Different Lebanese business entities
Healy Consultants will assist our Clients with setting up the optimal type of Lebanon company for their business activities. There are several ways of starting a business in Lebanon, the most common being the setup of a Lebanon limited liability company. Alternatively, foreign companies can also setup their business in Lebanon through the establishment of a public limited company, an offshore company, a holding company, a branch office or a representative office.
The Lebanese limited liability company (SARL)
- The Lebanese LLC is commonly used to setup a small business in Lebanon. Minimum paid-up share capital of US$3,400 and 3 shareholders will be required to complete business setup in Lebanon. An LLC must also appoint at least 1 director, who can be a foreigner. Please note that corporate directorship is only permitted if the corporate is also a shareholder;
- A Lebanese limited liability company is not required to go through an annual audit if i) its share capital is less than US$20,000 and ii) its annual turnover is less than US$500,000. Like a Lebanese PLC, it must however appoint a company attorney and pay him at least the minimum yearly retainer fee fixed by the Beirut Bar Association.
The Lebanese publicly limited company (SAL)
- The Lebanese public limited company requires a minimum capital of US$20,000 for setup and at least 3 shareholders, whom can be of any nationality. Its Board of Directors must be comprised of at least 3 members and a majority of these members are required to i) be of Lebanese citizenship and ii) hold at least 1, symbolic, “guarantee” share;
- A Lebanese public limited company is required to go through an annual audit and needs to designate a registered Lebanese auditor for that purpose, while another independent auditor will be designated by the Court of Commerce. A Lebanese PLC must also appoint an attorney, to be paid at least the minimum yearly retainer fee fixed by the Beirut Bar Association;
- It is possible -but not mandatory –to list the PLC to list on the Beirut Stock Exchange. To give your company a marketing edge, Healy Consultants recommends our Clients willing to proceed with Lebanon business setup to establish a Lebanese PLC instead of an LLC.
The Lebanese offshore company (Entreprise offshore)
- This business entity is only allowed to conduct operations and sign contracts with entities based i) abroad or ii) in Lebanese Free Trade Zones. Like a PLC, a Lebanese Offshore company requires a minimum capital of US$20,000 for setup and at least 3 shareholders, whom can be of any nationality. Its Board of Directors must also be composed of at least 3 members, whom can also all be foreign nationals;
- A Lebanese offshore company must appoint at least one auditor but, unlike other Lebanese entities, does not need to appoint a lawyer provided its share capital is less than US$34,000. It is furthermore entitled to several tax advantages including i) a flat corporate tax of US$700 ii) payroll tax exemption and iii) reduced visa requirements for its employees.
The Lebanese holding company (Holding SAL)
- The Lebanese holding company is only allowed to hold and transfer shares of other Lebanese and foreign companies. It cannot conduct commercial and productive operations. Like the Lebanese PLC, this business entity requires a minimum share capital of US$20,000 for setup and at least 3 shareholders, whom can be of any nationality. It will also be subject to standard audit and company attorney requirements;
The Branch Office (Succursale)
- Lebanese Corporate law stipulates that a branch office can be 100% foreign owned. The scope of operations for this entity will be defined by the parent company. Also, the branch office will have an independent management team and corporate bank account based in Lebanon;
- Healy Consultants recommends our Clients to upgrade their Lebanese Branch to a PLC or an offshore company, as branches need to obtain a work permit for their resident foreign manager and are subject to i) corporate tax and ii) a specific branch tax, resulting altogether in a 25% tax rate on earnings.
The Representative office (bureau de liaison)
While the Lebanese representative office can be 100% foreign owned, it is not allowed to pursue production-related or commercial activities. Consequently, this entity can only engage in i) market research and ii) promoting the business of the parent company. Please note that the representative office is required to get its account audited.
Table of comparison between Lebanon entities
|LLC||JSC||Offshore company||Branch||Rep office|
|Also known as:||SARL||SAL||Entreprise Offshore||Succursale||Bureau de liaison|
|How long to set the company up?||2 weeks||5 weeks||4 weeks||4 weeks||3 weeks|
|How long to open company bank account?||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks|
|Wholly foreign owned?||Yes||Yes||Yes||Yes||Yes|
|Minimum share capital?||US$3,400||US$20,000||US$20,000||US$0||US$0|
|File annual tax return?||Yes||Yes||Yes||Yes||No|
|Corporate bank account?||Byblos Bank||Banque Franco-Libanaise||Arab Bank||Bank of Beirut||HSBC|
|Does our Client need to travel?||No||No||No||No||No|
|Resident director required?||No||Yes||No||Yes||Yes|
|Lebanese shareholder required?||No||Yes||No||No||No|
|Minimum directors allowed?||1||3||3||1||1|
|Lebanese resident company secretary required?||No||No||No||No||Yes|
|Corporate shareholders allowed?||Yes||Yes||Yes||Yes||Yes|
|Corporate director(s) allowed?||Yes||Yes||Yes||Yes||Yes|
|Lebanon corporate tax rate?||15%||15%||US$700||25%||0%|
|Lebanese lawyer required?||Yes||Yes||Yes||No||No|
|Annual financial statements required?||Yes||Yes||Yes||Yes||Yes|
|Statutory audit required?||No||Yes||Yes||Yes||Yes|
|Allowed to issue sales invoices in Lebanon?||Yes||Yes||No||Yes||No|
|Allowed to sign contracts with Lebanese entities?||Yes||Yes||No||Yes||No|
|Allowed to import and export goods?||Yes||Yes||Yes||Yes||No|
|Can rent an office in Lebanon?||Yes||Yes||Yes||Yes||Yes|
|Can buy Lebanon property?||Yes||Yes||Yes||Yes||No|
|Can own equity in other Lebanese companies?||Yes||Yes||Yes||Yes||No|
|Total Lebanon business setup costs in Yr. 1||US$17,860||US$19,860||US$11,830||US$20,360||US$21,360|
|Subsequent annual costs (excl. accounting and tax fee)||US$8,800||US$11,750||US$4,500||US$12,000||US$12,000|
|Sample engagement fee invoice|
Frequently asked questions
In terms of share capital, what are Lebanon company setup requirements?A Lebanon limited liability company can be setup with a minimum of US$3,400 of share capital. For a public limited company, such requirement amounts to US$20,000. Kindly note that companies with over US$34,000 are required to appoint a statutory lawyer during the Lebanon business setup.