A PROMISING STEP FOR INVESTMENTS IN LEBANON

October 21, 2018

Written by Aurore Deeb

Senior Associate

A PROMISING STEP FOR INVESTMENTS IN LEBANON

Offshore companies generate extensive economic fields and develop new markets for the Lebanese business activity. Such companies contribute in preserving the capital within the Lebanese economic sphere, as well as attracting foreign capital to Lebanon.

Moreover, the favorable tax rates from which benefits an offshore promote a healthy investment environment. Such healthy environment will definitely attract outside wealth which for a small country, could intensely increase the economic activity.

With the purpose of encouraging foreign businessmen and attracting them to establish offshore companies in Lebanon, the Lebanese parliament issued on October 10, 2018 the law number 85 (the “New Offshore Law”) amending the decree law number 46 of June 24, 1983 regulating the offshore companies in Lebanon (the “Offshore Law”).

The New Offshore Law, introduced Lebanon into a new stage with regards the establishment of offshore companies. As a matter of fact, under the provisions of the Offshore Law and Lebanese commercial laws, a minimum of three (3) shareholders were necessary for the establishment of an offshore.

However, such condition no more exists under the New Offshore Law. The establishment of a Lebanese offshore by one (1) shareholder (the “One Shareholder”), whether a legal entity or a natural person; Lebanese or foreigner, is now permitted under the New Offshore Law.

It is possible for the One Shareholder to manage the company by himself having all the responsibilities of the board of directors and the general assembly.

Further, in the event the One Shareholder is a foreigner, he will be exempted from issuing a work permit.

As well, subject to having a minimum of annual budget one billion Lebanese Pounds (1,000,000,000 L.L), the foreign (1) chairman, (2) authorized signatory, and (3) employees are exempted from issuing a work permit.

Such amendments are considered a very encouraging step for the Lebanese economy and a promising opportunity to attract foreign investors, as well, a promising step for future amendment of the Lebanese commercial Law regarding the possibility to establish a single person company.