Grace Fattal
Senior Associate
Abousleiman & Partners Law Offices

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Commercial activities may be exercised in Lebanon:
1.
At an individual level
2.
At a shared level
3.
Through agencies representing foreign companies

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Request
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ID
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Address
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Commercial Circular
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Fees: approx LBP 1,250,000

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Registration as a merchant is a prerequisite
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Request
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Address
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Social Security Discharge
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Fees: approx LBP 1,350,000

1.
Limited Liability Company (SARL)
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Minimum Capital: LBP 5 M
Minimum Partners: 3
They can all be foreigners
Manager: Appointed in bylaws or by partners
Liability of partners: Limited to participation

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Transfer of Parts:
Free among partners only
Transfer to third party is subject to company’s preemptive right, failing which that of the partners
Approved by partners representing at least threequarters of the company’s capital
Social Security Discharge for each transfer of parts
Notarized – 3 per mil stamp duty

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Auditors: Not - mandatory unless:
Capital exceeds LBP 30 M
Required by partners representing 1/5 of capital
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Tax: 15% income tax - 10% capital gains
Costs: Approx US$ 1,800

2. Joint-Stock Company (SAL)
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Minimum Capital: LBP 30 M
Minimum Shareholders: 3
Directors: Appointed by General Assembly
Must be shareholders
Majority must be Lebanese.
Chairman-GM: appointed by BOD
General Manager: Not Mandatory

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Liability of Shareholders: Limited
Transfer of shares:
Free or subject to preemption rights
Exempt from notarization and stamp duty
Auditors: Principal/Additional
Tax: 15% income tax - 10% capital gains
Costs: Approximately US$ 2,200

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3. Holding Company
SAL - Restricted in object
No nationality requirement for Board Members
Tax: progressive
6% for capital ≤ 50,000,000 LBP
4% for capital ≤ 80,000,000 LBP
2% for capital > 80,000,000 LBP

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Exemption from tax on capital gains
Exemption from stamp duty
Tax on royalties (10%), interest on loans granted to subsidiaries (10%), management fees (5%)

4. Branch
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License from the MOET
Unit of Parent Company
Taxes: 25% of income derived in Lebanon

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5. Representative Office for Marketing Purposes
License from the MOET
No capacity to carry out commercial activities
No taxes

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In the form of SAL
Object limited to transactions outside Lebanon
No nationality requirement for Directors. Foreign
CGM non resident is exempted from work permit
Bank guarantee: LBP 100,000
Tax: LBP 1 M
Exemption from tax on capital gains
Exemption from stamp duty
Exemption from tax on interests generated by loans

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Requirements relating to an SARL Company:
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Majority of Lebanese partners
Majority of capital owned by Lebanese
Manager must be Lebanese
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2. Requirements relating to an SAL Company:
Majority of capital must be owned by Lebanese
Two thirds of board members must be Lebanese
Chairman and General Manager must be Lebanese

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Restrictions for the acquisition of more than
3,000 sqm
1. SARL:
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All partners must be Lebanese
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No transfer of parts to non-Lebanese entities
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2. SAL
Shareholders must be either Lebanese individuals or
Lebanese companies whose respective By-laws prohibit share transfers to non-Lebanese entities

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1.
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SAL
Bylaws
Bank Account
Constitutive General Assembly
First Board of Directors
Commercial Circular
Address
Fees
Certificate of Incorporation

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2
. SARL
Similar to SAL. However:
No Constitutive General Assembly.
No Board of Directors
Separate request by manager to appoint legal counsel
Manager appointed by GA or in Bylaws
No stamp duty on capital

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3 . Branch
1.
Bylaws
Corporate resolution resolving to:
Open a branch in Lebanon
2.
Appoint a branch manager
Clearance certificate by the Israeli Boycott office
Identification documents of branch manager
Address
Incorporation costs: 3,300,000 L.B.P

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Corporations:
By-laws, Commercial Registry certificate
Notification from the MOET re-foreign companies
Address
Liberal professions and private business concerns:
Commercial registry certificate, if any
ID
Practice permit or order membership card
Address

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Territoriality principle
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Income tax subdivided into 2 categories:
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2.
Tax on the income of physical persons
Tax on the profits of companies

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1. Individual Enterprises – 5 tranches
4% on profit ≤LBP 9 M
7% on profit between LBP 9 M and LBP 24 M
12% on profit between LBP 24 M and LBP 54 M
16% on profit between LBP 54 M and LBP 104 M
21% on fraction of profit exceeding LBP 104 M
2. Companies: 15% profits and 10% capital gains

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Progressive tax:
2% on income ≤ LBP 6 M
4% on income between LBP 6 M and LBP 15 M
7% on income between LBP 15 M and LBP30 M
11% on income between LBP30 M and LBP 60 M
15% on income between LBP 60 M and LBP 120M
20% on income exceeding LBP 120 M

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Withholding tax of 7.5% for services
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Withholding tax of In sum 2.25% for commercial and manufacturing activities

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As of February 1 st , 2012:
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Official monthly minimum wage is 675,000 LBP
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Minimum wage for daily workers is 30,000 LBP

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Lebanese Worker:
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Employers fills a form at the MOL reflecting the name of the employee to be hired
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In the event the entity has more than 15 employees, a copy of such entity’s internal regulations must be provided to the MOL
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Foreign Worker
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Work permit
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Categories of work permit
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Employer work permit v/s employee work permit
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Negative list of Ministry of Labor
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General Police Formalities

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Employment triggers NSSF registration
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Registration of employer with the NSSF should be made within 15 days from the date of employment
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Employer must declare to the NSSF any termination of employment within a period of 15 days from the date of such termination

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Sickness and maternity branch
7% of salary ceiling of LBP 1,5 M - employer
2% of salary ceiling of LBP 1,5 M - employee
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Family Allocation Branch
6% of salary ceiling of LBP 1,5 M - employer
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End of Service Indemnity Branch
8.5% of salary and other benefits - employer

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1. Lebanese Citizens
2. Expatriates: work permit is a prerequisite
If French, Belgian, Italian or British contributions for all the branches must be paid and employees benefit from all these 3 branches
Citizens of other foreign countries: the employer pays family and medical contributions but no ESI contribution and the employees do not benefit from any of the 3 branches

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Law Governing Commercial and Industrial
Property dated January 17, 1924. Amended by the
Law issued on December 31, 1946
Protection of Literary and Artistic property
(Copyrights Law). Law No. 75/99 Issued on April
13, 1999
Patent Law. Law No.240 on August 7, 2000 www.economy.gov.lb