Economic Profile of Lebanon:
- Official name – Republic of Lebanon
- Head of State – President Emile Lahoud
- Legal system – Mixture of Ottoman law, Canon law, Napoleonic code, and civil laws
- Language – Arabic (official), English, French, and Armenian
- Currency – Lebanese pound (LL)
- Gross Domestic Product (1999) — $16.2 billion
- Real GDP growth (1999) – 1.8%
- Consumer Price Inflation (1999) – 1.9 %
- Total debt (1999) — $4.18 billion
- Principal Growth Sectors – Banking, construction, tourism
- Total exports (1999) – LL 980.4 billion
- Total imports (1999) – LL 8659.8 billion
- U.S. exports to Lebanon (1999) – LL 830,644 billion
- U.S. imports from Lebanon (1998) – LL 68,830 billion
(Figures provided by 2000 U.S.-Arab Commercial Directory and Economic Guide)
Key Economic Indicators
(1999-2000 in USD, Billions)
- GNP (US$ billions) 15.0
- Inflation Rate 1.9%
- Dollarization 65%
- Exchange Rate 1,507.00
- (LL/US$)
- Deficit/ 42%
- Expenditures
- Total Debt (%GNP) 127.6%
- Debt in LBP 74.4%
- Debt in FX 52.3%
(Figures provided by the Lebanon Ministry of Finance 1999-2000.)
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Major Sectors of the Economy
Lebanon’s liberal economy is based on competition and private ownership. Services and banking sectors predominate, representing 70% of the country’s gross national product. Agriculture constitutes 10% and the industrial sector constitutes the remaining 20%.
* Finance and Banking
In January 1996, the Beirut Stock Exchange (BSE) resumed trading. By the end of 1998, thirteen companies were listed with a total market capitalization of $2.4 billion. Favorable economic and financial conditions since the end of the civil war in 1991 have led to an improved monetary and banking situation as well as a stable currency. Although financial institutions still comprise the core of Lebanon’s stock exchange, the BSE has diversified.
* Industry and Manufacturing
The industry and manufacturing sector has performed well in recent years. According to the General Directorate for Industry, 459 new industrial enterprises were established in 1996, employing nearly 3,414 people and requiring the approximate investment of LL101 billion ($65 million). The industrial sector reported a 3.7% increase for new factories in 1998 compared with the same period in 1996.
(Information provided by the 2000 US-Arab Commercial Directory and Economic Guide.)
* Tourism
Lebanon offers travelers a diverse scope of activities, ranging from mountain skiing to swimming in the Mediterranean. The hotel industry in Lebanon has begun a restoration project valued at $500 million. In 1997 the Ministry of Economy, Trade and the Ministry of Tourism, airlines, and local merchants launched Lebanon’s first annual “shopping month,” which was designed to attract regional tourists for duty-free shopping and entertainment.
* Agriculture
In recent years, the agricultural export sub-sector has performed well and has accounted for approximately 20% of total exports. Lebanon has been an exporter of fruit and vegetables to other Arab states such as Syria, Saudi Arabia, Jordan, Kuwait, and Iraq. Other important crops include olives, cane and beet sugar, potatoes, wheat, tobacco, and barley.
Bank Information
The Bank of Lebanon is the central bank. Its general assignment is to safeguard and stabilize the national currency for maintaining continuous economic and social development. Its other functions are to safeguard the sane character of the banking system and to develop a monetary and finance market.
## Listed Banks
The listed banks are on the list of the Bank of Lebanon and include:
* the commercial banks (whose principal activity is to grant credit and to receive deposits) and
* the banks of long and medium term credits (which cannot grant credits or
receive deposits for less than two years).
Lebanon has 82 listed banks, comprising 67 commercial banks, 12 foreign banks, and 13 banks of long and medium term credits.
# The expansion of the banks in Lebanon is the fruit of a long evolution stimulated by the conjunction of favorable external factors and non-common characteristics, including freedom of exchange and repatriation of capital, a law instituting absolute bank secrecy, possibility of opening a numbered account, possibility to open a joint account, and a banking free zone established in 1977.
(Information provided by “Doing Business in Lebanon” from the BDO Fiduciaire du Moyen-Orient in 1995.)
Selected Banking Indicators in 1998 by Percent of Total
Sources of Funds Uses of Funds
Capital Base 6.98 Reserves 12.56
Deposits 84.42 Claims on Private Sector 34.13
Liabilities to Banks 2.24 Claims on Public Sector 30.77
Other Sources 6.36 Foreign Assets 18.93
Total 100 Fixed Assets 2.84
Unclassified Assets 0.77
Total 100
(Figures provided by the Association of Banks in Lebanon 1998.)
Information on Import/Export Laws
## The Ministry of the National Economy could exempt new industries from customs duties relating to the import of machinery, spare parts, and construction materials used to build up a new factory in Lebanon. Exporters of finished products could also have refunded the customs duties already paid for the import of raw materials used in the production process.
Major importers of Lebanese goods include the United Kingdom, United Emirates, Saudi Arabia, and India.
## The existence of a free zone in Lebanon allows the importation of goods of all kinds and the ability to transform, package, and re-export them without paying any customs duties thereon.
(Information provided by the Banque Du Liban in September 1999. In order to view the monthly bulletin online, visit their website at www.bdl.gov.lb.)
## A foreign company wishing to do business in Lebanon may choose among two options: establishing a branch office of a foreign incorporated company or setting up a local company. This may be either wholly owned, or in partnership with Lebanese nationals.
Branch Office
The establishment of a branch office of a foreign incorporated company requires approval by the Ministry of Economy and Trade. The applicant must
Submit an application to the Ministry of Economy and Trade, which shall include the name of the company, its head office location and the amount of its capital, and
Support the application with the memorandum of association, a copy of the by-laws, a certified statement as to the capital of the company, a certified statement of the resolution of the company’s board of directors authorizing the establishment of the branch office in Lebanon and a power of attorney document drawn up in favor of the company’s representative with powers to establish, register, regulate and generally implement the necessary measures in order to begin operations in Lebanon, including the power to represent the company before all courts, either as defendant or plaintiff with the right in this respect to grant powers of attorney on behalf of the company to legal counsel in Lebanon, and the power to revoke the same.
2. Forming a Lebanese Company
In establishing a wholly owned subsidiary or a joint venture in Lebanon, foreign investors may choose among several forms of organizations available under Lebanese Law. The main types of companies in Lebanon are:
The Joint-Stock company, The Limited Liability Company, The Holding Company, The Offshore Company, The Limited Partnership, and The General Partnership.
*For more information regarding investment and establishing a company in Lebanon, please visit the website of the Investment and Development Authority in Lebanon at www.idal.com.lb.
Tax Information
The Lebanese tax system is known for its moderate rates and incentives to encourage investment. A new tax law, reducing the tax rates on income and business profits, was promulgated on December 30, 1993. Entities are submitted to a tax system based on their legal form.
Taxable Entities
Individual firms: The realized profit is treated as a personal income subjected to progressive tax rates, even if such profit is reinvested in the company.
Partnerships: Each partner is jointly and indefinitely liable for the partnership’s debts. Profits and losses are divided in proportion to each partner’s contribution. Profits are deemed to be distributed and are taxable progressively in the hands of each member in proportion to his interest in the partnership.
Corporations: Taxes are imposed on corporations’ profits before and upon distribution.
*Incidence of the Company’s Size on its Tax System and Territoriality of Income
Tax
Companies’ profits are assessed in different ways, depending on their size and the importance of their activities. The law provides for three assessment methods – real profit basis, lump sum profit basis, and estimated profit basis.
Different rules are used for computing the tax liability on each category of revenue. The categories are industrial and commercial profits; non-commercial profits; income from movable assets; and income from developed property.
Income realized in Lebanon, or income deriving from an activity performed in Lebanon, is subject to tax. Foreign companies are liable to Lebanese income tax if one of the following conditions is met:
they have permanent establishment;
they realize profits in Lebanon through a dependent representative; or
they realize a complete commercial cycle in Lebanon.
* Tax Exemptions
The Lebanese tax system has instituted tax exemptions on certain activities or income. There are two types of tax exemptions – permanent (granted for activities like educational establishments, farms and agricultural establishments, air and sea transport navigation, and holding and offshore companies) and temporary (for newly established industries, self-financed investments, and banks of long and medium term credits).
*Information provided by “Doing Business in Lebanon” from the BDO Fiduciaire de Moyen-Orient. For more information, visit http://www.terra.net.lb/LebanonToday/Taxation.asp.
A Sample List of the Top Companies in Lebanon
- Arope Insurance Lebanese American Business
- Assurex Association
- Ayoub Industries and Commerce Lebanese Arab Contracting and
- Bankers Assurance Engineering Company
- Banque Audi LBC International
- Banque de la Mediterranee Le Cercle Hitti
- Banque du Liban Lebano-German
- Banque Libano-Francaise Lebanon Invest
- Banque Saradar Lebanese Ceramic Industrial Company
- Bank of Beirut and the Libancell
- Arab Countries Liquigaz-Liban
- Beirut Stock Exchange Mabrouk
- Banque du Liban et D’Outre-Mer Malibu Development Company
- Boarding Pass Matelec
- Broumana Oasis Mawwasem Tanail
- Byblos Bank Middle East Capitol Group
- Casino du Liban Mechref
- Cedars Brokers and Consultants Mediaform
- Century Park Hotel – Kaslik Meker
- Chateau Musar Mephico
- Chekerland Middle East Airlines
- Chtaura Park Hotel Mina Industries
- Ciment de Sibline Mirelle Issa
- Cimenterie Nationale Mitsulift and Equipment
- Capital Investment Services Mouawad and Associates
- Companie Libanaise Pir le Protection Muzannar Joailliers
- du Credit Murr Television
- Commodore Hotel National Distribution Gaz Company
- Consolidated Contractors Company Nsouli Jewelry
- Cortas Oriental Paper Products
- Country Lodge Par Interim Voyages
- Credit Libanais Pheonicie Hotel
- Dar al-Handasah Prime Group
- Debbane Freres Printou
- Debbas Group Promobat-Diyarna
- Diapaper Puriplast Liban
- Doummar Freres Regency Palace Hotel
- Electronic Business Forms Riviera Hotel
- Eternit Rodolphe Saade and Co.
- Exotica Sannine Companie Des Sources Du
- Fabissa Liban
- Furniture and Plastics Industry Sealine
- Faqra Club Serum Products – Solu Pharm
- Farrago SGLEB Banking
- Fransabank SIDEM
- France Telecom Mobiles Liban Sleep Comfort Liban
- Future Television Societie Des Ciments Libanais
- Gemayel Freres Sodetel
- General Packaging Industries Solidere
- Huiles and Derives Strikers
- Industrial Development Authority of Summerland Hotel
- Lebanon Technical International
- Idarat Investment Corporation Tele-Liban
- Industrie Libanaise de Tricottage Timezero
- Insulco Contracting and Trading Trade Information Centre
- International Fairs and Promotions UAP/SLF
- Kefraya Uniceramic
- Ksara United Investment Group
- L’Artisan du Liban Vet-Rass
- L’Orient – Le Jour Wardy
- Liban Cables Widriss Group
This list is not inclusive of all major companies in Lebanon. In the interest of conserving space, several of the top companies in Lebanon were omitted.
A Sample of United States Firms with Franchises in Lebanon
- City Bank
- Sbarro
- Merrill Lynch
- Bank of New York
- Hardee’s Pizza Hut, Inc.
- American Express Bank
- Kentucky Fried Chicken
- Subway
- Chase Manhattan & Chemical Bank
- T.G.I. Friday’s
- McDonald’s
- Starbuck’s
- Burger King
This list is not inclusive of all the US firms with franchises or companies in Lebanon. In the interest of conserving space, some were omitted.
References for Information on Trade, Business, Economy, or Investment in Lebanon
The Ministry of Economy and Trade
www.economy.gov.lb
E-mail: [email protected]
Telephone: (961-1) 340-503/4/5
Fax: (961-1) 354-640
Trade Information Center
www.economy.gov.lb
Artois Street, Hamra. Beirut-Lebanon
Telephone: (961-1) 345-250/5
Fax: (961-1) 349-549
The Investment and Development Authority in Lebanon
www.idal.com.lb
E-mail: [email protected]
Telephone: (961-1) 344-676, 344-403
Fax: (961-1) 344-463, 347-397
The Ministry of Finance
www.finance.gov.lb
E-mail: [email protected]
Telephone: (961-1) 642-720/1, 981-000 to 981-011
Fax: (961-1) 642-762, 642-727
The Central Bank (Banque Du Liban)
www.bdl.gov.lb for the monthly bulletin of the Banque Du Liban
The Federation of the Chambers of Commerce, Industry and Agriculture in Lebanon
E-mail: [email protected]
Telephone: 01/347904-349614
Fax: 01/349614
Justinian Street – Building CCIAB – 13th floor – Sanayeh-Hamra
P.O. Box 111801
The National US-Arab Chamber of Commerce
President Richard P. Holmes
www.nusacc.org
E-mail: [email protected]
Telephone: (202) 287 5920
Fax: (202) 289 5938
1100 New York Avenue, NW
East Tower, suite 550
Washington, D.C. 20005
The Lebanese International Business Network
This website provides an automated matchmaking database and information for local, expatriate, and international firms and individuals interested in doing business in Lebanon. It includes opportunities for joint ventures, specific sales transactions, and other relationships.
www.linbusiness.com
email: [email protected]
Upcoming Business Events in Lebanon
Expert group meeting on links between balance of payments and 1993 System of National Accounts
When: June 27-29
Venue: ESCWA
Contact: Najib Freiji (01) 981 301
Topics: Accounting rules for transactions with the rest of the world, multiple exchange rate systems, and practical problems in preparation of the BOP accounts
Arab Banking Networks: Toward an Arab Internet
When: September 12-14
Venue: Summerland
Contact: Union of Arab Banks
Adnan Al Aridi (01) 785 711
Topics: Introduction to the Arab Banking Network Project
Medical Conference and Exhibition
When: September 21-23
Venue: UNESCO
Contact: International Business Events (01) 780 200
Topics: Organized in collaboration with the Union of Private Hospitals
Arab Inventions and Franchise Exhibitions and Intellectual Property Rights
When: October
Venue: Beirut Hall
Contact: International Business Events (01) 780 200
Topics: Six-day event covering all aspects of intellectual rights
(Information provided by Lebanon Opportunities, May 2000 edition.)
Upcoming Exhibitions in Lebanon
Asia and the Arab World
When: June 29-July 7
Venue: Expo Beirut
Sports, Fun and Leisure
When: June 30-July 9
Venue: Beirut Hall
Lifestyle Middle East
When: July 4-8
Venue: Forum de Beyrouth
Joallerie Liban
When: July 4-8
Venue: Forum de Beyrouth
City Kids II
When: July 14-23
Venue: Forum de Beyrouth
Aley Exhibition and Festival
When: July 21-August 6
Venue: Aley
Summer Sensation II
When: July 28-August 8
Venue: Expo Beirut
(Information provided by Lebanon Opportunities, May 2000 edition.)