Lebanon is neither a country of continental law nor that of Anglo-Saxon (general) law, and legal definitions are difficult to translate directly. For example, the term “company” is often used to refer both to a company and to a partnership, and the term “partner” may mean both a partnership’s partner and a shareholder. The Lebanese Commercial Code provides that, in particular, foreign investors may participate in the establishing of companies of such organizational and legal forms as:

• Société Anonyme Libanaise (S.A.L.) - public company limited by shares
• Société à Responsabilité Limitée (S.A.R.L.) - private company limited by shares‍

Société Anonyme Libanaise - S.A.L.

A public company limited by shares (Société Anonyme Libanaise - S.A.L.) is established by at least three persons of any nationality and characterized as follows:

• minimum charter capital of the company is LBP 30 million (approximately US$20’000);
• 100% of shares may be owned by foreigners, except for companies engaged in real estate business in Lebanon. In this case, at least 50% of shareholders must be Lebanese;
• shares may be freely transferred to third parties.
• company is managed by the Board of Directors composed of from three to 12 members and the Lebanese holding the majority. The Board may be headed by a foreigner only if he has received the work permit in Lebanon. Shareholders may be involved in the management of the company;
• company has to allocate 10% of its net profit to a specially established reserve fund until the allocated amount is 1/3 of the company's capital;
• company must engage an auditor to carry out an annual audit.

Lebanese Law 45/83 provides that Société Anonyme Libanaise may be established as a  holding company limited by shares, which is entitled to:

• own and manage movable property, copyrights, trademarks and other intellectual rights and property;
• manage other Lebanese companies where the holding company has at least 20% of the capital, and issue loans and credits to such subsidiaries;
• purchase property in Lebanon.

Holding company is managed by the Board of Directors composed of at least 2 members who must be Lebanese. The Board may be headed by a foreigner, and this does not require obtaining a work permit in Lebanon. Shareholders’ and directors’ meetings may be held outside Lebanon.

Holding company must be registered in the Commercial Register and in the Special Register of Lebanese Holding Companies.

Lebanese Offshore Company

Lebanese Law 46/83 provides that Société Anonyme Libanaise may be established as offshore company limited by shares entitled to carry out all its commercial activities exclusively outside Lebanon or in free economic zones, including storage of goods in free customs warehouses in Lebanon. Opening of bank accounts, signing of contracts, management and maintenance of offshore companies should also be carried out outside Lebanon.

Offshore company is managed by the Board of Directors composed of at least 2 members who must be Lebanese. The Board may be headed by a foreigner, and this does not require obtaining a work permit in Lebanon. Shareholders’ and directors’ meetings may be held outside Lebanon.

Offshore company must be registered in the Commercial Register and in the Special Register of Lebanese Offshore Companies.

Société à Responsabilité Limitée  - S.A.R.L.

Private company limited by shares (Société à Responsabilité Limitée  - S.A.R.L.) is established by at least three persons of any nationality and characterized as follows:

• minimum charter capital is LBP 5 million (approximately US$3’400). The capital must be fully paid up before registration, and its amount must be specified in all company documents;
• company’s reserve fund is 50% of the capital and is deposited in a Lebanese authorized bank;
• if company has more than 30 shareholders, it is required to be re-registered as public company limited by shares within 2 years or to be liquidated;
• shares may not be publicly offered and transferred to third parties without an approval by the shareholders’ majority (at least 75%);
• company is managed by a director who is not required to be a shareholder of the company;
• director may not approve a transaction which he himself, directly or indirectly, is interested in without a prior approval of the company shareholders;
• company must have an auditor to carry out an audit only if its charter capital exceeds LBP 30;
• company may not be engaged in banking, financial and insurance activities, as well as in air transportation in Lebanon.

All income generating companies in Lebanon managed and controlled in Lebanon pay income tax as well as withholding tax on dividends to be distributed.

Manufacturing companies established in Lebanese territories needing development and having certain investments in production, as well as companies manufacturing products not produced in Lebanon earlier, are exempt from taxes for 10 years. In order to obtain the exemption, a decision by the Lebanese Ministry of Finance is required.

Holding companies are exempt from income tax and tax on dividends but are subject to tax on capital.

Holding companies are also subject to some other taxes depending on their type of activities.

Offshore companies are exempt from profit tax in Lebanon but are subject to fixed annual duty and capital gains tax.

Lebanon has no currency control.

Lebanon is not a tax heaven and a concept of Lebanon tax exempt company (and/or Lebanon International Business Company, trust, foundation etc. registration) does not exist in Lebanon as such. A company formation in Lebanon could be arranged with a professional registered agent providing incorporation, virtual office and other corporate services in Lebanon. To set up a company in Lebanon is possible by correspondence, but to open a bank account in Lebanon will, most probably, require a personal visit.

Lebanon Double Taxation Agreements

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