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Economy ProfileLebanon

Economy Pro le of Lebanon

Doing Business 2018 Indicators(in order of appearance in the document)

Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company

Dealing with constructionpermits

Procedures, time and cost to complete all formalities to build a warehouse and the quality control andsafety mechanisms in the construction permitting system

Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply andthe transparency of tariffs

Registering property Procedures, time and cost to transfer a property and the quality of the land administration system

Getting credit Movable collateral laws and credit information systems

Protecting minority investors Minority shareholders rights in related-party transactions and in corporate governance

Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes

Trading across borders Time and cost to export the product of comparative advantage and import auto parts

Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes

Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal frameworkfor insolvency

Labor market regulation Flexibility in employment regulation and aspects of job quality

About Doing BusinessThe Doing Business project provides objective measures of business regulations and their enforcement across 190 economies andselected cities at the subnational and regional level.

The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulationsapplying to them through their life cycle.

Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It providesquantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registeringproperty, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolvinginsolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankingsof economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking onthe ease of doing business, it does present the data for these indicators.

By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies andover time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks forreform; and serves as a resource for academics, journalists, private sector researchers and others interested in the businessclimate of each economy.

In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erentcities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommendreforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with othercities in the economy or region and with the 190 economies that Doing Business has ranked.

The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This years report covers 11indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, exceptfor 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan,Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the secondlargest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. Theproject has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to providean objective basis for understanding and improving the regulatory environment for business around the world.

The distance to frontier (DTF) measure shows the distance of each economy to the frontier, which represents the bestperformance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economysdistance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents thefrontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting theaggregate distance to frontier scores, rounded to two decimals.

More about Doing Business (PDF, 5MB)

Ease of Doing Business inLebanon

RegionMiddle East & NorthAfrica

Income Category Upper middle income

Population 6,006,668

GNI Per Capita (US$) 7,680

City Covered Beirut

DB2018Rank190 1

133

DB2018DistancetoFrontier(DTF)0 100

54.67

0 100

62.50:SaudiArabia(Rank:92)

60.58:Jordan(Rank:103)

56.72:RegionalAverage(MiddleEast&NorthAfrica)

56.22:Egypt,ArabRep.(Rank:128)

54.67:Lebanon(Rank:133)

41.55:SyrianArabRepublic(Rank:174)

DB 2018 Distance to Frontier (DTF)

Note: The distance to frontier (DTF) measure shows the distance of each economy to the frontier, which represents the best performance observed on each ofthe indicators across all economies in the Doing Business sample since 2005. An economys distance to frontier is re ected on a scale from 0 to 100, where 0represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190.

Rankings on Doing Business topics - Lebanon

Startinga

Business

Dealingwith

ConstructionPermits

GettingElectricity

RegisteringProperty

GettingCredit

ProtectingMinorityInvestors

PayingTaxes

TradingacrossBorders

EnforcingContracts

ResolvingInsolvency

1

28

55

82

109

136

163

190

Rank

143 142

123

102

122

138

113

140 134147

Distance to Frontier (DTF) on Doing Business topics - Lebanon

Startinga

BusinessChange:-0.28

Dealingwith

ConstructionPermits

Change:-0.13

GettingElectricity

Change:-0.02

RegisteringProperty

Change:-0.01

GettingCredit

Change:0.00


Change:0.00

PayingTaxes

Change:0.00


Change:0.00

EnforcingContractsChange:0.00

ResolvingInsolvencyChange:-0.61

0

20

40

60

80

100

DTF

78.17

59.66 60.07 59.93

40.00 41.67

68.2159.71

49.85

29.42

Starting a BusinessThis topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sizedlimited liability company to start up and formally operate in economys largest business city.

To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domesticallyowned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities andemploys between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Startinga Business considers two types of local limited liability companies that are identical in all aspects, except that one company is ownedby 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scoresobtained for each of the component indicators.The latest round of data collection for the project was completed in June 2017. See the methodology for more information.

What the indicators measure

Procedures to legal ly start and operate acompany (number)

Pre-registration (for example, name verificationor reservation, notarization)

Registration in economys largest business city

Post-registration (for example, social securityregistration, company seal)

Obtaining approval from spouse to start businessor leave home to register company

Obtaining any gender-specific permission thatcan impact company registration, companyoperations and process of getting nationalidentity card

Time required to complete each procedure(calendar days)

Does not include time spent gatheringinformation

Each procedure starts on a separate day (2procedures cannot start on the same day)

Procedures fully completed online are recordedas day

Procedure is considered completed once finaldocument is received

No prior contact with officials

Cost required to complete each procedure (% ofincome per capita)

Official costs only, no bribes

No professional fees unless services required bylaw or commonly used in practice

Paid-in minimum capital (% of income per capita)

Funds deposited in a bank or with third partybefore registration or up to 3 months afterincorporation

Case study assumptions

To make the data comparable across economies, several assumptionsabout the business and the procedures are used. It is assumed that anyrequired information is readily available and that the entrepreneur will payno bribes.

The business:- Is a limited liability company (or its legal equivalent). If there is more thanone type of limited liability company in the economy, the most commonamong domestic rms is chosen. Information on the most common form isobtained from incorporation lawyers or the statistical o ce. - Operates in the economys largest business city and the entire o cespace is approximately 929 square meters (10,000 square feet). For 11economies the data are also collected for the second largest business city.- Is 100% domestically owned and has ve owners, none of whom is a legalentity; and has a start-up capital of 10 times income per capita and has aturnover of at least 100 times income per capita. - Performs general industrial or commercial activities, such as theproduction or sale of goods or services to the public. The business doesnot perform foreign trade activities and does not handle products subjectto a special tax regime, for example, liquor or tobacco. It does not useheavily polluting production processes. - Leases the commercial plant or o ces and is not a proprietor of realestate and the amount of the annual lease for the o ce space is equivalentto 1 times income per capita.- Does not qualify for investment incentives or any special bene ts. - Has at least 10 and up to 50 employees one month af ter thecommencement of operations, all of whom are domestic nationals. - Has a company deed 10 pages long.

The owners: - Have reached the legal age of majority. If there is no legal age of majority,they are assumed to be 30 years old. - Are sane, competent, in good health and have no criminal record. - Are married and the marriage is monogamous and registered with theauthorities. - Where the answer di ers according to the legal system applicable to thewoman or man in question (as may be the case in economies where thereis legal plurality), the answer used will be the one that applies to themajority of the population.

Standardized Company

Legal form Socit a Responsabilit Limite (SARL)

Paid-in minimum capital requirement LBP 5,000,000

City Covered Beirut

Indicator LebanonMiddle East &North Africa

OECD highincome Overall Best Performer

Procedure Men (number) 8 7.7 4.9 1.00 (New Zealand)

Time Men (days) 15 18.6 8.5 0.50 (New Zealand)

Cost Men (% of income per capita) 42.0 18.7 3.1 0.00 (United Kingdom)

Procedure Women (number) 8 8.4 4.9 1.00 (New Zealand)

Time Women (days) 15 19.3 8.5 0.50 (New Zealand)

Cost Women (% of income per capita) 42.0 18.7 3.1 0.00 (United Kingdom)

Paid-in min. capital (% of income per capita) 42.3 9.9 8.7 0.00 (113 Economies)

FigureStartingaBusinessinLebanonandcomparatoreconomiesRankingandDTF


0 100

84.53: Egypt, Arab Rep. (Rank: 103)

84.40: Jordan (Rank: 105)

82.05: Regional Average (Middle East & North Africa)

80.43: Syrian Arab Republic (Rank: 133)

80.04: Saudi Arabia (Rank: 135)

78.17: Lebanon (Rank: 143)

Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores forstarting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators.

FigureStartingaBusinessinLebanonProcedure,TimeandCost

Procedures (number)

1 2 3 4 5 6 * 7 * 80

2

4

6

8

10

12

14

Time (days)

0

5

10

15

20

25

30

Cost (%

of incom

e per capita)

Time(days) Cost(%ofincomepercapita)

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list formen and women, the graph shows the time for women. For more information on methodology, see the Doing Business website(http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below.

DetailsStartingaBusinessinLebanonProcedure,TimeandCost

Applies to women only.

Takes place simultaneously with previous procedure.

No. Procedures Time to Complete Associated Costs

1 Designate a Lebanese lawyer

Agency : Lawyer

Each newly formed company must retain and pay an attorney on an annualbasis. On April 26 2012, the Beirut Bar Association increased the minimumannual retainer to LBP 9,000,000 e ective as of January 2013. This retainercan be paid by the company during the year. Startup fees are set by theBeirut Bar Association at LBP 3,000,000.

1 day LBP 3,000,000(attorney startupfees) + LBP 150,000(Legalization of thePower of Attorneybefore the BarAssociation)

2 Deposit the capital in a bank

Agency : Bank

This procedure can be carried out on the basis of a signed and notarizedcopy of the articles of association.

2 days no charge

3 Register at the Company Registry

Agency : Commercial Register

The applicant submits the following documents to the company registrar atthe Commercial Court, along with the total amount of required fees: Articles of association Commercial circulars Minutes of the rst general meeting of the partners Registration application and a draft of the registration certi cate to beissued Document attesting the capital deposit Partners identity cards or passports (copy) Documents evidencing that the company is entitled to occupy the premiseswhere it exercises its activities

Fee schedule for company registration: Tax for the magistrates mutual fund: LBP 375,000 lump tax + 0.15% of thecapital+ LBP 1,000 at registration fee + LBP 500 application fee + LBP 1,000certi ed copy + LBP 500 commercial publication fee Stamp duty: equal to 0.3% of capital + LBP 750,000 lump sum stamp duty +LBP 2,000 at registration fee + LBP 1,000 application fee + LBP 2,000 certi edcopy + enrollment fee (Qaydeyia) LBP 250+ LBP 1,000 commercial publicationfee

If the Bylaws are not signed before the Commercial Registry, additional feesare levied as follows: Notarization of the articles of association: LBP 8,500 for each page. Notarization fee: LBP 100,000 lump sum. Notary public tax: 0.1% of capital.

2 days see comments

4 Notify the Ministry of Finance of commencement of business operations

Agency : Ministry of Finance

Within 2 months of registration, the company must submit a noti cation ofcommencement of business activities to the Ministry of Finance in order toregister for income tax and VAT.

2 days no charge

5 Register at the National Social Security Fund (NSSF)

Agency : National Social Security Fund

This procedure has two functions: Registration of a new employee andCon rmation by the system.

The Registration function entails submitting a le for each new employee atthe NSSF regional o ce closest to the company premises and obtaining a lereference number (or a receipt acknowledging the registration) immediatelyupon the submission. Once this Registration function is completed, thebusiness is considered to have ful lled its legal obligations with the NSSF.The bene ts to the newly registered employees, under NSSF rules, will alsobecome immediately e ective. The Time to complete this procedure is 1 dayat no cost to the employer or the employee.

The Con rmation function consists of issuing a hard copy document(printed on a special size sheet) in the name of the registered employeealong with his/her unique NSSF ID. Due to the lack of printing equipment atNSSF, the con rmation documents are printed in batches every few days orso. Therefore, it could take up to 30 days for a con rmation sheet to bereceived by the newly registered employee.

1 day no charge

6 File internal labor regulations (rglement intrieur) with the Ministry ofLabor

Agency : Ministry of Labor

When the number of employees at a company reaches 15 then the companywill have to le internal labor regulations (rglement intrieur) with theMinistry of Labor according to Art. 66 of the Labor Code.

1 day no charge

7 Register for VAT

Agency : VAT Department

Registration for VAT is done at the VAT Department. To obtain a VATcerti cate of registration, it may take between 7 and 10 days. There arespeci c forms to ll out for each kind of registration. The VAT department isindependent from the taxes department. The registration in bothdepartments is free of charge.

one week(simultaneous withpreviousprocedure)

no charge

8 Obtain a company seal

Agency : Seal maker

Although not mandated by law, the majority of companies prefer to havecompany stamps.they can be order at any seal-making company.

1 day(simultaneous withpreviousprocedure)

LBP 20,000-35,000

Dealing with Construction PermitsThis topic tracks the procedures, time and cost to build a warehouseincluding obtaining necessary the licenses and permits,submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. Inaddition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality ofbuilding regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professionalcerti cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for moreinformation


Procedures to legally build a warehouse (number)

Submitting all relevant documents and obtainingall necessary clearances, licenses, permits andcertificates

Submitting all required notifications andreceiving all necessary inspections

Obtaining utility connections for water andsewerage

Registering and selling the warehouse after itscompletion



Each procedure starts on a separate daythough procedures that can be fully completedonline are an exception to this rule



Cost required to complete each procedure (% ofwarehouse value)


Building quality control index (0-15)

Sum of the scores of six component indices:

Quality of building regulations (0-2)

Quality control before construction (0-1)

Quality control during construction (0-3)

Quality control after construction (0-3)

Liability and insurance regimes (0-2)

Professional certifications (0-4)


To make the data comparable across economies, several assumptionsabout the construction company, the warehouse project and the utilityconnections are used.

The construction company (BuildCo):- Is a limited liability company (or its legal equivalent) and operates in theeconomys largest business city. For 11 economies the data are alsocollected for the second largest business city. - Is 100% domestically and privately owned; has ve owners, none of whomis a legal entity. Has a licensed architect and a licensed engineer, bothregistered with the local association of architects or engineers. BuildCo isnot assumed to have any other employees who are technical or licensedexperts, such as geological or topographical experts. - Owns the land on which the warehouse will be built and will sell thewarehouse upon its completion.

The warehouse: - Will be used for general storage activities, such as storage of books orstationery. - Will have two stories, both above ground, with a total constructed area ofapproximately 1,300.6 square meters (14,000 square feet). Each oor willbe 3 meters (9 feet, 10 inches) high and will be located on a land plot ofapproximately 929 square meters (10,000 square feet) that is 100% ownedby BuildCo, and the warehouse is valued at 50 times income per capita. - Will have complete architectural and technical plans prepared by alicensed architect. If preparation of the plans requires such steps asobtaining further documentation or getting prior approvals from externalagencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrativeand regulatory requirements).

The water and sewerage connections: - Will be 150 meters (492 feet) from the existing water source and sewertap. If there is no water delivery infrastructure in the economy, a boreholewill be dug. If there is no sewerage infrastructure, a septic tank in thesmallest size available will be installed or built. - Will have an average water use of 662 liters (175 gallons) a day and anaverage wastewater ow of 568 liters (150 gallons) a day. Will have a peakwater use of 1,325 liters (350 gallons) a day and a peak wastewater ow of1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater owthroughout the year; will be 1 inch in diameter for the water connectionand 4 inches in diameter for the sewerage connection.

Standardized Warehouse

Estimated value of warehouse LBP 590,599,304.60

City Covered Beirut



Procedures (number) 19 16.2 12.5 7.00 (Denmark)

Time (days) 249 132.1 154.6 27.5 (Korea, Rep.)

Cost (% of warehouse value) 5.6 4.3 1.6 0.10 (5 Economies)

Building quality control index (0-15) 13.0 11.8 11.4 15.00 (3 Economies)

FigureDealingwithConstructionPermitsinLebanonandcomparatoreconomiesRankingandDTF


0 100







Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontierscores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of thecomponent indicators.

FigureDealingwithConstructionPermitsinLebanonProcedure,TimeandCost

Procedures (number)

1 * 2 * 3 4 5 6 7 8 9 10 11 12 13 14 15 16 * 17 18 190

50

100

150

200

Time (days)

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

Cost (%

of w

arehouse value)

Time(days) Cost(%ofwarehousevalue)



FigureDealingwithConstructionPermitsinLebanonandcomparatoreconomiesMeasureofQuality

Lebanon Egypt, Arab Rep. Jordan Saudi Arabia Syrian Arab Republic Middle East & North Africa

0

2

4

6

8

10

12

14

16

Index score

13.014.0

11.012.0

no practice

11.8

DetailsDealingwithConstructionPermitsinLebanonProcedure,TimeandCost



1 Obtain a geotechnical study / soil test

Agency : Geotechnical engineer

BuildCo will request a soil test for the structural calculations for thefoundation. While the soil test is not required by law, it is done in practice asit is used for the structural calculations for the foundation.

15 days USD 2,225

2 Obtain a recent planning certi cate

Agency : Directorate General of Urban Planning (DGU)

BuildCo must submit a recent planning certi cate (they are usually valid for 3months) among the necessary documents to request a building permit.BuildCo must have a receipt from the municipality and should pay the valueof the stamps for this procedure.

The cost is as follows:1- Land certi cate stating the dimension and the content of the land: LBP10,5002- Cadastral plan showing the positioning of the land: LBP 10,0003- Receipt from the municipality of the planning certi cate: LBP 4,100

10 days LBP 24,600

3 Obtain a topographic study

Agency : Topographic engineer

BuildCo needs to obtain a topographic study at the beginning of theconstruction in order to have accurate details about the levels andlimitations of the land plot. This study is required for the construction permitapplication.

7 days USD 500

4 Hire a technical auditor and obtain approval of drawings

Agency : Technical Auditor

Based on Decision No. 1/1192 dated November 23, 2012, companies musthire a technical auditor accredited by the government who must review andapprove the drawings related to the project before the building permit canbe issued. They may request that modi cations be made to the drawings.Throughout the construction phase, the auditors must also ensure thatconstruction works are duly performed. And upon completion of the works,they must attest that the construction work was carried out properly.

3 days USD 5,000

5 Obtain approval of le by Order of Engineers (where engineer isregistered) and pay duties to Order

Agency : Beirut Order of Engineers

The le must be submitted to the Order of Engineers if the engineer isregistered (Beirut Order of Engineers or Tripoli Order of Engineers). The leshould include the following: A construction permit application signed by that same civil engineer orarchitect jointly with the real estate owner, The design plans, An agreement between the property owner and the architect or engineerresponsible for the project described.

In order to be submitted as part of the application for a building permit, the le must bear the seal and registration number of the relevant Order ofEngineers. The Order of Engineers meets twice a week.

A fee schedule for the permit to start construction works from the Order ofArchitects and Engineers has been implemented in Beirut since 2010: For the area between 1 and 3,000 sq. m., the cost is de LBP 1,500.00 per sq.m. For the area between 3,001 and 6,000 sq. m., the fee is LBP 3,000.00 per sq.m. For the area between 6,001 and 9,000 sq. m., the fee is LBP 4,500.00 per sq.m. Above 9,001sq. m., the fee is LBP 6,000.00 per sq. m.

The cost is LBP 1,950,900.00.

4 days LBP 1,950,900

6 Submit building permit application to Urban Development Department

Agency : Urban Development Department, Directorat Gnral d'Urbanisme(DGU)

BuildCo must submit the le described in the previous procedure to theUrban Development Department. In Beirut and Tripoli, the le is referred tothe municipal engineering departments. The process takes up to 6 months.The Urban Development Department is a subdivision of the DirectorateGeneral of Urbanism.

1 day no charge

7 Request and receive preapproval inspection from Urban DevelopmentDepartment

Agency : Urban Development Department, Directorat Gnral d'Urbanisme(DGU)

The Urban Development Department inspects the property and the plans toensure that they are consistent with the construction laws and regulations,and then issues its clearance for the issuance of the building permit andcalculates the building permit taxes. The inspection itself is completed in aday, but it takes a while from the date BuildCo requests the inspection untilthe date the inspector arrives.

40 days no charge

8 Pay building permit taxes to the municipality

Agency : Municipality

The Urban Development Department refers the le to the relevantmunicipality (in the case of the city of Beirut, to the Administrator of the Cityof Beirut). The municipality collects the construction permit taxes and issuesthe construction permit in the name of the property owner. Payment ismade at the municipality.

According to Decree No. 60 of 1988 on Municipal Taxes, the building permittaxes paid to the Municipality are a certain value per square meter of thebuilding. However, this value per square meter is calculated based on thevalue of 1 square meter of construction as follows:

- From the value of LBP 1 - 25,000: 1.5% of the construction value of 1 squaremeter- From the value between LBP 25,000 - 100,000: 2% of the construction valueof 1 square meter- From the value greater than LBP 100,000: 1% of the construction value of 1square meter

In the case of Doing Business, the value of 1 square meter of construction isthe total construction value / 1,300.6 sq. m.

Therefore, the value per square meter without taxes to be paid is calculatedas follows: (1.5% * 25,000) + (2% * 75,000) + (1% * [total construction value -100,000]).

Then a 15% municipal tax is added to the value above + 0.05% of theconstruction value of 1 square meter to obtain the total value to be paid persq. m. as a municipal contribution.

A second tax of 12% of the value above must be paid per square meter as anational tax.

A contribution of 5% of the value above must be paid per square meter tothe Order of Engineers and Architects.

Therefore, the above values would all be added to obtain the total cost persquare meter paid to the municipality for all building permit fees, which isthen multiplied by 1,300.6 sq. m. for the purposes of the Doing Business casestudy.

1 day LBP 9,593,403

9 Obtain building permit


By law, construction work can start if no decision about the building permitapplication has been made 15 days after the submission date. In practice,however, this is not applied, and people wait 4 months on average.

120 days no charge

10 Obtain starting order permit from Order of Engineers


To start construction the engineer and/or architect must pay the dossier feeaccording to the number of professionals involved in the construction work(civil engineer, mechanic engineer, electrical engineer, geotechnicalengineer, among others). The fee should not exceed LBP 200,000.00

3 days LBP 200,000

11 Submit permit from Order of Engineers to the police

Agency : Police

1 day no charge

12 Request and receive inspection from the Ministry of Public Works forwater and sewage

Agency : Ministry of Public Works

With follow-up, it takes 10 days from the time an inspection is requesteduntil an inspection begins. Without follow-up, however, the inspection mightnever take place.

10 days no charge

13 Submit application and receive approval for an occupancy permit fromthe Order of Engineers


Following completion of construction, an application for approval of anoccupancy permit must be submitted to the Order of Engineers. The Ordermust give a written and stamped approval rst.

4 days LBP 300,000

14 Submit application and receive approval for an occupancy permit fromthe Directorate General of Urban Planning (DGU)

Agency : Urban Development Department, Directorate General of UrbanPlanning (DGU)

Once construction has been completed, an application for approval of anoccupancy permit must be submitted to the Urban DevelopmentDepartment. The Urban Development Department performs an on-siteinspection of the building to ensure that it is in compliance with theconstruction permit and approved plans.

The application for an occupancy permit must be accompanied by the plansrelated to the completed construction, signed by the engineer in charge, andstamped by the Order of Engineers. Following the clearance from the UrbanDevelopment Department, the le is forwarded to the relevant municipality(in the case of Beirut, to the Administrator of the City of Beirut) that will issuethe occupancy permit in the name of the property owner. According to thelaw, the occupancy permit must be issued within a month. However, thistime limit is not enforced in practice.

1 day no charge

15 Receive on-site inspection from the Directorate General of UrbanPlanning (DGU)


It takes about a week to schedule the inspection.

1 day no charge

16 Obtain occupancy permit


By law, the time limit for the procedure is 30 days, but in practice, it takesmuch longer to obtain the occupancy permit -- about 55 days with follow-up.

30 days LBP 25,000

17Obtain water connection

Agency : Water of Beirut and Mount Lebanon

BuildCo must submit an application for water connection accompanied byvarious documents.

14 days LBP 2,260,000

18 Receive onsite inspection from the Ministry of Finance and obtainestimate of leasing value of the warehouse


Once the occupancy permit is issued, an inspector from the Ministry ofFinance visits the site to prepare an estimate of the leasing value of thewarehouse. This estimate is necessary to register the building.

1 day LBP 5,000

19 Register the building with the Real Estate Registry

Agency : Real Estate Registry

According to Tables 1 and 2 attached to the Decree Law No. 148 dated12/6/1959 and its amendments, the registration fees consist of: (i) 1% of theleasing value of the warehouse (ii) minor taxes such as topography tax(approximately LBP 250,000) and deed and contract taxes (approximatelyLBP 100,000). There is an additional Municipality tax (5% of the total taxes inthe aforementioned costs above), provided in Article 90 of the Law of theMunicipality Duties and Taxes No. 60/88 dated 12/8/1988 and itsamendments.

14 days LBP 6,568,793

DetailsDealingwithConstructionPermitsinLebanonMeasureofQuality

Answer Score

Building quality control index (0-15) 13.0

Quality of building regulations index (0-2) 2.0

How accessible are building laws and regulations in your economy? (0-1) Available online;Free of charge.

1.0

Which requirements for obtaining a building permit are clearly speci ed in the buildingregulations or on any accessible website, brochure or pamphlet? (0-1)

List of requireddocuments; Feesto be paid;Requiredpreapprovals.

1.0

Quality control before construction index (0-1) 1.0

Which third-party entities are required by law to verify that the building plans are incompliance with existing building regulations? (0-1)

Licensedarchitect;Licensedengineer; Private rm.

1.0

Quality control during construction index (0-3) 2.0

What types of inspections (if any) are required by law to be carried out duringconstruction? (0-2)

Inspections byexternalengineer or rm;Unscheduledinspections;Inspections atvarious phases.

1.0

Do legally mandated inspections occur in practice during construction? (0-1) Mandatoryinspections arealways done inpractice.

1.0

Quality control after construction index (0-3) 3.0

Is there a nal inspection required by law to verify that the building was built inaccordance with the approved plans and regulations? (0-2)

Yes, nalinspection isdone bygovernmentagency; Yes,externalengineersubmits reportfor nalinspection.

2.0

Do legally mandated nal inspections occur in practice? (0-1) Final inspectionalways occurs inpractice.

1.0

Liability and insurance regimes index (0-2) 2.0

Which parties (if any) are held liable by law for structural aws or problems in thebuilding once it is in use (Latent Defect Liability or Decennial Liability)? (0-1)

Architect orengineer;Professional incharge of thesupervision;Constructioncompany; Owneror investor.

1.0

Which parties (if any) are required by law to obtain an insurance policy to coverpossible structural aws or problems in the building once it is in use (Latent DefectLiability Insurance or Decennial Insurance)? (0-1)

No party isrequired by lawto obtaininsurance ;Owner orinvestor;Insurance iscommonly takenin practice.

1.0

Professional certi cations index (0-4) 3.0

What are the quali cation requirements for the professional responsible for verifyingthat the architectural plans or drawings are in compliance with existing buildingregulations? (0-2)

Minimumnumber of yearsof experience;Universitydegree inarchitecture orengineering;Being aregisteredarchitect orengineer.

2.0

What are the quali cation requirements for the professional who supervises theconstruction on the ground? (0-2)

Universitydegree inengineering,construction orconstructionmanagement;Being aregisteredarchitect orengineer.

1.0

Getting ElectricityThis topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newlyconstructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply,transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June2017. See the methodology for more information.


Procedures to obtain an electricity connection(number)

Submitting all relevant documents and obtainingall necessary clearances and permits

Completing all required notifications andreceiving all necessary inspections

Obtaining external installation works and possiblypurchasing material for these works

Concluding any necessary supply contract andobtaining final supply


Is at least 1 calendar day

Each procedure starts on a separate day


Reflects the time spent in practice, with littlefollow-up and no prior contact with officials



Value added tax excluded

The reliability of supply and transparency oftari s index (0-8)

Duration and frequency of power outages (03)

Tools to monitor power outages (01)

Tools to restore power supply (01)

Regulatory monitoring of utilities performance(01)

Financial deterrents limiting outages (01)

Transparency and accessibility of tariffs (01)

Price of electricity (cents per kilowatt-hour)*

Price based on monthly bill for commercialwarehouse in case study

*Note: Doing Business measures the pr ice ofelectricity, but it is not included in the distance tofrontier score nor the ranking on the ease of gettingelectricity.


To make the data comparable across economies, several assumptions areused.

The warehouse: - Is owned by a local entrepreneur and is used for storage of goods.- Is located in the economys largest business city. For 11 economies thedata are also collected for the second largest business city. - Is located in an area where similar warehouses are typically located and isin an area with no physical constraints. For example, the property is notnear a railway. - Is a new construction and is being connected to electricity for the rsttime. - Has two stories with a total surface area of approximately 1,300.6 squaremeters (14,000 square feet). The plot of land on which it is built is 929square meters (10,000 square feet).

The electricity connection:- Is a permanent one with a three-phase, four-wire Y connection with asubscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1,when 1 kVA = 1 kilowatt (kW). - Has a length of 150 meters. The connection is to either the low- ormedium-voltage distr ibution network and is either overhead orunderground, whichever is more common in the area where thewarehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried outon public land. There is no crossing of other owners private propertybecause the warehouse has access to a road. - Does not require work to install the internal wiring of the warehouse. Thishas already been completed up to and including the customers servicepanel or switchboard and the meter base.

The monthly consumption:- It is assumed that the warehouse operates 30 days a month from 9:00a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacityon average and that there are no electricity cuts (assumed for simplicityreasons) and the monthly energy consumption is 26,880 kilowatt-hours(kWh); hourly consumption is 112 kWh. - If multiple electricity suppliers exist, the warehouse is served by thecheapest supplier. - Tari s e ective in March of the current year are used for calculation ofthe price of electricity for the warehouse. Although March has 31 days, forcalculation purposes only 30 days are used.

Standardized Connection

Price of electricity (US cents per kWh) 13.3

Name of utility Electricit du Liban (EDL)

City Covered Beirut



Procedures (number) 5 4.8 4.7 2 (United ArabEmirates)

Time (days) 75 81.4 79.1 10 (United ArabEmirates)

Cost (% of income per capita) 130.2 780.3 63.0 0.00 (Japan)

Reliability of supply and transparency of tariffindex (0-8)

0 4.2 7.4 8.00 (28 Economies)

FigureGettingElectricityinLebanonandcomparatoreconomiesRankingandDTF


0 100







Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores forgetting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators.

FigureGettingElectricityinLebanonProcedure,TimeandCost

Procedures (number)

1 2 * 3 4 50

10

20

30

40

50

60

70

Time (days)

0

20

40

60

80

100

120

140

Cost (%

of incom

e per capita)




FigureGettingElectricityinLebanonandcomparatoreconomiesMeasureofQuality


0

1

2

3

4

5

6

7

8

Index score

0

3

7

6

0

4.2

DetailsGettingElectricityinLebanonProcedure,TimeandCost



1 Obtain neighbor's electricity bill (for address of closest building)

Agency : Neighbor

The customer needs to obtain an electricity bill from their neighbor or theidenti cation number of the neighbors meter box (showing the address ofthe closest building. This is needed when applying for electricity connectionbecause it allows the electricity company, Electricit du Liban, locate theconstruction.

1 calendar day LBP 0

2 Submit application to EDL and await estimate

Agency : Electricit du Liban (EDL), Beirut

The customer submits an application for electricity connection at Electricitdu Libans o ces. In addition to the application form, the client needs to submit: copy of the title deed copy of the ID card the original building permit, and electricity bill from the closest building (or meter box number) and itsaddress

18 calendar days LBP 11,000

3 Receive external inspection by EDL


The application is forwarded to the relevant department at the utility forreview. A site inspection is usually carried out to determine the details of theconnection.

The inspector then prepares a report with the speci cs of the connectionand awaits clearance from the relevant authority at the utility.

Once clearance is obtained and the inspector has prepared an estimate ofthe connection fees, the client will need to make the necessary payment atElectricit du Libans o ces. The client is then given the approved le backalong with a C23 card (with the number of connections and the temporarymeter, if needed).

1 calendar day LBP 462,509.76

4 Await and receive external works and meter installation from EDLsservice provider


External works start after the client has paid the connection fees. For aconnection of 3x200A, if the warehouse is less than 200 meters away fromthe closest distribution substation, the works will consist of laying out anunderground cable from the building to that substation.

Otherwise, a substation would be needed.

Any permits needed for the works are obtained by the utility directly.

The utility picks a contractor to do the external works, and possibly installthe meter and turn the electricity on too. The utility however, alwayssupervises the works. The contractor is in charge of applying for any required excavation permitwith the municipality.

No inspection of the entire internal wiring is done during the process.

49 calendar days LBP 14,907,000

5 Obtain nal connection from EDL or its contractor

Agency : Electricit du Liban (EDL), Beirut or its contractor

Usually it is the utility that turns on electricity, but it all depends on theagreement between the contractor and the utility. The contractor mighthave the right to also turn on the electricity.

At times when the utility is overloaded, it normally delegates the worksentirely to its contractor that does the works, installs the meter, and turnson the electricity. In this case, the utility only checks the nal connection atthe end to make sure the installation has been done properly.

Otherwise, if the agreement with the contractor does not give them thisright, meter installation is done by the utility.

7 calendar days LBP 0

DetailsGettingElectricityinLebanonMeasureofQuality

Note:

If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparencyof tari index.

If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Answer

Reliability of supply and transparency of tari index (0-8) 0

Total duration and frequency of outages per customer a year (0-3) 0

System average interruption duration index (SAIDI) ..

System average interruption frequency index (SAIFI) ..

What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI N/A

Mechanisms for monitoring outages (0-1) 0

Does the distribution utility use automated tools to monitor outages? No

Mechanisms for restoring service (0-1) 0

Does the distribution utility use automated tools to restore service? No

Regulatory monitoring (0-1) 0

Does a regulatorthat is, an entity separate from the utilitymonitor the utilitys performance onreliability of supply?

No

Financial deterrents aimed at limiting outages (0-1) 0

Does the utility either pay compensation to customers or face nes by the regulator (or both) if outagesexceed a certain cap?

No

Communication of tari s and tari changes (0-1) 1

Are e ective tari s available online? Yes

Link to the website, if available online http://www.edl.gov.lb/ABOUTEDL.htm

Are customers noti ed of a change in tari ahead of the billing cycle? Yes

Registering PropertyThis topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur whowants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures thequality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability ofinfrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. Themost recent round of data collection for the project was completed in June 2017. See the methodology for more information.


Procedures to legally transfer title on immovableproperty (number)

Preregistration procedures (for example,checking for liens, notarizing sales agreement,paying property transfer taxes)

Registration procedures in the economy's largestbusiness citya.

Postregistration procedures (for example, fillingtitle with municipality)



Each procedure starts on a separate day - thoughprocedures that can be fully completed onlineare an exception to this rule



Cost required to complete each procedure (% ofproperty value)

Official costs only (such as administrative fees,duties and taxes).

Value Added Tax, Capital Gains Tax and illicitpayments are excluded

Quality of land administration index (0-30)

Reliability of infrastructure index (0-8)

Transparency of information index (06)

Geographic coverage index (08)

Land dispute resolution index (08)

Equal access to property rights index (-20)


To make the data comparable across economies, several assumptionsabout the parties to the transaction, the property and the procedures areused.

The parties (buyer and seller):- Are limited liability companies (or the legal equivalent).- Are located in the periurban area of the economys largest business city.For 11 economies the data are also collected for the second largestbusiness city.- Are 100% domestically and privately owned.- Have 50 employees each, all of whom are nationals.- Perform general commercial activities.

The property (fully owned by the seller):- Has a value of 50 times income per capita, which equals the sale price.- Is fully owned by the seller.- Has no mortgages attached and has been under the same ownership forthe past 10 years.- Is registered in the land registry or cadastre, or both, and is free of titledisputes.- Is located in a periurban commercial zone, and no rezoning is required.- Consists of land and a building. The land area is 557.4 square meters(6,000 square feet). A two-story warehouse of 929 square meters (10,000square feet) is located on the land. The warehouse is 10 years old, is ingood condition, has no heating system and complies with all safetystandards, building codes and legal requirements. The property,consisting of land and building, will be transferred in its entirety. - Will not be subject to renovations or additional construction following thepurchase.- Has no trees, natural water sources, natural reserves or historicalmonuments of any kind.- Will not be used for special purposes, and no special permits, such as forresidential use, industrial plants, waste storage or certain types ofagricultural activities, are required.- Has no occupants, and no other party holds a legal interest in it.

Standard Property Transfer

Property value LBP 590,599,304.60

City Covered Beirut



Procedures (number) 8 5.7 4.6 1.00 (4 Economies)

Time (days) 34 30.3 22.3 1.00 (3 Economies)

Cost (% of property value) 5.9 6.0 4.2 0.00 (5 Economies)

Quality of the land administration index (0-30) 16.0 13.4 22.7 29.00 (Singapore)

FigureRegisteringPropertyinLebanonandcomparatoreconomiesRankingandDTF


0 100







Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores forregistering property. These scores are the simple average of the distance to frontier scores for each of the component indicators.

FigureRegisteringPropertyinLebanonProcedure,TimeandCost

Procedures (number)

1 2 3 * 4 5 6 * 7 80

5

10

15

20

25

30

Time (days)

0

1

2

3

4

5

6

Cost (%

of property value)

Time(days) Cost(%ofpropertyvalue)



FigureRegisteringPropertyinLebanonandcomparatoreconomiesMeasureofQuality


0

5

10

15

20

25

Index score 16.0

7.0

22.5

10.0 10.513.4

DetailsRegisteringPropertyinLebanonProcedure,TimeandCost


1 Obtain an updated Real Estate Certi cate from the Land Registry

Agency : Land Registry

Parties obtain an updated Real Estate Certi cate from the Land Registry,such certi cate mentions the names of the owners, a description of theproperty and any encumbrance or easement or inscription, if any, on theproperty. The procedure to obtain the Real Estate Certi cate is a straightforward one which only requires submission of the request, and thecerti cate is immediately issued thereafter. Starting in 2016, there is apossibility to obtain the certi cate online by going tohttp://www.lrc.gov.lb/en/content/viewing-title-register.

1 day LBP 10,000

2 Obtain an o cial cadastral map

Agency : Cadastre Administration (Da'irat al Massaha)

If the area is not speci ed in the real estate certi cate and in the title deed,which is often the case, an o cial cadastral map and an area certi cate mustbe obtained from the cadastre administration (in Arabic Dairat alMassaha).

1 day LBP 20,000

3 Obtain an urban plan certi cate from the Urban Planning Authority andthe Municipality

Agency : Urban Planning Authority and Municipality

Parties obtain an urban plan certi cate from the Urban Planning Authorityand the Municipality. This is not strictly required by the law, but it is usuallyrequested by the buyer in order to make sure that no special easement orexpropriation is planned on the property that he intends to purchase.

10 days(simultaneous withProcedures 4)

LBP 6,000

4 Obtain tax clearance from the Municipality


Obtain clearance from the Municipality to make sure that municipal taxesprior to the sale agreement have been paid. This is not required by law, but itis usually requested by the buyer.

3 days(simultaneous withProcedures 3)

LBP 8,000

5 Preparation of the sale agreement

Agency : Notary/attorney

An attorney or notary public or quali ed facilitator prepares the saleagreement on an o cial form.The participation of a lawyer is not mandatory, but it is preferred to avoidany mistakes. The sale contract is often drafted by the notary public or by aquali ed facilitator.However, for complex and delicate real estate transactions where either orboth parties need to protect their rights, the contract is usually negotiatedand drafted by both parties attorneys.The Beirut Bar Association on its decision of April 26th, 2012 has set aminimum fee of LBP 1,500,000 for the drafting of a contract. Such minimumfee shall be subject to an increase taking into consideration the contract'svalue and importance.

2 days LBP 1,500,000(minimum set by theBeirut BarAssociation)

6 Inspection of the property by the Tax Authority to get an o cialestimate of its rental value


The Tax Authority at the Ministry of Finance orders an inspection of theproperty by a controller to obtain an o cial estimate of the rental value ofthe property. A copy of the sale agreement should be submitted to theMinistry of Finance to obtain the o cial estimate of the rental value.

10 days(simultaneous withprocedure 7)

no cost

7 Obtain an o cial estimate of the rental value of the property from theTax Authority


An o cial estimate of the rental value of the property is delivered by the TaxAuthority at the Ministry of Finance after the inspection together with a taxdischarge (clearance). Sometimes, an occupancy certi cate from theMunicipality is also requested.

3 days(simultaneous withProcedure 6)

LBP 5,000

8 Apply for registration at the Land Registry

Agency : Land Registry

The contract, together with the documentation, is presented, either a)directly to the Land Registry o cer before whom the contract is signed andthen the property is registered, or b) to the notary public before whom thecontract is signed and then both the contract and the documentation shallbe presented to the Land Registry for registration of title.

a) If it is presented to the Land Registry, all taxes and duties are paid at thetax authority cashier, which is located at the same building than the LandRegistry.The taxes and duties to be paid if the contract is presented at the LandRegistry are as follows: Proportional stamp duty: 0.3% of contract value. Bar Association tax: 0.1% of contract value. Various taxes, namely:- Flat tax on contract: LBP 8,000.- Flat tax (called in Arabic kaydieh): LBP 8,000.- Flat tax on title deed: LBP 8,000.- Flat tax on new title deed: LBP 50,000Total of said at taxes: LBP 74,000- Proportional transfer tax: 5% of contract value or of the value resultingfrom the o cial estimate, which is higher.- Proportional Municipal tax: 5% of the total amount (i.e. aforementioned 5%transfer tax + L.P. 74,000).- Flat stamp duty on new deed: L.P. 5,000

About 10 days LBP 74,000 (Flattaxes) + 5% ofproperty value(Transfer tax) + 5% ofthe sum of TransferTax and Flat Taxes(Municipal Tax) + LBP5,000 (stamp duty onnew deed) + 0.3% ofproperty value(stamp duty) + 0.1%of property value(bar association tax)

http://dbuat.financeandprivatesector.org/~/media/WBG/DoingBusiness/Documents/Profiles/Country/LBN.pdfhttp://dbuat.financeandprivatesector.org/data/exploreeconomies/profile/~/media/AF824138BBBF4853B9C8C237C3D99FF9.ashxhttp://dbuat.financeandprivatesector.org/reforms/overview/economy/%7BcountryUrlName%7Dhttp://dbuat.financeandprivatesector.org/data/exploreeconomies/profile/~/media/WBG/DoingBusiness/Documents/Methodology/LMR/LMR-2018DB-service-sector-data-points-and-details.xlsxhttp://dbuat.financeandprivatesector.org/methodology/LMR-why-it-mattershttp://dbuat.financeandprivatesector.org/About-Us/FAQ#EWI

Economy ProfileLebanon

Economy Pro le of Lebanon

Doing Business 2018 Indicators(in order of appearance in the document)

Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company

Dealing with constructionpermits

Procedures, time and cost to complete all formalities to build a warehouse and the quality control andsafety mechanisms in the construction permitting system

Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply andthe transparency of tariffs

Registering property Procedures, time and cost to transfer a property and the quality of the land administration system

Getting credit Movable collateral laws and credit information systems

Protecting minority investors Minority shareholders rights in related-party transactions and in corporate governance

Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes

Trading across borders Time and cost to export the product of comparative advantage and import auto parts

Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes

Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal frameworkfor insolvency

Labor market regulation Flexibility in employment regulation and aspects of job quality

About Doing BusinessThe Doing Business project provides objective measures of business regulations and their enforcement across 190 economies andselected cities at the subnational and regional level.

The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulationsapplying to them through their life cycle.

Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It providesquantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registeringproperty, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolvinginsolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankingsof economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking onthe ease of doing business, it does present the data for these indicators.

By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies andover time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks forreform; and serves as a resource for academics, journalists, private sector researchers and others interested in the businessclimate of each economy.

In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erentcities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommendreforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with othercities in the economy or region and with the 190 economies that Doing Business has ranked.

The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This years report covers 11indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, exceptfor 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan,Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the secondlargest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. Theproject has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to providean objective basis for understanding and improving the regulatory environment for business around the world.

The distance to frontier (DTF) measure shows the distance of each economy to the frontier, which represents the bestperformance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economysdistance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents thefrontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting theaggregate distance to frontier scores, rounded to two decimals.

More about Doing Business (PDF, 5MB)

Ease of Doing Business inLebanon

RegionMiddle East & NorthAfrica

Income Category Upper middle income

Population 6,006,668

GNI Per Capita (US$) 7,680

City Covered Beirut

DB2018Rank190 1

133

DB2018DistancetoFrontier(DTF)0 100

54.67

0 100

62.50:SaudiArabia(Rank:92)

60.58:Jordan(Rank:103)

56.72:RegionalAverage(MiddleEast&NorthAfrica)

56.22:Egypt,ArabRep.(Rank:128)

54.67:Lebanon(Rank:133)

41.55:SyrianArabRepublic(Rank:174)


Note: The distance to frontier (DTF) measure shows the distance of each economy to the frontier, which represents the best performance observed on each ofthe indicators across all economies in the Doing Business sample since 2005. An economys distance to frontier is re ected on a scale from 0 to 100, where 0represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190.

Rankings on Doing Business topics - Lebanon

Startinga

Business

Dealingwith

ConstructionPermits

GettingElectricity

RegisteringProperty

GettingCredit


PayingTaxes


EnforcingContracts

ResolvingInsolvency

1

28

55

82

109

136

163

190

Rank

143 142

123

102

122

138

113

140 134147

Distance to Frontier (DTF) on Doing Business topics - Lebanon

Startinga

BusinessChange:-0.28

Dealingwith

ConstructionPermits

Change:-0.13

GettingElectricity

Change:-0.02

RegisteringProperty

Change:-0.01

GettingCredit

Change:0.00


Change:0.00

PayingTaxes

Change:0.00


Change:0.00

EnforcingContractsChange:0.00

ResolvingInsolvencyChange:-0.61

0

20

40

60

80

100

DTF

78.17

59.66 60.07 59.93

40.00 41.67

68.2159.71

49.85

29.42

Starting a BusinessThis topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sizedlimited liability company to start up and formally operate in economys largest business city.

To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domesticallyowned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities andemploys between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Startinga Business considers two types of local limited liability companies that are identical in all aspects, except that one company is ownedby 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scoresobtained for each of the component indicators.The latest round of data collection for the project was completed in June 2017. See the methodology for more information.


Procedures to legal ly start and operate acompany (number)

Pre-registration (for example, name verificationor reservation, notarization)

Registration in economys largest business city

Post-registration (for example, social securityregistration, company seal)

Obtaining approval from spouse to start businessor leave home to register company

Obtaining any gender-specific permission thatcan impact company registration, companyoperations and process of getting nationalidentity card



Each procedure starts on a separate day (2procedures cannot start on the same day)

Procedures fully completed online are recordedas day





No professional fees unless services required bylaw or commonly used in practice

Paid-in minimum capital (% of income per capita)

Funds deposited in a bank or with third partybefore registration or up to 3 months afterincorporation


To make the data comparable across economies, several assumptionsabout the business and the procedures are used. It is assumed that anyrequired information is readily available and that the entrepreneur will payno bribes.

The business:- Is a limited liability company (or its legal equivalent). If there is more thanone type of limited liability company in the economy, the most commonamong domestic rms is chosen. Information on the most common form isobtained from incorporation lawyers or the statistical o ce. - Operates in the economys largest business city and the entire o cespace is approximately 929 square meters (10,000 square feet). For 11economies the data are also collected for the second largest business city.- Is 100% domestically owned and has ve owners, none of whom is a legalentity; and has a start-up capital of 10 times income per capita and has aturnover of at least 100 times income per capita. - Performs general industrial or commercial activities, such as theproduction or sale of goods or services to the public. The business doesnot perform foreign trade activities and does not handle products subjectto a special tax regime, for example, liquor or tobacco. It does not useheavily polluting production processes. - Leases the commercial plant or o ces and is not a proprietor of realestate and the amount of the annual lease for the o ce space is equivalentto 1 times income per capita.- Does not qualify for investment incentives or any special bene ts. - Has at least 10 and up to 50 employees one month af ter thecommencement of operations, all of whom are domestic nationals. - Has a company deed 10 pages long.

The owners: - Have reached the legal age of majority. If there is no legal age of majority,they are assumed to be 30 years old. - Are sane, competent, in good health and have no criminal record. - Are married and the marriage is monogamous and registered with theauthorities. - Where the answer di ers according to the legal system applicable to thewoman or man in question (as may be the case in economies where thereis legal plurality), the answer used will be the one that applies to themajority of the population.

Standardized Company

Legal form Socit a Responsabilit Limite (SARL)

Paid-in minimum capital requirement LBP 5,000,000

City Covered Beirut



Procedure Men (number) 8 7.7 4.9 1.00 (New Zealand)

Time Men (days) 15 18.6 8.5 0.50 (New Zealand)

Cost Men (% of income per capita) 42.0 18.7 3.1 0.00 (United Kingdom)

Procedure Women (number) 8 8.4 4.9 1.00 (New Zealand)

Time Women (days) 15 19.3 8.5 0.50 (New Zealand)

Cost Women (% of income per capita) 42.0 18.7 3.1 0.00 (United Kingdom)

Paid-in min. capital (% of income per capita) 42.3 9.9 8.7 0.00 (113 Economies)

FigureStartingaBusinessinLebanonandcomparatoreconomiesRankingandDTF


0 100







Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores forstarting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators.

FigureStartingaBusinessinLebanonProcedure,TimeandCost

Procedures (number)

1 2 3 4 5 6 * 7 * 80

2

4

6

8

10

12

14

Time (days)

0

5

10

15

20

25

30

Cost (%

of incom

e per capita)




DetailsStartingaBusinessinLebanonProcedure,TimeandCost

Applies to women only.



1 Designate a Lebanese lawyer

Agency : Lawyer

Each newly formed company must retain and pay an attorney on an annualbasis. On April 26 2012, the Beirut Bar Association increased the minimumannual retainer to LBP 9,000,000 e ective as of January 2013. This retainercan be paid by the company during the year. Startup fees are set by theBeirut Bar Association at LBP 3,000,000.

1 day LBP 3,000,000(attorney startupfees) + LBP 150,000(Legalization of thePower of Attorneybefore the BarAssociation)

2 Deposit the capital in a bank

Agency : Bank

This procedure can be carried out on the basis of a signed and notarizedcopy of the articles of association.

2 days no charge

3 Register at the Company Registry

Agency : Commercial Register

The applicant submits the following documents to the company registrar atthe Commercial Court, along with the total amount of required fees: Articles of association Commercial circulars Minutes of the rst general meeting of the partners Registration application and a draft of the registration certi cate to beissued Document attesting the capital deposit Partners identity cards or passports (copy) Documents evidencing that the company is entitled to occupy the premiseswhere it exercises its activities

Fee schedule for company registration: Tax for the magistrates mutual fund: LBP 375,000 lump tax + 0.15% of thecapital+ LBP 1,000 at registration fee + LBP 500 application fee + LBP 1,000certi ed copy + LBP 500 commercial publication fee Stamp duty: equal to 0.3% of capital + LBP 750,000 lump sum stamp duty +LBP 2,000 at registration fee + LBP 1,000 application fee + LBP 2,000 certi edcopy + enrollment fee (Qaydeyia) LBP 250+ LBP 1,000 commercial publicationfee

If the Bylaws are not signed before the Commercial Registry, additional feesare levied as follows: Notarization of the articles of association: LBP 8,500 for each page. Notarization fee: LBP 100,000 lump sum. Notary public tax: 0.1% of capital.

2 days see comments

4 Notify the Ministry of Finance of commencement of business operations


Within 2 months of registration, the company must submit a noti cation ofcommencement of business activities to the Ministry of Finance in order toregister for income tax and VAT.

2 days no charge

5 Register at the National Social Security Fund (NSSF)

Agency : National Social Security Fund

This procedure has two functions: Registration of a new employee andCon rmation by the system.

The Registration function entails submitting a le for each new employee atthe NSSF regional o ce closest to the company premises and obtaining a lereference number (or a receipt acknowledging the registration) immediatelyupon the submission. Once this Registration function is completed, thebusiness is considered to have ful lled its legal obligations with the NSSF.The bene ts to the newly registered employees, under NSSF rules, will alsobecome immediately e ective. The Time to complete this procedure is 1 dayat no cost to the employer or the employee.

The Con rmation function consists of issuing a hard copy document(printed on a special size sheet) in the name of the registered employeealong with his/her unique NSSF ID. Due to the lack of printing equipment atNSSF, the con rmation documents are printed in batches every few days orso. Therefore, it could take up to 30 days for a con rmation sheet to bereceived by the newly registered employee.

1 day no charge

6 File internal labor regulations (rglement intrieur) with the Ministry ofLabor

Agency : Ministry of Labor

When the number of employees at a company reaches 15 then the companywill have to le internal labor regulations (rglement intrieur) with theMinistry of Labor according to Art. 66 of the Labor Code.

1 day no charge

7 Register for VAT

Agency : VAT Department

Registration for VAT is done at the VAT Department. To obtain a VATcerti cate of registration, it may take between 7 and 10 days. There arespeci c forms to ll out for each kind of registration. The VAT department isindependent from the taxes department. The registration in bothdepartments is free of charge.

one week(simultaneous withpreviousprocedure)

no charge

8 Obtain a company seal

Agency : Seal maker

Although not mandated by law, the majority of companies prefer to havecompany stamps.they can be order at any seal-making company.

1 day(simultaneous withpreviousprocedure)

LBP 20,000-35,000

Dealing with Construction PermitsThis topic tracks the procedures, time and cost to build a warehouseincluding obtaining necessary the licenses and permits,submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. Inaddition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality ofbuilding regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professionalcerti cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for moreinformation


Procedures to legally build a warehouse (number)

Submitting all relevant documents and obtainingall necessary clearances, licenses, permits andcertificates

Submitting all required notifications andreceiving all necessary inspections

Obtaining utility connections for water andsewerage

Registering and selling the warehouse after itscompletion



Each procedure starts on a separate daythough procedures that can be fully completedonline are an exception to this rule



Cost required to complete each procedure (% ofwarehouse value)


Building quality control index (0-15)

Sum of the scores of six component indices:

Quality of building regulations (0-2)

Quality control before construction (0-1)

Quality control during construction (0-3)

Quality control after construction (0-3)

Liability and insurance regimes (0-2)

Professional certifications (0-4)


To make the data comparable across economies, several assumptionsabout the construction company, the warehouse project and the utilityconnections are used.

The construction company (BuildCo):- Is a limited liability company (or its legal equivalent) and operates in theeconomys largest business city. For 11 economies the data are alsocollected for the second largest business city. - Is 100% domestically and privately owned; has ve owners, none of whomis a legal entity. Has a licensed architect and a licensed engineer, bothregistered with the local association of architects or engineers. BuildCo isnot assumed to have any other employees who are technical or licensedexperts, such as geological or topographical experts. - Owns the land on which the warehouse will be built and will sell thewarehouse upon its completion.

The warehouse: - Will be used for general storage activities, such as storage of books orstationery. - Will have two stories, both above ground, with a total constructed area ofapproximately 1,300.6 square meters (14,000 square feet). Each oor willbe 3 meters (9 feet, 10 inches) high and will be located on a land plot ofapproximately 929 square meters (10,000 square feet) that is 100% ownedby BuildCo, and the warehouse is valued at 50 times income per capita. - Will have complete architectural and technical plans prepared by alicensed architect. If preparation of the plans requires such steps asobtaining further documentation or getting prior approvals from externalagencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrativeand regulatory requirements).

The water and sewerage connections: - Will be 150 meters (492 feet) from the existing water source and sewertap. If there is no water delivery infrastructure in the economy, a boreholewill be dug. If there is no sewerage infrastructure, a septic tank in thesmallest size available will be installed or built. - Will have an average water use of 662 liters (175 gallons) a day and anaverage wastewater ow of 568 liters (150 gallons) a day. Will have a peakwater use of 1,325 liters (350 gallons) a day and a peak wastewater ow of1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater owthroughout the year; will be 1 inch in diameter for the water connectionand 4 inches in diameter for the sewerage connection.

Standardized Warehouse

Estimated value of warehouse LBP 590,599,304.60

City Covered Beirut



Procedures (number) 19 16.2 12.5 7.00 (Denmark)

Time (days) 249 132.1 154.6 27.5 (Korea, Rep.)

Cost (% of warehouse value) 5.6 4.3 1.6 0.10 (5 Economies)

Building quality control index (0-15) 13.0 11.8 11.4 15.00 (3 Economies)

FigureDealingwithConstructionPermitsinLebanonandcomparatoreconomiesRankingandDTF


0 100







Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontierscores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of thecomponent indicators.

FigureDealingwithConstructionPermitsinLebanonProcedure,TimeandCost

Procedures (number)

1 * 2 * 3 4 5 6 7 8 9 10 11 12 13 14 15 16 * 17 18 190

50

100

150

200

Time (days)

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

Cost (%

of w

arehouse value)

Time(days) Cost(%ofwarehousevalue)



FigureDealingwithConstructionPermitsinLebanonandcomparatoreconomiesMeasureofQuality


0

2

4

6

8

10

12

14

16

Index score

13.014.0

11.012.0

no practice

11.8

DetailsDealingwithConstructionPermitsinLebanonProcedure,TimeandCost



1 Obtain a geotechnical study / soil test

Agency : Geotechnical engineer

BuildCo will request a soil test for the structural calculations for thefoundation. While the soil test is not required by law, it is done in practice asit is used for the structural calculations for the foundation.

15 days USD 2,225

2 Obtain a recent planning certi cate

Agency : Directorate General of Urban Planning (DGU)

BuildCo must submit a recent planning certi cate (they are usually valid for 3months) among the necessary documents to request a building permit.BuildCo must have a receipt from the municipality and should pay the valueof the stamps for this procedure.

The cost is as follows:1- Land certi cate stating the dimension and the content of the land: LBP10,5002- Cadastral plan showing the positioning of the land: LBP 10,0003- Receipt from the municipality of the planning certi cate: LBP 4,100

10 days LBP 24,600

3 Obtain a topographic study

Agency : Topographic engineer

BuildCo needs to obtain a topographic study at the beginning of theconstruction in order to have accurate details about the levels andlimitations of the land plot. This study

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