebanese Joint Stock Company (JSC), governed by Decree-Law No 304 of January 24, 1942.

It is constituted amongst shareholders who are only liable to the extent of their contribution and who subscribe to negotiable instruments referred to as ‘shares’.

Lebanese joint stock companies must necessarily have the Lebanese nationality, and must by all means establish their headquarters in Lebanon.

IN BRIEF:

• Capital: minimum of 30,000,000 LBP
• Shareholders: minimum of 3
• No restrictions on foreign ownership of shares except for certain restricted sectors (mainly the public sector, media, commercial representation, real estate and other specially regulated industries)
• Board of Directors: 3 to 12 members, who are not required to be elected among the shareholders, One –third of board members must be Lebanese nationals
• Chairperson: yo be elected among the board members, to represent the company and to carry out the board’s decisions (the Chairperson is not necessarily the company’s General Manager)
• Transfer of shares: is not subject to stamp duties and is exempted from taxation (except in certain cases).
• Lawyer: mandatory appointment of a lawyer with annual retainer
• Auditors: mandatory appointment of one principal auditor by the shareholders for a period of (1) year only, subject to renewal for a maximum period of five (5) years

A Limited Liability Company is governed by Decree-Law No 35 of August 5, 1967 and is commonly referred to in Lebanon as S.A.R.L (this is the French equivalent of L.L.C).

The Law No.126 of 29/03/2019, has amended the Lebanese code of commerce, these amendments extended the concept of Limited liability company in accordance with the following principle:  The limited liability company is set up by one or more people who only bear the losses up to the amount of their contributions.

IN BRIEF:

• Capital: minimum of LBP 5,000,000 composed of social parts
• Partners: at least one partner (single partner) and a maximum of twenty with a limited liability based on their contribution in the capital of the company which may be in- cash or in-kind
• Foreign ownership: no restrictions on foreign ownership of parts except for certain restricted sectors that have specific requirements on the percentage of shareholding attributed to Lebanese nationals
• Excluded activities: insurance, economics, banking, finance, supplies, and organized freight
• Management: is managed by one or more managers who may not be partners

• Transfer of social parts is subject to:
  • the prior approval of partners representing three quarters of the capital
  • to stamp duties and to 10% capital gain tax
• Appointment of a Lawyer with yearly retainer fees is mandatory
• Appoint of an an Auditor only if:
  • the number of partners exceeds 20 (as a result of the death of any partner and transfer to its social parts to his heirs)
  • the capital amount equals 30 million LBP or
  • if a partner or partners representing 1/5 of the capital at least ask  for such appointment
• An SARL Company owned by a single partner may not be a single partner in another SARL company

A Holding Company is a special type of Joint Stock Company that has a limited object and benefits from special tax treatment and other provisions.

IN BRIEF:

• Capital: minimum of LBP 30,000,000 (capital and the financial accounts can be held in recognized foreign currency of the capital)
• Shareholders: minimum of 3. All shareholders can be non-Lebanese persons
• Board of Directors: 3 to 12 members, and can be entirely constituted of non-Lebanese persons
• Chairperson: to be elected among the board members, the Chairperson is not necessarily the company’s General Manager)
• Chairperson and/or General Manager: exempted from work permits if he does not reside in Lebanon
• Taxes: exempted from taxes on profits and distribution of dividends distribution
• Transfer of shares: is not subject to stamp duties and is exempted from taxation  (except in certain cases)
• Lawyer: mandatory appointment of a lawyer with a yearly retainer fees
• Auditors: mandatory appointment of a principal auditor

An Offshore Company is a special type of Joint Stock Company (enacted by Decree Law No 46 of June 24, 1983 and its amendments particularly the law no.85 dated 10/10/2018), and to the provisions of this statute. A Lebanese joint stock company (Off Shore) established in accordance with these articles shall be formed by a “Single Partner” who is the sole shareholder, but which operates only in the Lebanese free zone and/or outside the Lebanese territory.

IN BRIEF:

• Special case of Joint Stock Company
• Operates in the Lebanese free zones or abroad, but is constituted in Lebanon
• Does not require Lebanese Nationals as Board members and could be fully owned by non-Lebanese
• Capital: minimum of LBP30,000,000can be denominated in foreign currency
• Shareholders: minimum of 1. All shareholders can be non-Lebanese persons
• Board of Directors: 1/to 12 members, and can be entirely constituted of non-Lebanese persons
• Chairperson: may be a non-Lebanese national, he represents the company and carries out the board decision (the Chairperson is not necessarily the company’s General Manager)
• General Manager: may be a non-Lebanese national
• Work permits exemption: the Chairperson and the General Manager of foreign nationality and foreign employees residing outside Lebanon are exempted from work permits provided that the total annual balance sheet of the company is not less than one billion Lebanese pounds
• Taxes: exempted from taxes on profits and dividends distribution, contracts related to offshore activities are exempt from stamp duty
• Foreign employees’: partial exemption: 30%on income tax
• Transfer of shares: is not subject to stamp duties and is exempted from taxation (except in certain cases)
• Lawyer: the appointment of a lawyer is compulsory if the capital exceeds LBP 50 million
• Auditors: mandatory appointment of a principal auditor.
• Offshore companies are exempted from obtaining the National Security Fund (NSSF) discharge letter for the submission and registration at the commercial Register of the annual minutes of general assemblies’ meetings pertaining to the annual accounts

In addition to the above structures an existing local or foreign company can operate in Lebanon through a branch office and do promotion activities through a representative office.

IN BRIEF:

• Branch

A Lebanese Branch of a foreign company must have the same object as the mother foreign company and can engage in regular trade activities. The parent company must appoint one or more Branch manager to manage and run the Lebanese branch, as well as a lawyer on a yearly retainer basis.

• Representative Office

A Representative Office of a foreign company in Lebanon is restricted and limited in its activities to the promotion and marketing of the mother company’s services and products. A representative office may not engage in trade activities of any kind in Lebanon. The parent company must appoint one or more managers to manage and run the Representative Office, as well as a lawyer on a yearly retainer basis.