Guide Lebanon

7/31/2019 Guide Lebanon

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Guide to Doing Businessin Lebanon

(Updated to February 24, 2010)

Submitted by: Moghaizel Law Officeshttp://www.mlof.com


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I. THE COUNTRY AT A GLANCE

A. What languages are spoken?

Arabic99%(officiallanguage)

English50%

French45%

Armenian5%

B. What is the exchange rate for the U.S. dollar, the Euro?

1US$=1,507LebanesePounds(February2010)

1Euro=2,053.75375LebanesePounds(February2010)

C. Describe your countrys geography, proximity to other countries and climate.

LebanonisacountryinWesternAsia,ontheeasternshoreoftheMediterraneanSea,which

liesbetween33and34.40Northlatitudeand35and36.40Eastlongitude.Itisborderedon

theNorthandEastbySyria,ontheSouthbyIsrael,andontheWestbytheMediterranean

Sea,withatotalboundarylengthof679kmofwhich225kmiscoastline.Thehighestpeakis

QornetAlSaouda(3,083meters).ThefourseasonsareveryclearinLebanon,butinaverage

thetemperatureisaround17.728.7Celsius.

Otherneighboringcountries:Jordan,UAE,SaudiArabia,Iraq,KuwaitandIran.

Lebanonsgeographic location,topographyandclimateareundoubtedlythecountrysmain

features.

D. Are there cultural influences or prohibitions on the way business is conducted?

E. Are there religious influences or prohibitions on the way business is conducted?

Lebanon has always followed a liberal economic policy. Governmental regulations and

interventionhavebeenminimal.Thepubliceconomicpolicyinvolvesmerelytheapplication

ofaxiomsderived from theeconomicsofprivateorfreeenterprise.Therefore,thereare

neitherculturalnorreligiousinfluencesnorprohibitionsonthewaybusinessisconducted.


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F. Explain your countrys infrastructure. Be sure to explain which cities have airports,railroad systems, ports, public transportation.

Reorganization of the transport sector is considered to be a priority due to its social,

economic,urbanandenvironmentaldimensions.Theoperation isstillfarfromcomplete.A

large

number

of

projects

are

still

in

progress:

1.Roadtransport:

Theroadtransportationsectorstillsuffersfromseriousstructuraldifficulties.Thenetworkin

Lebanon includes about6,360kilometersof roads. It isorganizedaround threemainaxes

fromthecapital:

a BeirutTripoli,SouthNorth.

b BeirutDamascus,NorthEast.

c BeirutTyre,NorthSouth.

Severalprojectstodeveloptheroadsnetworkhavebeenstartedandarebeingmonitoredby

the relevant governmental organizations such as the Council for Development and

Reconstruction(CDR).

Publictransports:Publictransportsareprovidedbythepublicsectoraswellasbyprivatecompanies.Theservicetaxinetworkandprivatebusesserveall localities

withinlargetownsaswellasvarioustownswithinthecountry.

Railway transportation: A rudimentary railway network briefly operated in

Lebanon.

It

grounded

to

a

half

when

the

war

started.

It

is

currently

non

operational. Theoretically, railway lines in Lebanon covered a network of 428

kilometersspreadon3axes:

i. Acoastalrailway,224kilometersfromNakouraintheSouthtoAkkarintheNorth.

ii. A lineof102kilometerspassingthroughtheNorthof Bekaameeting

thecoastallineatHoms,Syria.

iii. Aninternallineof102kilometerslinkingBeiruttoDamascus.

Aprojecttorehabilitatetherailwaynetworkhasbeenconsideredbutnotyetimplemented.


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2.Marinetransport:

The port infrastructure in Lebanon is concentrated primarily in the Beirut Port and

secondarilyattheportsofTripoli,Chekka,Jounieh,SaidaandTyreaswellasthepetroleum

portsofTripoliandZahrani.

3.Airtransport:

Remarkableeffortshavebeenmadeintheairtransportationsectorduringrecentyears.The

additionalinfrastructure,adoptionofnewtechniques,andthesigningofseveralagreements

wereaimedat increasing trafficat theBeirutRaficHariri InternationalAirport.Openedon

April3,1998,thenewairportisofinternationalstandardandcanstanduptointernational

comparison.

TheRaficHariri InternationalAirport isalso thehub forLebanon'snationalcarrier,Middle

EastAirlines(MEA).G. Explain the communication system.

Lebanons telecommunications network improved considerably following the development

and rehabilitation projects undertaken by the Ministry of Posts, Telephones and

Telecommunications.Additionally,thephenomenalgrowthofcellulartelephonesduringthe

lastfewyearshasbroughttelephoneservicestoquitealargenumberofpeople.

ThefixedsystemisknownbytheacronymPSTN(PublicSwitchedTelephoneNetwork).

The

telephone

system

management

installed

public

phone

booths

throughout

the

main

cities

ofthecountry.

The cellularmobile telephone systemwas established through private sectorparticipation

paralleled with the public investment program. The Government adopted the BOT (build,

operate and transfer) approach to theproject. Thismeans that theoperatorprovides the

funds needed to carry out the work and operate the system. The private operators in

LebanonwereTelecomFinland International, representedbyLibancellandFranceTelecom

MobileLiban,representedbyCellis.

From June 1st, 2004 the GSM network in Lebanon has been transferred to the Lebanese

Governmentanditisbeingoperatedby:

MobileTelecommunicationsCompanysarl, (mtc touch is thebrandnameof thenetwork

ownedbyMobileInterimCompanyNo2SAL.)

Orascom Telecom, (Alfa is the brand name of the network owned by Mobile Interim

CompanyNo1SAL.)


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PostalservicesaremanagedbyaprivatecompanycalledLibanpostSAL.

H. Describe the public services i.e. water, electricity, gas. Are they publicly orprivately owned?

1 Electricity:TheGovernment iscarryingoutanextensiveprogramtorehabilitateandexpandelectricalpower.However,powerisstillnotprovided24hoursadayandisrationed

inallLebaneseregions.

2 Water: Unlike neighboring countries, Lebanon does not suffer from a shortage ofnaturalwater.However,waterresourcesaredecliningduetodecreasingquantitiesofrainor

increasedexposuretopollution.Atthetimebeing,thereareofficesandcommittees,under

the supervision of the Ministry of Hydraulic and Electrical Resources, in charge of the

managementofthewatersupply.PerformanceofthisMinistryisconsiderablyhamperedby

insufficientbudgetaryfundsandlowstaffinglevels.

The CDR has launched projects for the recovery of water transmission and purification in

three ways: Technical assistance to the Ministry of Hydraulic and Electric resources,

rehabilitationof current infrastructureand theextensionof current,andprovisionofnew

infrastructures.Boththeelectricitysectorandthewaterservicesarepubliclyowned.

3 Gas: Gas distribution is ensured by privatelyowned bottled gas distributioncompanies.Thereisnogaspipesnetwork.

II. GENERAL CONSIDERATIONS

A. Investment policies

1. Does the country generally welcome investment? Are there governmental or privateagencies devoted to the promotion of investment?

The Government has generally followed a policy to encourage foreign investments. Full

foreign ownership of businesses is free, subject to a very limited number of restricted

activities such as exclusive commercial agency in relation to which Lebanese majority

ownershipisprescribed.ForeignersmayfreelyownpropertyinLebanonupto3,000square

metersandwithauthorizationbeyondsuchlimit.


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2. What is the rate of inflation?

YearInflationrate(consumer

prices)Rank

Percent

Change

Dateof

Information

2003 3.50% 104 2002est.

2004 2.50% 137 28.57% 2003est.

2005 2.00% 53 20.00% 2004est.

2006 2.40% 68 20.00% 2005est.

2007 4.80% 129 100.00% 2006est.

2008 4.20% 107 12.50% 2007est.

2009 10.00% 145 138.10% 2008est.

3. Explain any sector exceptions, incentives or restrictions on foreign investment?

Thereareneitherexceptionsnorrestrictionsonforeigninvestment.Therearenosignificant

incentivesforforeigninvestments.

4. Describe de facto restrictions on investment, if any, such as bureaucratic discretion.

Therearenodefactorestrictionsoninvestment.

5. What is the size of the different markets?

Lebanon

being

a

small

country,

there

is

a

single

market,

where

the

services

sector

is

predominant.

6. What types of businesses are conducted in the country?

AlltypesofbusinessesareconductedinLebanon.

B. Diplomatic Relations

1. Explain any established diplomatic relations your country may have.

Lebanon

has

diplomatic

relations

with

a

very

large

number

of

countries.

There

are

no

restrictionsastoestablishingdiplomaticrelationswithanycountryexceptwithIsrael.


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2. Give addresses and telephone numbers for the embassies or consulates in yourcountry?

Emb assy o f A lger ia in Be i ru t , Lebanon Rue Jnah Bp 4794/11City : Beirut

Phone: 961 1 82 67 12, 961 1 82 20 81Fax: 961 1 82 67 11, 961 1 84 08 81

Emb assy o f Argen t ina in Be i ru t , LebanonAchrafieh, Rue Sursock N 161, Imm. MoutranResidence des Jardins, 2 eme. etageBeirut, LebanonCity : BeirutPhone: (+961) 1 210 800 / 801

Emb assy o f Arm en ia in Be i ru t , Lebanon Rabieh, MtailebJasmin St.Beirut, LebanonCity : Beirut

Phone: (961 4) 402952Aus t ra l i an Embassy in Be i ru t , Lebanon Embassy ComplexSerail HillBeirut, Centre-VilleLebanonCity : BeirutPhone: (961-1) 974030

Emb assy o f Aus t r ia i n Be i ru t , Lebanon Avenue Charles Malek, Tabaris 812 Bldg., 8. FloorTabaris - AchrafiehBeirut, LebanonCity : Beirut

Phone: (+961) (1) 21 73 60- (+961) (1) 21 74 12 - (+961) (1) 21 74 91

Emb assy o f Be lg ium in Be i ru t , Lebanon Batiment Lazarieh - bloc A10eme etage - Rue Emir BechirBeyrouth Centre VilleCity : BeirutPhone: + (961) (0)1/97.60.01 to 05

Consulat e of Bel ize in Jdeidet El Metn , Lebanon Fanar, Saga Consept BuildingP.O.Box 90-887Jdeidet El Metn 12022070LebanonCity : Jdeidet El Metn

Phone: (961)1 87242- (961) 42-1-8974501

Bulgar ian Embassy in Be i ru t , LebanonHazmieh, MarTakla, sector 6, str.44Beirut, LebanonCity : BeirutPhone: 00961 5452883-00961 5453658


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Em bassy of Canada in Bei r ut , Lebanon First Floor, Coolrite Building, 43 Jal El Dib HighwayBeirut, LebanonCity : BeirutPhone: 961 (4) 713-900

Chin ese Em bassy in Bei rut , Lebanon

72, Rue Nicolas Ibrahim Sursock

Ramlet BaidaBeirut, LebanonCity : BeirutPhone: 00961-1-850314

Em bassy of Colom bia in Bei rut , Lebanon Jal El Dib, Center Mazda, Flr 5Beirut, LebanonCity : BeirutPhone: (961) 4 712646-(961) 4 712648 -(961) 4 712647

General Honor ary Consulate of Costa Rica in Bei ru t , Lebanon Abd-El-Baki Bldg1st Floor Facing Broadway Center Hamra Street,Beirut, LebanonCity : BeirutPhone: 00 (961) 134-34-64 / 00 (961) 134-34-54

Consulat e of the Republ ic of Croat ia in Bei rut , Lebanon Sofil Center, Floor 4Ashrafia, BeirutLebanonCity : BeirutPhone: 0096 11219 533

Em bassy of Cuba in Bei ru t , Lebanon Hazmieh-Mar TaklaRue Said FreihaCenter Farrania

2901 6727 Beirut, LebanonCity : BeirutPhone: (961) 05-459925

Honorary Consu la te o f t he Repub l i c o f Cyprus in Be i ru t , Lebanon Cyprus AirwaysStarco Building, - Block CGround FloorCentral BeirutLebanonCity : BeirutPhone: (00961) 1 366192, (00961) 3 691700 (Mob.)

Emb assy o f t he Repub l i c o f Cyprus in Be i ru t , Lebanon M.N.C. BuildingDebbas StreetRmeil-AchrafiehBeirut, LebanonCity : BeirutPhone: (+ 961) 1 326461-(+ 961) 1 329500- (+ 961) 1 217902- (+ 961) 1 217897


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Em bassy of the Czech Repub l ic in Bei rut , Lebanon Antonieh Str., Baabda, BeyrouthP.O. Box 40-195City : BeirutPhone: 009615/929010-(961)5/929011-(961)5/929012-(961)5/929013-(961)5/929101

Royal Danish Em bassy in Lebanon Embassy ComplexArmy StreetSerail Hill, Down TownBeirut, LebanonP.O. Box: 11-5190City : BeirutPhone: +961 1 991 001 /2/3/4/5/8Honorary Consu la te o f t he Domin ican Repub l i c i n Be i ru t , Lebanon Property Said RahalHadet-BaadbaCity : BeirutPhone: (961) 5 460 440

Ecuador ian Consulate in Bei rut , Lebanon

Marignan Medcom Center (11th Floor)Rue du Caire (Near A.U.H) Hamra sectorP.O.Box. 113-5770 HamraBeirut, Lebanon.City : BeirutPhone: 961-1-344234; 961-1-353 648; 961-1-344 234

Em bassy of Egyp t in Lebanon 4653 Dr. Muhammed El-Bethri st. - Be'ar HassanCity : BeirutPhone: (009611) 859977 - 825566Fax: (009611) 859988

Em bassy of Fin lan d in Bei rut , Lebanon Sadat Tower, 5th floor

Sadat StreetPostal Address:P.O.Box 113-5966City : BeirutPhone: + 961 1 802 275/ 6

Honorary Consu la te Genera l o f F in land in Be i ru t , Lebanon 30, rue BadaroChaoui Building, 3rd Floor, BadaroPostal address: Honorary Consulate General of FinlandP.O. Box 11-7956 OmnipharmaCity : BeirutPhone: +961-1-396704, -705-708

Em bassy of Fran ce in Bei rut , Lebanon Rue de Damas - Espace des LettresRas El-Nabaa - BeyrouthCity : BeirutPhone: [961] (1) 42 00 00


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Consulat e General of Fran ce in Bei rut , Lebanon Espace des Lettres - Batiment ARue de DamasBP 11-477 - BeirutCity : BeirutPhone: [961] (1) 42 00 00

German Embassy in Lebanon

B.P. 11-2820 Riad El-SolhBeirut 1102 2110LebanonCity : BeirutPhone: (00961 4) 91 44 44

Em bassy of Greece in Bei rut , Lebanon P.O. Box 11-0309City : BeirutPhone: (009614) 418772, 521700, 524378

Danish Em bassy in Lebanon Embassy ComplexArmy StreetSrail Hill Down Town

Beirut, LebanonCity : BeirutPhone: +961 (1) 991 001

Honorary Consu la te o f Guatem ala in Be i ru t , Lebanon Ras Beirut Street Justinian CenterCity : BeirutPhone: 00961 3 691916Fax: 00961 134-5457

Consu la te o f Guyana in Be i ru t , Lebanon Selim Bustros Street 1st Floor E1 Dar Building Achrafteh, Beirut, Lebanon.City : BeirutPhone: 961-1-202-220 / 961-1-200-689

I nd ian Emb assy o f I nd ia in Lebanon 31, Kantari StreetSahmarani BuildingP.O. Box No. 113-5240 ( Hamra ),&11-1764 ,Beirut,-1107-2090City : BeirutPhone: 00-961-1-373539, 372619

Emb assy o f I ndones ia in Baabda, Lebanon Presidential Palace AvenueRue 68 Sector 3, No. 3237(P.O.BOX 4007)City : BaabdaPhone: (961-5) 924-682, 924-683, 924-676

Honorary Consu la te o f I ndones ia in T r ipo l i , Lebanon Boulevard StreetKhlat BuildingTripoli, LebanonCity : TripoliPhone: (961-6) 433-913


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Emb assy o f The Repub l i c o f I raq in Lebanon Phone: 009615 - 453209 / 009615 - 435211Fax: 009615 459850

Honorary Consu l Genera l i n Be i ru t , LebanonRue de ChilieKollelat Building - VerdunP.O. Box 11-746SPINAL LECity : BeirutPhone: +961-1-863-040 / -863-239

Emb assy o f I t a l y i n Be i ru t , Lebanon Rue du Palais Presidentiel2902 2633 - BaabdaP.O. Box 57 BaabdaCity : BaabdaPhone: 961 5 954955

Jamaican Consulat e in Lebanon Mme Curie StreetMinkara Centre Bldg., 3rd Fl.Hamra, P. O. Box 5584City : BeirutPhone: 747-244/5/6, 352425, 340736

Em bassy of Japan in Bei ru t , Lebanon Serail Hill Area, Army Street,Zokak el Blat, near the Grand SerailP.O.Box 11-3360, LebanonCity : BeirutPhone: +961-1-989751

Emb assy o f Jo rdan in Be i ru t , Lebanon

Babda/ Elias Al HiloPO Box 5113City : BeirutPhone: +96-1-5922501/+96-1-5922500

Kuw ai t i Embassy in Be i ru t , Lebanon Bir Hassan RoadPoint Cit SportiveP.O.Box 4380BeirutLebanonCity : BeirutPhone: (+961-1) 822515/6/7 or (+961-1) 85252

Em bassy of Malays ia in Bei rut , Lebanon 5 & 6 Floor, Halawani BuildingSalah Eldin Al Ayyoubi Str,Ras Beirut, Beirut, Republic of LebanonCity : BeirutPhone: 00 961 1 787144 or 00 961 1 787166


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Honorary Consu la te o f Ma l ta in Be i ru t , Lebanon Pres. Elias Sarkis AvenueSarraf BuildingAchrafiehP.O. Box 165533Beirut

City : BeirutPhone: 00961 (1) 322 999; 328 999

Em bassy of Mex ico in Bei rut , Lebanon Secteur 2, str. 53Mansour Bldg # 90, 1st. floorNew NaccacheCity : BeirutPhone: (961-4) 418-870 al 72

Emb assy o f Morocco in Be i ru t , Lebanon.BIR HASSANRUE DES NAT. UNIES- PRES DE L'UNUFILBeirutCity : Beirut

Phone: (+961) (1) 85 98 51, (+961) (1) 85 98 29

Honorary Consu la te Genera l o f Nepa l i n Be i ru t , Lebanon Street-Nadim Comair Bldg,City : BeirutPhone: 00961-1-386-690

Emb assy o f t h e K ingdom o f t h e Nether lands in Be i ru t , Lebanon Netherlands TowerCharles Malek Avenue,Opposite Centre Sofil2073-0802 Achrafieh1100-2190City : BeirutPhone: 00-961-1-204663

Roya l Norweg ian Embassy in Be i ru t Embassy Complex, Serail HillPostal Address: P.O. Box 113.7001, Hamra, 1103-2150City : BeirutPhone: +961-1-960-000

Emb assy o f t he Su l tana te o f Be i ru t , Lebanon Al- Remla Al- Bida Venezuele StreetAl-Tyser BldgP.O. Box 135900 Beirut ShouranCity : BeirutPhone: (009611) 856555

Embassy of Pak is tan in Bei rut , Lebanon Watta Moseitbeh,Gabriel El Mur StreetDar Salam Building Beirut- LebanonCity : BeirutPhone: (+961-1) -835453 &835634


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Emb assy o f t he Ph i l i pp ines in Be i ru t , Lebanon Building No. 29Plot No. 511Charles Malik Avenue Across Roadster DinerAchrafieh, Beirut LebanonP.O. Box No. 136631City : Beirut

Phone: (9611) 212-001 to 3

The Em bassy of the Republ ic of Poland in Bei r ut Av. President Suleiman Frangieh52 /Raymond Khalife Bldg.40-215 BaabdaCity : BeirutPhone: 05-928-881, 05-468-152

Emb assy o f t he Sta te o f Qata rShoran-Dabs Buildint, 1st FloorBeirutLebanonCity : BeirutPhone: (+961-1) 865271

Em bassy of Rom ania in Baabda, Lebanon Route du Palais Prsidentiel,BaabdaLebanonCity : BaabdaPhone: (00) (961) (5) 924848 or 924849

Em bassy of Russ ia in Bei rut , Lebanon Beirut-Rue Mar Elias el-Tina, B.P. 5220, Beirut, LebanonCity : BeirutPhone: (+9611) 30-0042

Consulat e General of San Mar ino in Bei ru t , LebanonAutoroute Jal El Bid

Yachouhi BuildingCity : BeirutPhone: +961-4-714002

Seychel les Consulat e Bei rut , Lebanon PO Box 55363, BeirutCity : BeirutPhone: (+961-1) 680674

Consulat e of Sierr a Leone in Lebanon Speats St, near the Lebanese Red Cross building P.O.Box 112016City : BeirutPhone: +961-1-367264

Consulate of Singapore in Lebanon Center Sofil, Charles Malek Avenue AchrafiehAchrafiehCity : BeirutPhone: +961-1-334-335 / +961-1-200-786/+961-1-200-787


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Slovenia Em bassy in Lebanon

JouniehPO Box 818City : Jounieh BeyrouthPhone: +961-9-900003

Emb assy o f Nor th Korea in Mousa i tbeh , Lebanon Camelia 3 bldg, 5th floor, Said Freiha StreetPO Box 40-290 BaabdaHazmiehCity : BaabdaPhone: +961-5-953167/+961-5-953169

Em bassy of Spain in Lebanon Palais Chehab, Hadath AntounieB.P.: 11/3039City : BeirutPhone: (+961) 5 46 41 20

Emb assy o f Sudan in Be i ru t , Lebanon Minkara Building

Verdun StreetCity : BeirutPhone: +961.1.353.270

Consulat e-General of Sw eden, Bei rut Fattal BuildingEcochard Avenue, Sin El FilBeirutLebanonCity : BeirutPhone: +961 (1) 485489

Syr ian Emb assy in Be i ru t , Lebanon Hamra StreetHamraCity : Beirut

Phone: 009611735849/ 009611736145

Emb assy o f Uk ra ine in Lebanon Sin El-Fil, Jisr Al-Bacha,Al-Bacha Gardens, Bloc BCity : BeirutPhone: (+961-1)-510527 / 510531 / 511971

Emb assy o f Un i ted Arab Emi ra t es in Be i ru t , Lebanon Al Janah - Ramlah Al Bayda, Opposite to Edin RockBeirut, LebanonCity : BeirutPhone: +961-1-8570006

Emb assy o f Grea t Br i t a in in Be i ru t , Lebanon Serail HillBeirut Central DistrictPO Box : 11- 471 BeirutLebanonCity : BeirutPhone: 00961 (0)1 990400


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Emb assy o f t he Un i ted S ta tes in Be i ru t , Lebanon Awkar facing the MinicipalityP.O.Box: 70-840 AnteliasLebanonCity : BeirutPhone: (961) 4 542600 543600

Emb assy o f U rug uay in Lebanon Rue Banque du Liban, Immeuble, Stella Maris , 3e. Etage, JouniehCity : BeirutPhone: +9619 63-65-29 / +9619 63-65-30

Em bassy of Venezuela in Lebanon Rue Marche Zalka Breezevale House, 5th floorBeirut, LebanonCity : BeirutPhone: +961-1-88-87-01 / +961-1-88-87-16

Emb assy o f Yemen in Be i ru t ,P.O.Box 114Beirut

LebanonCity : BeirutPhone: (+961-1) 852691/2, 852688

3. Are there prohibitions or restrictions on certain business dealings with the country?

There are generally no such restrictions or prohibitions, subject to compliance with the

relevantregulations.

4. Explain any travel restrictions to or within the country?

Thereareneithertravelrestrictionswithinthecountrynortothecountrywiththeexception

ofIsrael:IsraelicitizenscannotentertheLebanesesoilandanypersonwhohasanentryvisa

toIsraelonhispassportcannotenterLebanon.

C. Government

1. Explain your countrys election system and schedule. Is there an anticipated changein the present government?

Thereare128membersofParliament,halfofwhichareChristiansandhalfMuslims.Each

candidateiselectedforafouryearmandate.

EveryLebanesecitizenaged21(Maleorfemale)canvote.

There isnoanticipated change in the current government, itwas appointed following the

generalelectionsinJuneof2009andshouldremainassuchforfouryears.


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2. Is the present government stable? Briefly explain your countrys political history inthe last decade.

Intheyear2000,IsraelpulledoutfromthesouthofLebanon.

OnSeptember2,2004,theUNSecurityCounciladoptedUNSecurityCouncilResolution1559,

coauthored by France and the United States. Echoing the Taif Agreement, the resolution

"callsuponallremainingforeignforcestowithdrawfromLebanon"and"forthedisbanding

anddisarmamentofallLebaneseandnonLebanesemilitias."

OnFebruary14,2005,RafikHariri,theformerPrimeMinisterofLebanonwasassassinated,

andastringofpoliticalassassinationsandterroristattackstookplaceinthecountry.

International pressure for the withdrawal of Syria intensified and public perception in

LebanonturnedstronglyagainstSyria,evidencedbymassdemonstrationsthatwerelabeled

theCedarRevolution.PresidentBasharalAssadofSyriaannouncedonMarch5,2005thathe

planned to "bring his forces home." The withdrawal, involving about 14,000 troops, took

aboutsevenweekstocomplete.

OnMay7,2005MichelAoun,Lebanesepoliticianandformermilitarycommander,returned

toLebanonafter15yearsofexile.

On April 26, 2005, after 29 years of military action in Lebanon, the last Syrian troops left

Lebanon.

Thegovernment(presidedbyOmarKarami)resignedandatransitionalgovernmentwasput

inplace(presidedbyNajibMikati),afterthreemonths,thenewgovernmentwasformedby

FouadSiniora.

Parliamentpassedanamnestybillon18 July2005to freeSamirGeagea,the leaderofthe

Lebanese forces political party that had been imprisoned for the last11years for his war

crimes.GeageawasreleasedfromprisononJuly26,2005.

October31,2005:TheUNSecurityCouncilunanimouslyapproveda resolutiondemanding

SyriatocooperatewithaUNinvestigationintotheassassinationofLebanon'sformerprime

minister,threateningfurtheractionagainstDamascusifitcontinuestostonewall.

12July2006:WarwithIsraelbegins.


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The conflict continued until a United Nationsbrokered ceasefire went into effect in the

morningon14August2006,thoughitformallyendedon8September2006whenIsraellifted

itsnavalblockadeofLebanon.

The2007LebanonconflictbeganwhenfightingbrokeoutbetweenFatahalIslam,anIslamist

militant organization, and the Lebanese Armed Forces (LAF) on May 20, 2007 in Nahr alBared, an UNRWA Palestinian refugee camp near Tripoli. It was the most severe internal

fightingsinceLebanon's197590CivilWar.

November2007:PresidentEmileLahoudresignsandLebanonstayswithoutapresidentfor6

months.

May2008:ConflictinBeirutbetweenthegovernmentandtheopposition.

TheDohaAgreementwasreachedbyrivalLebanesefactionsonMay21,2008inDoha,Qatar

which resolved several issues including electing Michel Suleiman as president of Lebanon,

and forminganationalunitygovernmentcomposedof30ministersdistributedamong the

majority(16ministers),theopposition(11ministers)andthepresident(3ministers).

May25,2008:PresidentMichelSleimanwasswornintoofficeasPresidentofLebanon.

JuneOctober2009:ThepresentGovernmentpresidedbySaadHariri, sonof the lateRafic

Hariri,wasformedfollowinggeneralelections.

3. Explain your countrys judicial system. Be sure to answer the following questions:

Is the judicial system generally perceived to be impartial? Must disputes be resolved in the country?

Is there a political method of resolving disputes?

Are alternative methods of dispute resolution permitted?

How long does it take to resolve disputes?

Can foreign judicial decisions be enforced in the country?

Can decisions from the country be enforced outside the country?

Are there separate tribunals depending upon the subject matter of the case?

Are there different legal systems within the country or its political subdivisions?

Can the investor choose to be subject to the country's jurisdiction or not?

The Lebanesejudiciary system is structured in a way that makes it similar to the existing

systemsinWesterncountries.

JusticeissecuredattwolevelsbytheFirstDegreeCourtsandCourtsofAppeal.Alastresort

is theCourtofCassation (SupremeCourt)sitting inBeirut,comprisingofseveralchambers

andoneplenaryassembly.


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Thejudicialsystemisgenerallyperceivedasimpartial.

Disputescanberesolvedoutsidethecountry,ifthepartieschoosetosubmitthedisputetoa

foreigncourtandfreelychosetheapplicablelawexceptforcommercialagenciesthatshould

begovernedbyLebanese lawandsubmitted to theLebanesecourtsasperDecreelawno34/67ofAugust5,1967governingcommercialagenciesinLebanon.

Alternative methods of dispute resolution are permitted: disputes resulting from the

executionorinterpretationofcivilorcommercialcontractscanbesubmittedbytheparties

toarbitration.Thearbitrationclausemustbestipulatedinthecontractorinanaddendum.

The period of time necessary to resolve disputes depends on each case. It is generally

perceivedasalongprocedure.

Astotheenforcementofforeignjudgments,ajudgmentdeliveredbyaforeigncourtcanbe

enforced in Lebanon through an enforcement order (exequatur) issued by the Lebanese

judicialauthority.TheenforcementapplicationissubmittedtotheCourtofAppealofBeirut

andisgrantedtoforeignjudgmentssubjecttospecificconditions.Thereisnoreviewofthe

meritsinthecontextofsuchprocedure.

Courtsareorganizedaccordingtothesubjectmatterofthecase.Acommercialmatterwillbe

submittedtothecourtsittingincommercialmatters.Therearespecialcourtssuchasmilitary

courtsthatdealwithmilitaryissues,andreligiouscourtsthatdealwithfamilylawmattersin

accordance with the relevant religious laws. Inheritance matters for nonMuslims are

governedbycivillawsandsettledbycivilcourts.

Therearenodifferentlegalsystemswithinthecountryoritspoliticalsubdivisions.

4. Explain your countrys legislative system.

Laws are enacted by Parliament; bills may be prepared by the government. They are then

proposed to the Parliament to be voted. Parliament may enable the government for a

determinedperiodoftimetotakeDecreeLawsinparticularmatters.

D. Environmental Considerations

1. What is the public/government attitude toward environmental regulation?2. Explain any environmental regulations.

Lebanons environmental regulations are relatively recent. The Ministry of Environment

(http://www.moe.gov.lb/) was established by Law no. 216 of April 2, 1993. Such law was

laterreplacedbyLawno.690ofAugust26,2005thatredefinedtheroleandorganizationof


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19

the Ministry. The Ministry of Environments general duties are to formulate a general

environmentalpolicyandproposemeasuresforitsimplementationincoordinationwiththe

various concerned government administrations, to protect the natural and manmade

environments inthe interestsofpublichealthandwelfare,andtofightpollutionbytaking

preventiveand remedialaction.The ultimate longtermobjectivesof the Ministry are the

following:

Preparetheappropriatelegislativeframeworktoenforceenvironmentalpractices.

Initiateworkingplansandprogrammessettingtheaccurate indicatorsandstandards inenvironmentallyaffectedsectors(privateandpublic).

Launchingpublicawarenesscampaignsthroughcoreacademiccurriculaandthroughthedifferentaudiovisualmedia.

Impose application of Environmental Impact Assessment (EIA) on vital developmentalprojects,andsubstituteproblematicplanswithenvironmentallyfriendlyones.

EmpowerlocalNGOs'roleinthecivilsociety.

A number of laws, decrees, and ministerial decisions govern environmental matters. A

frameworklawfortheprotectionoftheenvironmentwasadoptedin1988andamendedin

2002 (Law 444 of July 29, 2002), which defines the basis and norms for environmental

protectionnotablyforwater,soil,useofchemicalsandresourcemanagementaswellas

institutional,administrativeandtechnicalaspects.

Lebanon has signed and/or ratified the following international conventions, treaties and

protocols:

2001 Stockholm Convention on Persistant Organic pollutants for adoption by the conference

of plenipotentiaries.

1999 Convention on Wetlands of International Importance especially as Waterfowl Habitat.-

Ramsar.

1994 United Nations Convention to Combat Desertification.-Paris.

1992 United Nations Framework Convention on Climate Change.-Rio de Janeiro.

1992 Convention on Biological Diversity.-Rio de Janeiro.

1992 Amendment to the Montreal Protocol on Substances that deplete the Ozone Layer.-

Copenhagen.

1990 Amendment to the Montreal Protocol on Substances that deplete the Ozone Layer.-

London.


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1989 Basel Convention on the Control of Transboudary Movements of Hazardous Wastes and

their Disposal.-Basel.

1987 Montreal Protocol on Substances that deplete the Ozone Layer.-Montreal.

1985 Vienna Convention for the Protection of the Ozone Layer.-Vienna.

1982 Protocol Concerning Mediterranean Specially Protected Areas.

1980 Protocol for the Protection of the Mediterranean Sea against Pollution from Land-based

Sources.-Athens.

1976 Convention on the Prohibition of Military or any other hostile use of Environmental

Modification Techniques.-Geneva.

1976 Protocol Concerning Co-operation in Combating Pollution of the Mediterranean Sea by

Oil and Other Harmful Substances in Cases of Emergency.-Barcelona.

1976 Convention for the Protection of the Mediterranean Sea against Pollution.- Barcelona.

1976 Protocol for the Prevention and Elimination of Pollution of the Mediterranean Sea by

Dumping from Ships and Aircraft.-Barcelona.

1973 International Convention for the Prevention of Pollution from Ships.-London.

1972 Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other

Matter.-London-Mexico city-Moscow-Washington.

1971 Treaty on the Prohibition of the Emplacement of Nuclear Weapons and other Weapons

of Mass Destruction on the Seabed and the Ocean floor and in the Subsoil.-London-

Moscow-Washington.1969 International Convention relating to Intervention on the High Seas in cases of Oil

Pollution Casualties.-Brussels.

1969 International Convention on Civil Liability for Oil Pollution Damage.-Brussels.

1954 International Convention for the Prevention of Pollution of the Sea by Oil.-London.

III. INVESTMENTINCENTIVES

A.

Explainany

export

incentives

or

guarantees.

Be

sure

to

answer

the

following

questions:

Aretheretaxincentivesforexports?

No.


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21

Ifso,aretheylimitedtocertaintypesofproducts?

N/A.

Isexportfinancingavailablefromgovernmentorprivatesources?

N/A. Ifso,whatformsoffinancingorguaranteesareavailable?

N/A.

Isthereanygovernmentalinsuranceforexports?

No.

Mustanationalbeaparticipant in theenterprise inorder for the investor tobenefitfromtheseincentives?

N/A.B. Explainanygrants,subsidiesorfundsyourcountryoffersforeign investors.Besureto

answerthefollowingquestions:

Aregrantsandsubsidiesrestrictedbythetypeofactivity?

Touristic,agriculturalandindustrialenterprisescarryingoutprojectsinLebanoncanbenefit

fromStatesubsidy,throughtheCentralBankofLebanon,ontheinterestoftheloansgranted

bybanksoperatinginLebanon,accordingtocertaineligibilitycriteria,aspertheCentralBank

basiccircularno.80dated2January2001.Smallandmediumsizedenterprises (SMEs)operating throughoutLebanon in the industry,

agriculture,tourism,traditionalcraftsandhightechnologysectorsmayobtainguaranteesto

the loans granted by banks operating in Lebanon from Kafalat SAL, a Lebanese financial

company established by the Lebanese government. Kafalat SAL is owned by the National

Institute for the Guarantee of Deposits (75%) and by fifty Lebanese banks (25%). Kafalat

guaranteed

loans

benefit

from

interest

rate

subsidies

financed

by

the

Lebanese

Treasury

and

administeredbytheCentralBankofLebanon.

Whatistheprocessforobtainingapprovalforthesegrantsorsubsidies?

Submit an application with the necessary supporting documents to the bank granting the

loanand/ortoKafalatSAL.


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22

Howlongdoesittaketoreceiveapproval?

Oncetheapplicationisreceivedalongwiththenecessarysupportingdocumentsevidencing

that the applicant meets the necessary requirements, the decision process to approve or

rejectanapplicationtakesuptofourweeks. Cantheinvestorreceiveloansfromthegovernmentorgovernmentalagencies?

No.

Mustanationalbeaparticipant in theenterprise inorder for the investor to receivethesegrantsorsubsidies?

TheinvestormustbeestablishedandoperatinginLebanon.

Iftheinvestorisalimitedliabilitycompany,allthepartnersmaybeforeigners.

Iftheinvestorisajointstockcompany,themajorityofthemembersofitsBoardofDirectors

mustbeLebanese.

However,iftheinvestmentprojectisgovernedbytheInvestmentDevelopmentLawno.360

dated August 16, 2001 as amended (regulating investment promotion of domestic and

foreignentitiesandaimingatencouragingLebanon'seconomicand socialdevelopmentas

well as enhancing its competitiveness), then thejoint stock company may be granted a

specialexemptionfromtheaboverequirementbyadecisionoftheInvestmentDevelopment

AuthorityinLebanonIDALprovidedspecificrequirementsaremet(Article174ofthesaid

Law).

C. Explainanynationaltaxincentivesforforeigninvestors.Besuretoanswerthefollowing

questions:

Aretheincentivesrestrictedbythetypeofactivity?Tax incentivesaregrantedby the InvestmentDevelopment Lawno.360dated August16,

2001asamended.Theyarerestrictedtoprojectsintheindustry,agriculture,agroprocessing,

tourism,

information

technology,

communications

and

media

sectors.

Aretheincentivesrestrictedbythedurationoftheactivity?

Theincentivesaregrantedinlightofseveralfactors,includingtheprojectsduration.


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23

Whatistheprocessofapplication?

The process of application consists of submitting an application with the necessary

supportingdocumentstoIDALwhowillevaluatetheprojectanddecidewhethertograntthe

incentivesavailable.

D. Explain any regional tax incentives open to foreign investors. Be sure to answer the

followingquestions:

Aretheretaxincentivesfortheinvestorthatexistonlyincertainregionsofthecountry?

TheInvestmentDevelopmentLawno.360datedAugust16,2001dividedLebanonintothree

investmentzones (A,BandC).The incentives for investmentprojectswillbebasedon the

categorizationoftheprojectwithinaparticularinvestmentzone.

Doestheinvestorneedtoreceiveapprovaltobeeligiblefortheseincentives?

Yes,fromIDAL.

Aretheincentivesrestrictedbythetypeofactivity?

The Investment Development Law no. 360 grants incentives to industry, agriculture, agro

processing,tourism,informationtechnology,communicationsandmediaprojects.

Aretheincentivesrestrictedbythedurationoftheactivity?

Theincentivesaregrantedinlightofseveralfactors,includingtheprojectsduration.

Whatdoestheprocessofapplicationinvolve?

Theprocessofapplication involvessubmittinganapplicationwiththenecessarysupporting

documentstoIDALwhowillevaluatetheprojectanddecidewhethertogranttheincentives

available.

IV.FINANCIAL

FACILITIES

1.Banking/FinancialFacilities

Whatkindoffinancialinstitutionsexist?

Commercialbanks


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Private banks (investment banks and long and short term credit banks) such asBanquedel'HabitatSAL(thehousingbank)

Branchesofforeignbanks

Foreignbanksrepresentativeoffice

Financialinstitutions

FinancialinstitutionestablishedbytheLebanesegovernment(Kafalat)

Branchesofforeignfinancialinstitutions

Leasingcompanies

Brokeragefirms

Branchesofforeignbrokeragefirms

Moneydealers

Musttheinvestormaintainabankaccountinthecountry?

No.

Whataretherequirementsforopeningabankaccount?

Therequirementsforopeningabankaccountaremainlythepersonal information(identity

and address), evidence of the source of money and identification of the economical

beneficiary,inaccordancewithapplicablelawsandregulationsonfightingmoneylaundering,

mainlyLawno.318dated20April2001.

Whataretherestrictions,ifany,ontheinvestor'suseoftheaccount?

Therearenoparticularrestrictionsontheinvestorsuseoftheaccountexceptforcompliance

withthelawsandregulationsonfightingmoneylaundering,mainlyLawno.318datedApril

20,2001.

Whatisthetypeoffinancialsysteminthecountry?

Thefinancialsystemisliberalwithfreetransferandexchangeofmoney.

Howisthebankingsystemstructured?

Thereare localbanksandfinancial institutionsandbranchesofforeignbanksandfinancial

institutions.TheCentralBankofLebanongrantslicensesfortheestablishmentofbanksand

financial institutions and the Banking Control Commission controls and supervises such

institutions.


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Isthereastockmarket?

Yes,theBeirutStockExchange.

Can

the

investor

receive

bank

loans?

Yes.

V.EXCHANGECONTROLS1.BusinessTransactionswithNationals,ResidentsorNonResidents

Howarenationals,residentsandnonresidentsdefined?

Thereisnolegaldefinition.NationalsmaybedefinedasthepersonswhoholdtheLebanese

citizenship.ResidentsarepersonshavingapermanentaddressinLebanon.

Arethererestrictionsonconductingbusinesswithnationals,residentsornonresidents?

No, except that conducting business with a resident of Israel or an Israeli national is

prohibited.

Aretherereportingrequirements?

No.

Cantheinvestorreceiveloansfromnationals,residentsornonresidents?

Yes,subjecttotheprohibitionofdealingswithIsraelinationalsorresidentsofIsrael.

2.InvestmentControls

Arethererestrictionsondirectinvestmentinthecountry?

The acquisition of real estate properties in Lebanon by foreigners, whether individuals or

legal

entities,

must

be

authorized

by

the

Council

of

Ministers

if

the

total

surface

area

acquired

exceeds3,000sqmeterswithinthewholeLebaneseterritory.


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Are there restrictions on indirect investments in the country? Must the investor make

declarationsregardingthenatureofhisinvestment?

Therestrictionsonindirectinvestmentsarethefollowing:

Themajorityof themembersof theBoardofDirectorsofajoint stockcompanymustbe

Lebanese.

Companiescarryingoutcommercialrepresentationactivities(DecreeLawno.34of5August

1967)aresubjecttothefollowingrestrictions:

(a) If the company is a partnership or a limited liability company, the majority ofpartners must be Lebanese nationals, and they must hold the majority of the

companyscapital.

(b) If the company is a joint stock company, its shares must be in the form ofregistered shares and the majority of its capital must be held by Lebanese

nationals. Also at least two thirds of its Board members must be of Lebanese

nationality.Inallcases,themanagementofthecompanymustbeentrustedtoa

Lebanesenational.

Jointstockcompanycarryingoutshippingagencyactivities:Halfofitscapitalmustbeheldby

Lebanese nationals. For limited liability companies, 51% of the capital must be held by

Lebanesenationals.

Companies wishing to publish political magazines (Law of September 14, 1962 regarding

printingmatters)aresubjecttothefollowingrestrictions:

a) Forlimitedliabilitycompaniesandpartnerships,allpartnersmustbeLebanesenationals.

b) For partnerships by shares, partners who are personally liable must be

Lebanese.

c) Forjoint stock companies, all shares must be held by Lebanesenationals or

Lebanesecompanies.

Joint stock companies runningapublicutilitymusthaveone thirdof theircapitalheldby

Lebanese

nationals.

Investorsdonothavetomakedeclarationsregardingthenatureoftheirinvestment.


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3.MoneyTransfer

Istherefreedeterminationofexchangerates?

Yes.

Arethererestrictionsonthetransferofmoneyintooroutofthecountry?

No,exceptforcompliancewithlawsandregulationsonfightingmoneylaundering(Lawno.

318dated20April2001.

Arethererestrictionsontheremittanceofprofitsabroad?

No.

Aretherereportingrequirements?

No.

Canhardcurrencybetakenoutofthecountry?

Yes.

VI.IMPORT/EXPORTREGULATIONS

1.CustomsRegulations

IsthecountryamemberofGATT?

Yes.

IsthecountryamemberoftheEEC?

No.However,on17June2002LebanonsignedinLuxembourgtheEUROMEDagreementwith

the

European

Union

and

its

members,

which

was

ratified

by

Law

no.

474

dated

12

December

2002.

Isthecountryapartytoaregionalfreetradeagreement?

In1997,LebanonsignedtheAgreementtoFacilitateandDevelopTradeamongArabStates.


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Lebanon has also signed bilateral agreements, such as the liberalization agreement of

LebaneseSyrian trade signed in February 1998 regarding the progressive liberalization of

tradebetweenthetwocountries.

DoestheCustomsDepartmentvaluethegoods?

Yes.

Howaregoodsclearedthroughcustoms?

FollowingthedeclarationofthegoodstoCustoms,thelatterverifiesitsvalidity,includingthe

inspectionofgoods;then,thedutiesaresetincompliancewithCustomstariffsorthetariff

providedforinapplicablelawsandregulations.Finally,thedutiesarepaidattheCustoms'

Treasuryagainstareceipt.

Are

there

applicable

tariffs?

Yes,inlinewiththeCustomstariffbook.

2.Exports

Arethererestrictionsonexports?

In addition to the prohibition of exporting to Israel, Lebanon operates export control on

goods on an itemby item basis. Some items areprohibited from being exported, suchas

weapons,

ammunitions,

narcotics

and

archeological

pieces

and

currencies,

while

export

of

otheritemsissubjecttotheauthorizationofdesignatednationalauthorities.Allsuchitems

aredetailedinascheduleestablishedbytheCustomsAuthorities.

Areexportlicensesrequired?

Exportofsomeitemsrequirespriorauthorization.

Arethereapplicableexportduties?

No.

3.ForeignTradeRegulations

Arethereforeigntraderegulationsontheimportorexportofgoodsinvolvedinthebusiness?

Yes.


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4.Imports

Areimportlicensesrequired?

Someproductsrequireanimportlicense. Arethereapplicableimportduties?

Yes.

Arethereapplicableimportquotas?

No.

Arethereapplicableimportbarriers?

AllimportsfromIsraelareprohibited.

The importationofsomefruitsandvegetables isforbidden inspecificseasonsanddatesto

protectlocalagriculture.

Apriorlicenseisrequiredtoimportsomeproducts,suchasceramicsanitaryware,insulated

wire,telephonewireandcoppercables.

5.ManufacturingRequirements

Must

the

product

contain

ingredients

or

components,

which

are

found

or

produced

only

in

the

country?

No.

Willtheimportationofcertaincomponentpartsbepermittedonlyiftheyaretobeultimately

incorporatedinafinalproduct?

No.

6.ProductLabeling

Are there applicable labeling or packaging requirements (e.g. multilingual notices, safety

warnings,listingofingredients,etc.)?

Theapplicablelabelingorpackagingrequirementsarethefollowing:safetywarnings,listing

of ingredients, production and expiry dates. The English and French language would be

accepted.


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VII. STRUCTURES FOR DOING BUSINESS

1. Governmental Participation- Will the government seek to participate in the ownership or operation of the entity (e.g.depending on the type of activity involved)?- If so, to what extent?- What is the investor's potential liability to partners, investors or others?- Are there restrictions on capitalization?- What are the investor's tax consequences? (see also Sections XII and XIII)

Lebanonenjoysawidelyliberalandopenlegalsystemforforeigninvestors,theymayfreely

dobusiness inLebanonandmayown localcompanies.Thegovernmentwouldnotseek to

participate in the ownership or operation of the entity, and there are no restrictions on

capitalization.

2. Joint Ventures

- Are joint ventures permitted?- If so, what is the registration or incorporation procedure?- How long do these procedures take?- What costs and fees are involved?- Must a national of the country or a related state, (e.g. the EEC) be a participant, manageror director?- What is the investor's potential liability?- Are there restrictions on capitalization?- What are the investor's tax consequences?

Jointventuresarepermitted,andtheyareestablishedbyprivateagreementssettingoutthe

rights and obligations of the parties. Deprived of legal entity, the joint venture is notsubmittedtotheincorporationorpublicationformalities.Consequently,eachpartnerdealing

with a third party is considered to be dealing in his own name and for his account. Such

partneristhereforepersonallyresponsibleforthecompanysdebts.

Thereisnoobligationforanationaltobeaparticipant,managerordirectorandthereareno

restrictionsoncapitalization.

3. Limited Liability Companies- Are limited liability companies permitted?- If so, how are they registered or incorporated?

- How long do these procedures take?- What costs and fees are involved?- Must a national of the country or a related state be a participant, manager or director?- Are there restrictions on capitalization?- What are the investor's tax consequences?


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ThelimitedliabilitycompanywasmadepossiblebyDecreeno.35dated5August1967.Itis

registered,asforanycompanywhoseheadofficeisinLebanon,attheCommercialRegister

oftheregionwheresuchheadofficeislocated.Registrationisrequestedwithinonemonthof

thecompanysformation.

Theregistrationproceduretakesapproximatelythreedays.

There is no obligation for a national to be participant, manager or director. There are no

restrictionsoncapitalizationbutthelimitedliabilitycompanymusthaveaminimumcapital

of LL 5,000,000 (approximately US $ 3,334) and it cannot be involved in operations of

insurance,airlines,transport,bankingandinvestmentoffundsandlocallegislationprohibits

thelimitedliabilitycompanyfromissuingnegotiableorregisteredcertificatesortransferable

securities,stocks,bondsorshares.

The limited liabilitycompany issubjecttothecorporations incometaxatthe fixedrateof

15%ofnetprofitsand toawithholding taxondividendsof10%.Expensesandchargesas

expresslydefinedbythelawaretaxdeductible.Thisrateiscutdowntohalfforthetaxlevied

on revenues earned by companies when they are generated from the construction or

developmentofbuildingsorhousingunitsforsaletothepublic.

Incorporationdocuments:

TheArticlesofAssociationsignedbythepartnersbeforeanotarypublic

orbeforetheHeadoftheCommercialRegister.

Anapplicationaddressedtothebankconcerningtheconsignmentof

thecapital.

Acertificateofthedepositissuedbythebank.

Aregistrationapplication.

Acertificateofregistration.

Acircular.

An

application

addressed

to

the

bank

concerning

the

release

of

the

capital.

An application for the appointment of an additional auditor (if the

capitalexceedsLL30,000,000).


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AnapplicationaddressedtotheMinistryofFinancetogivenoticeofthe

commencementofbusiness.

Costsandfees:

ForacapitalofLL5,000,000(approximatelyUS$3,334),whichistheminimumcapital:

Notarysfees:LL450,000(approximatelyUS$300).

Incorporationfees:(i)afixedfee:LL750,000(approximatelyUS$500),

(ii) a proportional fee of 3 (three per thousand) of the capital (LL

5,000,000x3 1000=LL15,000orUS$10fortheminimumcapital).

Thejudgesmutualfund:(i)afixedfee:LL375,000(approximatelyUS$

250), (ii)aproportional feeof1.5 (oneandahalfperthousand)of

the

capital

(LL

7,500

or

US

$

5

for

the

minimum

capital).

Stamps: LL2,000foreachoriginaldocument.

LL1,000foreachduplicate.

LL20,000fortheoriginalsignedArticlesofAssociation.

LL10,000fortheArticlesofAssociationduplicate.

TheregistrationfeeofaproxyattheBarAssociation:LL100,000.

The attorneys fees range between US $ 1,000 and US $ 3,000

dependingonthefirm.

4. Liability Companies, Unlimited- What are the forms of liability companies?- How are these companies registered or incorporated?- How long do these procedures take?- What costs and fees are involved?- Must a national of the country be a participant, manager or director?

Thelimitedliabilitycompany(SARL)inwhichthepartnersareliablefor

lossestotheextentoftheircontributiontothecapital.

Therearetwoformsofunlimitedliabilitycompanies.Theywillbedealtwithundergeneralandlimitedpartnerships.

Thereisanotherformoflimitedliabilitycompanies:thejointstock

company(SocitAnonyme).


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Jointstockcompanies(SocitAnonyme):

Costsandfees:

FortheminimumcapitalofLL30,000,000(approximatelyUS$20,000):

Notaryfees:LL660,000(approximatelyUS$440)includingthejusticefee.

Incorporationfees:LL1,000,000(approximatelyUS$665).

Thejudgesmutualfund:LL550,000(approximatelyUS$365).

TheotherfeesarethesameasfortheSARL.

Theregistrationproceduredoesnottakemorethanthreedays.

Onethirdofjointstockcompaniescapitalwhoseobjectistheoperationofapublicutility

mustbemadeupofregisteredsharesheldbyLebaneseshareholders.

Injointstockcompanies,themajorityofBoardmembersmustbeLebanese.

5. Partnerships, General or Limited- Are partnerships recognized or permitted?- Must a national of the country or related state be a partner?- If so, to what extent?- What costs and fees are involved?- What is the investor's potential liability?- What are the investor's tax consequences?

Partnershipsarepermittedandthereisnoobligationforanationaltobeapartner.

Costsandfeesinvolved:

Notaryfees:2(twoperthousand)ofthecapitalplusafixedfeethat

mustnotexceedUS$300.

Incorporationfees:LL1,000,000(approximatelyUS$665).

At

the

Commercial

Register:

AfixedfeeofLL750,000(approximatelyUS$500).

Stampdutyfee:3(threeperthousand)ofthecapital.

Thejudgesmutualfund:LL375,000(approximatelyUS$250)+


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1.5(oneandahalfperthousand)ofthecapital.

Thegeneralpartnership(socitennomcollectif,SNC)consistsoftwoormorepartnerswho

arejointlyresponsibleforthecompanysdebtsandobligations.

Everypartnerispersonallyliableforthepartnershipsdebts.Suchliabilityisjointandseveralandconsequentlycanbeenforcedagainstboththepartnershipsassetsandtheassetsofthe

individualpartners.

Limited partnership (socit en commandit simple, SCS) consists of two or more people

dividedintotwocategories:thegeneralpartner,whoisdeemedtobeatraderandisentitled

to takepart in themanagementof thebusinessand ispersonally liable for thedebtsand

obligationsoftheSCS.

The limitedpartner isnotdeemedtobeatraderand isnot liable forthedebtsoftheSCS

beyondhiscontribution.

Eachpartnerissubjecttoindividualincometax.Theactualincomeissubjecttotaxationafter

applyinganallowanceofLL3,000,000 for individuals,asupplementarytaxallowanceofLL

1,500,000formarriedtaxpayers,andLL300,000perlegitimatedependentchild.

6. Partnerships, Undisclosed- Do undisclosed partnerships exist?- If so, how are they formed?- What costs and fees are involved?- Must a national of the country or a related state be a participant, manager or director?- What is the investor's potential liability?- What are the investor's tax consequences?

Undisclosedpartnershipsare in the formof socitenparticipation.Please refer to the

informationprovidedinrelationtojointventures.

7. Sole Proprietorships- Can the investor be a sole proprietor?- How is the sole proprietorship registered or established?- How long does this process take?- What costs and fees are involved?- What is the investor's potential liability?

- Are there restrictions on capitalization?- What are the investor's tax consequences?

Therearenosingleshareholdercompanies.Soleproprietorshipsareintheformof

commercialestablishments(fondsdecommerce).Theownermustregisterasatraderat

therelevantRegisterofCommerceandregisterhisbusiness.Theownercontinuestobe

taxedonhispersonalincome.Thereisnocapitalization.


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8. Subsidiaries/Branches/Representative Offices- Can the investor establish a branch, subsidiary or representative office?- If so, how long does registration or incorporation take?- What costs and fees are involved?- What is the investor's potential liability?- Must a national of the country be a participant, manager or director?- Are there restrictions on capitalization?- What are the investor's tax consequences?- Are these tax consequences different than those of a local company?

Aforeigncompanymayconstituteorestablishabranchoranofficetocarryouttheactivities

ofitsparentcompany.AccordingtoDecreeno.16datedJanuary30,1926,andamendedby

Lawno.4180whichwasissuedonMarch7,1980,astatementmustbefiledwiththeMinistry

ofCommerceandEconomybeforethecompanycanopenoneormorebranchesinLebanon.

RegistrationtakesonemonthatmostandthecostsinvolvedareLL1,800,000(approximately

US $ 1,200). Additional registration fees are payable at the Registry of Commerce in the

amountofapproximatelyLL1,000,000(US$665),inadditiontoLL1,800,000forcompanies

subjecttoDecreeno.96.

Thelocalbranchmaycarryoutalltheactivitiesoftheparentcompany,exceptforrestricted

activitiessuchascommercialagencyactivities.

Representative Offices cannot carry out business. They must restrict their activities to

marketingresearchesandpromotion.

Thereisnoobligationforanationaltobeaparticipant,managerordirectorandtherearenorestrictionsoncapitalization.

BranchesandLebanesesubsidiariesofforeigncompaniesaresubjecttotaxationunderthe

sameconditionsasLebanesecompanies.Regardinglocalbranches,thetaxauthoritiesdeems

thatallamountstransferredtotheheadofficebythelocalbrancharedistributedprofitsand

thussubjecttothe10%tax(subjecttodoubletaxationtreaties).

9. Trusts and Other Fiduciary Entities- Are trusts or other fiduciary entities recognized?- If so, how are each defined?

- What are the legal consequences of a transfer of assets to a trust or fiduciary?- Can the investor be the grantor, trustee or beneficiary?

Trustsarenotrecognized.


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36

Lawno.520dated6June1996entitledDevelopmentoftheFinancialMarketandFiduciary

Contracts recognizedbanks, financialestablishmentsandotherestablishmentsauthorized

bytheCentralBanktoactasfiduciaryagents.

Thetransferofassetstoafiduciaryagentisatransferoftheassetspropertytothefiduciary

agentwhomustholdthefiduciaryassetsdistinctlyfromhispersonalassets.Theinvestorcanbethegrantororthebeneficiary.

VIII. REQUIREMENTS FOR THE ESTABLISHMENT OF A BUSINESS

1. Alien Business Law

- Is the business subject to any alien business law?

No.

- Are there registration or reporting requirements?

2. Antitrust Laws

- Do the entity's operations comply with anti-trust laws?- Are there filing requirements?

Therearenoantitrustlaws.

3. Environmental Regulations

- Is the business of the investor subject to environmental regulation? If so, are there added

costs involved (e.g. audit requirements)?

Forspecificbusinesses,environmentalregulationsapply,includingauditrequirements.

4. Government Approvals- Are government approvals required for the anticipated business?

No, subject to prior licensing for specific activities such as banking, insurance, tourism

activities, andrestaurants.

- If so, how long does this process take?

Itdependsuponthebusinessinvolved.

- What fees are involved?

Feesinvolveddependonthenatureoftheactivity.


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5. Insurance

- Must the enterprise carry insurance?

Theenterprisemustnotcarryoutinsurance.

- If so, what kind of risks must be insured?

- Is there a state monopoly on insurance?

ThereisnoStatemonopolyoninsurance.

6. Licenses/Permits

- Are licenses or permits required for the anticipated activity?

Activitieslikeinsurance,bankingandfinancialactivitiesrequirelicenses.

- If so, how does the investor apply for and receive the necessary license or permit?

TheinvestorhastoapplytotheconcernedMinistryorauthorityandsupplythedocuments

andinformationrequiredtoobtainthepermit.

- How long does it take to receive the license or permit?

Itdependsonthenatureoftheactivityandtheauthorityconcerned.

IX. OPERATION OF THE BUSINESS

1. Advertising- Are there restrictions on advertising?

AdvertisinginLebanonissubjecttolicensingandcontrol.

2. Attorneys

- Is it necessary to have local counsel?

Limitedliabilitycompaniesandjointstockcompaniesmusthavealegalcounsel.

- How can local counsel be found?

TheattorneycanbefoundthroughtheBarorthroughforeignembassiesinLebanon.


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How much are attorneys fees?

TheBeirutBarrecommendsthattheminimumyearlyfeesoftheattorneybesevenmillion

fivehundredthousandLebanesepounds(approximatelyUS$5,000).

3. Bookkeeping Requirements

- Must the investor keep local books of accounts?

Yes,theinvestormustkeeplocalbooksofaccounts.

- In what form must the investor keep accounts (e.g. GAP, in what language, etc.)?

Accountsmustbekept in linewithlocalaccountingstandardsandInternationalAccounting

Standards.

Accounting

books/records

and

accounting

documents

can

be

in

Arabic,

French

or

English.

4. Business Ethics/Codes

- Are there certain business ethics or codes which the investor must follow (e.g. GAAPfor accountants, etc.)?

No.

5. Consumer Protection Laws

- Are there consumer protection laws which apply to the investor's operations?

Yes there isaConsumerProtectionLawnumber659 issuedonFebruary4,2005,and that

becameeffectiveonMay10,2005.

6. Construction

- What are the costs of construction?

Aproportionaltaxisleviedoneachsquaremeteroftheproposedconstructiontobebuiltor

addedirrespectiveofthepurposeofuse,andoneachfloor.

Inaddition, there areamounts tobepaid for the useofMunicipalpublicdomainand for

allocationstopublicprojects.

Moreover,aproportionaltaxisalsoleviedtoestablishsewersandsidewalks.


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- Are permits required for construction?

All new constructions, renovations, reconstructions, restoration works of any kind in any

property

are

subject

to

a

building

permit.

- How is authorization to construct obtained?

Buildingpermitsaregrantedasperapplicablelawsandspecificrulesnotablythoserelatedto

urbanismandpublicsafety.

The building permits application is submitted along specific forms set by the Order of

EngineersandArchitects,isregisteredwithsaidOrderbytheresponsibleengineer,andthen

filedby theengineerattherelevantUrbanismBureau thatstudiestheapplicationwith its

enclosures,conductsthenecessarysurveyandcalculatestherelevantbuildingpermitsfees.

Afterwards,thefileistransferredtotheMunicipalityandthepermitisissuedbytheHeadoftheMunicipalityafterpaymentoftherelevantfees.

In areas where there is no municipality, the Urbanism Bureau transfers the file to the

Mohafazator Caemakamiah (heads of administrative regions) to have the building permit

issuedbytheMohafezorCaemakam.

InBeirutandTripoli,therearenoUrbanismBureaus,andthebuildingpermitsapplicationis

filedtotheMunicipality,transferredtotheadhocTechnicalBureauattheMunicipalityand

thepermitisissuedbytheHeadoftheMunicipality.

- How long does it take to receive authorization?

The relevantUrbanismBureaushould study the fileandgrant thepreliminaryapprovalor

motivatedrefusalwithinthefollowingdeadlines:

Two months as of the registration date of the relevant application, if the plot islocatedonthesideofaroadoronanyofthesidesofanapprovedplanning.

Orwithinsixmonthsasoftheregistrationdateoftherelevantapplicationiftheplotis subject toa planning, isadjacent to aplanningproject,or if thebuildingpermit

applicationinvolvestheconsultationoftheHighCouncilofUrbanismorotherpublic

authoritiessuchastheGeneralDirectorateforArcheologyortheGeneralDirectorate

forCivilAviation.

Other publicauthorities, such as the Civil Defense,Electricite du Liban, should alsogivetheirapprovalormotivatedrefusalwithinfifteendaysasofthedatearelevant


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demand is transferred to them by the Urbanism Bureau, otherwise they would be

deemedashavingimpliedlygiventheirapproval.

Then,therelevantUrbanismBureaushould(i)giveitsfinalapprovalwithintheabovetimeframes,(ii)advisetheapplicant,and(iii)transferthefileaftercalculatingthefees

totheMunicipality,theMohafazaortheCamakamiahasthecasemaybe,tohave

the building permit issued by the Head of the Municipality, the Mohafez or the

Camakam,afterpaymentofthefees.


ThefeespaidtotheMunicipalityare:

1.5%ofthepurchasepriceforeachsquaremeterofland,ifsuchprice

doesnotexceedLL25,000,equivalentapproximatelytoUS$17.

2% of the purchase price for each square meter of land if such price

rangesbetweenLL25,000andLL100,000,orUS$17andUS$67.

1%of thepurchaseprice foreachsquaremeterof landexceeding LL

100,000,orUS$67

Apremiumequivalent to10%oftheabove fees isallocated topublic

projectssuchastheNationalMuseum(5%),publicparksandgardens,

andpublictoilets(5%).

- Apremiumequivalentto5%oftheabovebuildingpermitfeesispaidfortheuseofmunicipalpublicdomains.

- Moreover,a0.5% taxof thepurchaseprice foreach squaremeteroflandisleviedtoestablishsewersandsidewalks.

- Inaddition,thefollowingstampdutiesaredue:

2,000L.Lforeachsquaremeterforeachfloorprovided itdoesnotexceedLL250,000(approximatelyUS$165)foreachfloor.

1,000L.Lforeachsquaremeterforeachfloorsectionprovideditdoes not exceed LL 100,000 (approximately US $ 65) for each

floorsection.


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FeespaidtotheOrderofArchitectsandEngineers:

- 5%ofthebuildingpermitsfeespaidtotheMunicipality.

7. Contracts

- Can the investor freely enter into local contracts?

Yes,theinvestorcanfreelyenterintolocalcontracts.

- Can the contracts be governed by the law of another country?

Yes,thecontractscanbegovernedbythelawofanothercountry,butemploymentcontracts

shouldbemandatorilygovernedbytheLebaneselaw.

Moreover, the parties to an agency/exclusive distribution agreement cannot submit their

contracttoaforeignlawtogovernmattersspecificallyregulatedbytheDecreeLaw34/67of

August 5, 1967 governing commercial agencies in Lebanon which are considered of public

policysuchastheprovisionsgoverningtheterminationandnonrenewalcompensation.

8. Price Controls- Are there applicable price controls?

Generallynot,butpursuanttoarticle7ofDecreelawno73datedSeptember9,1983related

to thepurchaseand tradingofgoodsandproducts, forthesaleofgoodsandproducts for

whichthemaximumsalepriceorpercentageofthesaleprofitaredetermined,thesaleprice

maynotexceeddoublethecostprice.

Moreover, there are price controls mechanisms pursuant to antidumping laws, antifraud

regulations,andinrelationtosomefooditems.

9. Product Registration- Must the entity register its product?

No,butincertaincases,thedeclaration(andnotregistration)totheMinistryofEconomyand

Tradeofsomeproductsismandatory.

- If so, how is registration obtained?

- How long does the process take?

- Are there fees involved?


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10. Reduction or Return on Capital- Can capital be repatriated while the corporation is still ongoing?

Yes, subject to the capitalization requirements applicable to specific businesses such as

insurers,

banks

and

financial

services

companies.

11. Sale of Goods

- Are there restrictions on the manner, time or place of sale of goods?

Therearenorestrictionsassuch,butthemanner,timeorplaceofsaleofgoodsareregulated

bydifferentlawsandorganizedbyregulationsissuedbytheMinistryofEconomyandTrade.

12. Trade Associations

- Are there trade associations the investor can or must join?

Therearenotradeassociationsthatthe investormustjoin,buthecanjointheChamberof

CommerceandIndustry.

- If so, are there fees involved?

Thefeesareapproximately700,000LBP.

- Are there mandatory trade practices?

Therearenomandatorytradepractices.

X. CESSATION OR TERMINATION OF BUSINESS

1. Termination

- What are the tax consequences of terminating the business?

Alltaxesduebythebusinessmustbepaidupontermination.

- What costs are involved in termination?

Costs

involved

in

termination

depend

on

the

form

of

the

company

and

amount

of

the

capital

andthesizeofthebusiness.

- How long does it take to terminate the business?

Thedurationdependsonthecomplexityoftheprocedureregardingtheformandsizeofthe

company.


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- How is the investor's particular form of business treated in termination?

The procedure of termination is the same in principle, but in practice its length and

complexitydependontheinvestorsparticularformofbusiness.

- Can the business be terminated without government approval or intervention?

Yes,thebusinesscanbeterminatedwithoutgovernmentapprovalor interventionsavefor

somekindofactivitiessuchasinsurance,bankingandotherlegalentitieslistedintheCentral

Banklistssuchasfinancialinstitutions,brokeragefirmsetc

- What are the obligations toward creditors, employees and others upon termination?

Upontermination,creditorsmustbepaidbackandemployeesmustreceivealltheirduesand

compensation.Inthisrespect,employeesendofserviceindemnityispayabletothembythe

NationalSocialSecurityFundtowhomtheemployerpaidtherelevantcontributionsforeach

employeeduringhisemploymentperiod.

- What are the tax consequences of termination?

Thereare no specific tax consequences except thatall taxes that are due by the business

mustbepaidupontermination.

2. Insolvency/Bankruptcy

- What is the extent of the investor's liability in the event of insolvency or bankruptcy?

Theextentoftheinvestorsliabilityintheeventofinsolvencyorbankruptcydependsonthe

formofthecompany:ifitisapartnership,hewillberesponsibleonhispersonalassets;ifitis

ajointstockcompanyoralimitedliabilitycompany,hewouldnotberesponsiblebeyondhis

contributiontothecapital.

- What choices, if any, are available to the investor with regard to the restructuring ofthe business?

Therearenorestructuringoptionsprovidedforbylaw.


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XI. LABOR LEGISLATION, RELATION, AND SUPPLY

1. Employer/Employee Relations- What laws govern employer/employee relations?

The laws that govern the employer/employee relations are mainly the Labor Code of

September23,1946andtheSocialSecurityLawissuedbydecreeno.13955ofSeptember26,

1963,inadditiontotheWorkRelatedInjuryDecreeLawno.136datedSeptember16,1983.

- Are there obligations to train employees?

Theemployerhastheobligationtotrainemployeestotheprofession,artorcraftworkthey

werehiredfor.Attheendofthetraining,acertificateofabilityisdeliveredtotheemployee.

Suchobligationisnotstrictlyimplementedinpractice.

2. Employment Regulations- Must the investor hire nationals of the country?

Pursuant to the Ministerial Decision no. 94/1 issued by the Minister of Labor on May 24,

2008,certainemployeespositionsarereservedtoLebanesenationalsandthereforenowork

permitsaregrantedtoforeignemployeesforsuchpositions.

These positions relate to administrative and banking occupations and include managerial

positions,salesandmarketingrepresentatives,businessconsultants,computeroperatorsand

engineers,nursingandotherjobs,unlesstheforeignemployeesspecializationorexpertiseis

not

available

locally,

in

which

case

he

would

be

granted

a

work

permit

subject

to

certain

conditions(suchaspublishingajobofferinlocalnewspapers).

Inaddition,theserestrictionsdonotapplyto(i)foreigncitizenswhohaveaLebanesemother

oramotherofLebaneseoriginor(ii)whohavebeenmarriedtoaLebaneseformorethan

oneyearor(iii)whoareresidinginLebanonsincetheywerebornor(iv)whoaremanagersor

representativesofa foreigncompanyregistered inLebanonandprovidedthattheStateof

whichtheforeignerisacitizenallowsLebanesetocarryouttheworktheforeignerintendsto

performinLebanon.

Moreover,foreachforeignemployee,theemployermustemploythreeLebanesenationals.

Suchconditionisnotalwaysstrictlyapplied.

- Is there a minimum wage?

Yes.TheminimumwageisfixedbyDecreeatLL500,000(approximatelyUS$334).


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- Is there a maximum number of hours an employee can work each week?

UndertherelevantprovisionsoftheLebaneseLaborCode,themaximumworkinghoursfor

adults(menandwomen)is48hoursperweek.Thisdoesnotincludebreakperiods.

The

break

period

consists

of

an

hour

of

rest

for

male

employees

every

six

hours

of

work

and

forfemaleseveryfivehours.

Employeesshouldbenefitofaconsecutivebreakperiodofninehoursforevery24hoursof

work.Also,theymustbenefit,weekly,fromanuninterruptedbreakof36hours.

Moreover,employerscan, in certainexceptional circumstancesanddue tomajorbusiness

requirements, request from their employees to work for a maximum of 10 hours a day,

providedtheMinistryofLaborisinformedwithin24hours.

Overtimehourssalarymustexceedby50%theregularsalary.Iftheemployerhastowork

during the36uninterruptedweeklybreakmentionedabove,hehas the right to rest fora

similarperiod.AscheduleofworkinghoursshouldbenotifiedtotheMinistryofLaborand

displayedattheworkingplace.

Workinghourscanbeincreasedupto12hoursadaybydecisionoftheMinisterofEconomy

provided notice is given to Social Affairs Service within 24 hours (with 50% additional

paymentpereachadditionalhour).

- Is there a minimum number of vacation and sick days to be given?

Yes

there

is,

as

follows:

AnnualLeaves:

Everyemployee isentitledtoafullypaidannual leaveof15workingdaysprovidedhe/she

hasbeenemployedbythesameemployerforatleastoneyear.

Accordingtoconventionno.52oftheInternationallaborOrganizationonpaidannualleaves

andwhichhasbeenratifiedbytheLebaneseauthorities,theannualleavemustbeincreased

in proportion to the number of years of employment. The Ministry of Labor applies the

increasedleaveasfollows:

PeriodofEmployment Annualleave

From1to5years 15workingdays



Above15years 20workingdays


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SickLeaves:

Employeeswhohavebeenworkingforthesameentityforaperiodexceedingtheprobation

period(threemonths)areentitledtopaidsickleavesasfollows:

Employmentyears Fullsalary andHalfsalary

3monthsto2years month month

2yearsto4years 1month 1month



Above10years 2month 2month

Sickleaveisgrantedpursuanttoamedicalreport.Whenthesickleaveexceedsonemonth,

the

employer

is

entitled

to

reduce

the

employees

annual

leave

to

8

days

instead

of

15

days.

3. Hiring and Firing Requirements

- Must the investor employ a minimum number of people?

Thereisnoobligationontheemployertoemployaminimumnumberofpeople.

- Must the investor employ a minimum number of nationals?

Pleaserefertoourresponsetothefirstquestionofpart2above.

- Must certain positions in the company be held by nationals?

Pleaserefertoourresponsetothefirstquestionofpart2above.

- Are there rules to follow in hiring/dismissing personnel (e.g. notice)?

AccordingtotheLebaneseLaborCode,eachoftheemployersandemployeesareentitledto

terminatetheemploymentcontractentered intoforan indefiniteperiodoftime,provided

onegivestheotherpartywrittennoticeoftermination.The lengthofnotice isspecifiedby

law and cannot be reduced. It varies with the length of the duration of employment as

follows:

Priornotice Durationofemployment

1monthpriornotice Lessthan3yearsofemployment

2monthspriornotice 3to6yearsofemployment

3monthspriornotice 6to12yearsofemployment

4monthspriornotice Morethan12yearsofemployment


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Ifthecausesofterminationarenotstatedclearly inthenotice,theemployee isentitledto

asktheemployertoclarifythereasonsforthedismissal.Theemployersanswerwillenable

theemployeetodeterminewhethertofileanunfairdismissalclaimornot.

Theemployerisnotboundtohavetheemployeecarryonworkingduringthenoticeperiod.

Theonlylegalobligationontheemployeristopaytheapplicablewagesduringthattime(

payinlieuofnotice).

Moreover,theterminationnoticemustnotbeservedduringtheannualleave,thematernity

leave,thesickleaveandotherleavesprovidedforintheLaborCode,aswellastopregnant

employees. This restriction does not apply if the employee is hired by another employer

duringthesaidleaves.

Employmentcontractsentered into foradeterminedperiodof timecannotbe terminated

prior to their expiry date, except by mutual agreement between the employer and the

employee, and/or if such early termination is provided for in the contract and along the

provisionsofsuchcontract.

- Does the investor have an continuing obligation towards dismissed employees?

No,exceptforthesettlingalltheemployeesstatutoryadcontractualentitlements,in

additiontotheobligationofsettlingtotheNationalSocialSecurityFundthebalanceof

contributionsdueinfavortheterminatedemployeetotheEndofServiceIndemnityBranch

at

such

Fund.

4. Labor Availability

- Is adequate skilled or unskilled labor available for the anticipated business?

AdequateskilledlaborisavailablealmostforeverykindofbusinessinLebanon.

5. Labor Permits

- Are labor permits required?

Yes,laborpermitsarerequiredtoenableforeignerstoworkinLebanon.


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- If so, how are they obtained?

Permitsforforeignemployeesincludethefollowingformalities:

a Apreliminaryletterofapproval:A preliminary letter of approval is to be first delivered upon the employees and/or

employersrequestbytheMinisterofLabor.

The followingdocumentsmustbeenclosed tothepreliminary letterofapprovalsrequest:

Copyoftheforeignerspassportvalidforatleast18months,copyoftheemployersidentity

card, the incorporation documents of the employer if it is a legal entity, the employees

academiccertificateandCV,theregistrationcertificateoftheemployerifitisalegalentityat

theMinistryofLabor,adocumentsignedbytheemployerinwhichthislatterundertakesto

(i)declareandregistertheemployeeattheNationalSocialSecurityFundand(ii)toenterinto

an employment contract with the employee pursuant to which the salary and benefits

grantedtosaidemployeearespecificallydetermined.

b Priorauthorization:Aftergettingthepreliminaryletterofapproval,theforeignemployeemustobtainfromthe

MinistryofLaborapriorauthorization.Anapplicationformsignedbytheemployershouldbe

submittedtotheMinistryofLaborinthatpurposeenclosedwithabankguaranteefromthe

BanquedelHabitatamountingtoLL/1,500,000/orUS$1,000(theamountofsuchguarantee

is

refunded

when

the

work

permit

is

terminated

and

the

employee

leaves

the

country),

in

additiontootherdocumentssimilartothedocumentssubmittedforthepreliminaryletterof

approval.

TheMinistryofLaborstudiestheapplicationanddecideswhetherornottogranttheprior

authorization. If the area of specialization of the foreign employee can be covered by

Lebanesenationals,thepriorauthorizationwillnotbegranted.

c Laborvisa:Once thepriorauthorization isobtained, theemployermustapply to theSretGnrale

(NationalSecurityServices) fora laborvisa toenable theemployer toenter theLebanese

territory.SuchlaborvisaisstampedontheemployeespassportattheInternationalAirport

of Beirut. Specific documents, together with the prior authorization and a notarized

undertakingaddressedtotheSretGnralesigned inLebanonbytheemployer,mustbe

enclosedtothelaborvisaapplication.


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d Workpermit:OncetheemployeeenterstheLebanese territorypursuant to the laborvisa,theemployer

mustapply fortheemployeesworkpermit.Specificdocumentsshouldbeenclosed tothe

workpermitsapplicationsuchasanotarizedemploymentcontract,medicalinsurancepolicy,

medicaltests,etc.

e Residencypermit:Once the work permit is obtained, the residency permit is issued by the Sret Gnrale

subjecttothefilingbytheemployersoftherelevantapplicationanddocumentation.

Workandresidencypermitsaregrantedforaperiodofoneyearonlyandmustberenewed

yearly.

- How long does the process take?

Generally,theprocesstakesapproximatelythreemonths.


Governmentalfeesforobtainingworkandresidencypermitsforaforeignemployeecanbe

summarizedasfollows:

- US$1,000:Bankguarantee.- US$400:Priorauthorizationfee.

- US

$

150:

Labor

visa

fee.

- US$1,200:Workpermitfee.- US$1,200:Residencypermitfee.- US$150:Insurancepolicycosts.- US$350:Stampsandsundries.- Inadditionto3stampdutyand2notarizationcostsincludingthebarsfees

calculatedproratatothesalary.6. Safety Standards

- Are there safety codes which must be followed?

Yes, Decree no. 11802 dated January 30, 2004 regulates and organizes professional

prevention, safety and health. In addition, there are different and multiple safety and

preventionrulesrelatedtospecifictypesofactivities.


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7. Unions

- Are unions recognized?

Yes, syndicates and their unions are recognized under Lebanese law. They are formed

pursuanttoalicensebytheMinistryofLabor.

- What are the unions in the investor's business?

Syndicatesandunionsaimatprotecting,encouragingandimprovingtheprofession,aswell

asdefendingtheinterestsofthemembers.

- What are these unions' political affiliations, if any?

Unionsandsyndicatesareprohibitedfromhavingpoliticalaffiliations.

- Is there an obligation on the part of the employer to organize unions?

No.

- Are there mandatory collective bargaining agreements for the business involved?

TherearecollectivebargainingagreementsinseveralsectorsinLebanon(suchasthebanking

sector).

Thereisnoobligationtohavesuchagreements,butonceacollectivebargainingagreementis

made, it can be extended to all the employees of the business by decision of Minister of

Laborpursuant toa favorableproposalof theHigher CommitteeFor CollectiveBargaining

Agreementsprovided for intheLaborCode. Inthatcase, itbecomesmandatory forallthe

employeesandemployersofthesamesector.

XII. TAX ON CORPORATIONS

1. Allowances

- What are the major allowances (e.g. capital cost depreciation)?

N/A.

- What are the major deductible items?

Thetaxappliestothenetincome;therefore,expensesandchargesaredeductiblefromthe

gross income,suchascostsofgoodsandmerchandise, leasesofshopsandoffices,salaries

andwagesofemployees,interestofloansenteredforbusinesspurposes,etc.


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- What are the major expenses that are excluded from deductibility?

N/A.

2. Calculation of Taxes

- How is the taxable base determined?

Tax is leviedon thenet incomegeneratedduring thepreviousyear.Thenet income is the

wholeturnoverofthetaxpayerafterdeductingallchargesandexpensesdeterminedbythe

law.

Therearethreetaxassessmentmethods:

Theactualprofitmethod(mainlyforjointstockcompanies,limitedliabilitycompaniesandpartnershipslimitedbyshares).

Thelumpsumprofitmethod,and

Theestimatedprofitmethod.

3. Capital Gains

- What are the federal or national tax rates on capital gains?

The(national)taxoncapitalgains(namedtaxovermoveableassetsreturns)is:10%

- What are the regional or state taxes on capital gains?

N/A.

- What are the municipal or local taxes on capital gains?

N/A.

4. Filing and Payment Requirements

- When must the corporation file its tax return, if any?

Forjointstockcompanies,limitedliabilitycompaniesandpartnershipslimitedbyshares(for

active partners) the tax return should be filed before the 1st of June of each year. For

sleepingpartnerships,thetaxreturnisfiledbeforethe1stofApril.


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- When must the corporation pay its taxes?

Thecorporationmustpayitstaxeswhenfilingthetaxreturn.

- Are taxes paid in installments or annually?

Theincometaxispaidannually.

5. Miscellaneous Taxes Due

- Is there a tax on capital?

BesidesthetaxoncapitalgainsmentionedunderSectionXII(3)above,thereisnospecifictax

onthecapitalofacorporation.There isa3stampdutyonthecapitalthatappliesupon

incorporation

of

a

company

and

its

capital

increases.

ForHoldingcompanies,thereisataxoncapitalpleaserefertoSectionXII(10).

- Is there a business license tax?

No.

- Is there an apprenticeship tax?

No.

- Is there a training tax?

No.

- Are there other taxes?

Companiesthataresubjecttotheactualprofitmethodmustreassesstheirfixedassetsevery

fiveyears.Incaseofbetterment,a10%taxapplies.

Also, a 15% betterment tax applies in case of a gain generated from the assignment of a

companysfixedassets.

Thereisalsothestampduty:

On contracts (on each original copy), deeds, undertakings to pay, and other specific

documents:3


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Oncommercialbills:1.5

- What are the filing and payment requirements?

The

filing

is

submitted

by

any

representative

of

the

company

in

question.

The

calculation

of

thetaxiscarriedoutbyacertifiedaccountant.

6. Registration Duties

- Are there registration duties due upon the incorporation of a company?

Yes,thereareregistrationdutiesdueuponthe incorporationofacompany.Pleasereferto

SectionVII.

- Are there registration duties due upon an increase in capital?

Yes.PleaserefertoSectionVII.

- Are there registration duties due upon the transfer of the company's shares?

Yes, thereare registrationdutiesdue upon the transferof the sharesofa limited liability

companybecausethetransferofsharesmustbedonepursuanttoanotarizedsharestransfer

agreementthatisregisteredattheCommercialRegister,whichisnotthecaseforthetransfer

ofsharesofajointstockcompany.

- Are there registration duties due upon a transfer of corporate assets?

Yes,thereareregistrationdutiesdueif

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