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Choose your Business Structure

The next step is to choose the legal structure for your business. You will need to look at the advantages of each type of legal structure and we will help you choose the structure that best suits your needs.

  

The following table sums up the different types of legal structures commonly used:

 

CHOOSE YOUR BUSINESS STRUCTURE

 

Do you need help to choose the right legal structure? Do not hesitate to contact us to set a meeting with our legal advisor for free.

 

The most common types of company structures for local and foreign investors alike are:

JOINT STOCK COMPANY (S.A.L)

A Lebanese Joint Stock Company is governed by Decree-Law No 304 of January 24, 1942 and its amendments and is commonly referred to in Lebanon as S.A.L. An SAL is constituted amongst shareholders who are only liable to the extent of their contribution in the capital of the company 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 registered office in Lebanon.

 

IN BRIEF

 

  • Capital: minimum of LBP 30,000,000 divided into negotiable instruments, the shares
  • 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
  • Liability of the shareholders: liable to the extent of their contribution in the capital of the company
  • Shareholders contribution: can be in-cash and/or in-kind contributions:
    • if in cash, 1/4 of the capital may be paid at subscription
    • if in-kind contributions must be fully delivered at the time of subscription
  • Board of Directors: 3 to 12 members to be elected among the shareholders, majority of which must be Lebanese nationals. (Except if the object of the company includes commercial representation, two third of the board members as well as the Chairman-General Manager of the board must be Lebanese nationals)
  • Shares of guarantee: a minimum of shares to be held by the board members, to be determined in the company’s by-laws
  • All board members must own a minimum number of shares in the company (determined in the company’s by-laws) and the majority must hold the Lebanese nationality
  • Chairman-General Manager: to be elected among the board members, to represents the company and carries out the board’s decisions (the Chairman is also 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:
    • a principal auditor to be appointed by the shareholders; and
    • an additional auditor to be appointed by the court of commerce

LIMITED LIABILITY COMPANY (S.A.R.L)

A Limited Liability Company is governed by Decree-Law No 35 of August 5, 1967 and its amendments and is commonly referred to in Lebanon as S.A.R.L (this is the French equivalent of L.L.C). An S.A.R.L is founded by at least three partners with a maximum of twenty. The partners have a limited liability to the amount of their contribution in the capital of the company.

 

IN BRIEF

 

  • Capital: minimum of LBP 5,000,000 composed of social parts
  • Partners: at least three partners and a maximum of twenty with a limited liability, limited to the amount of their contribution in the capital of the company which may be in- kind or in-cash
  • Excluded activities: insurance, banking, finance and organized freight
  • 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
  • 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
  • A limited liability company is required to appoint 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

HOLDING COMPANY

A Holding Company is a special type of Joint Stock Company (enacted by Decree Law No 45 of June 24, 1983, and its amendments) that has a limited object and benefits from special tax treatment and other provisions.

 

IN BRIEF

 

  • Object: strictly determined by law
  • Capital: minimum of LBP 30,000,000 (Capital and the financial accounts can be held in a recognized foreign currency)
  • 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
  • Chairman-General Manager: exempted from work permits if he does not reside in Lebanon
  • Taxes: exempted from taxes on profits and 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 yearly retainer fees
  • Auditors: mandatory appointment of a principal auditor

 

Learn more about the Holding Company.

OFFSHORE COMPANY

An Offshore Company is a special type of Joint Stock Company (enacted by Decree Law No 46 of June 24, 1983, and its amendments) designed to be constituted in Lebanon but which operates only in the Lebanese free zone and/or outside the Lebanese territory.

 

IN BRIEF


  • Object: strictly determined by law
  • It can operate only in the Lebanese free zones or abroad
  • Capital: Minimum of LBP 30,000,000 (Capital and the financial accounts can be held in a recognized foreign currency)
  • 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
  • Chairman-General Manager and foreign employees are exempted from work permits provided 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
  • 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

 

Learn more about the Offshore Company.

BRANCH/REPRESENTATIVE OFFICE OF A FOREIGN COMPANY

For a Foreign Commercial Company to operate in Lebanon it must register as a ‘Branch’ or ‘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

 

  • Registration

Each of the Branch and the Representative Office must be registered at:

  • The Ministry of Economy and Trade and
  • Commercial Register
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 Ext:286
Fax
+961 1 981302