How to Register a Business in Lebanon
Need help onboarding international talent?
Lebanon is a country in the Middle East, on the shore of the Mediterranean Sea. It is located on the crossroads between the European and Arabian world, which has contributed to its rich history and cultural diversity. The official language is Arabic; however, French is widely spoken. The capital city is Beirut and the currency used is the Lebanese pound (LBP). Lebanon's economy went through a significant expansion in recent years. Industry in Lebanon is mainly limited to small businesses that reassemble and package imported parts.
If you're looking to start your own business rather than working in a company, this is the article for you.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Every person engaged in business in Lebanon must file a registration form with the Commercial Register of the Ministry of Justice. The Commercial Register is divided into two categories:
- Public register for the registration of merchants (sole traders) and companies;
- Special register for the registration of the commercial establishments.
Foreign persons must obtain a residence permit and a work permit before starting a business.
What is a sole trader (merchant)?
A sole trader (merchant) is a business formed and owned by an individual. The law does not distinguish the business from its owner. The liability of a merchant is unlimited, which means that they are responsible for all the assets and debts of your business, and you're operating it with all your fortune. This business form is easy to establish, unlike other forms.
Being run by only one person, this business entity is flexible to the changing business environment. You can make decisions easier and take action instantly.
Merchant Registration in Lebanon
The registration is done with the Secretary of the Commercial Register in Beirut or to the secretaries of the commercial register in the provinces according to the place of the commercial business. Visit the office and submit the following documents:
- Two copies of the application form (you can ask for them at the office)
- Photocopy of your ID Card
- The lease act or property deed is required in case the object of the commerce contains the commercial representation (non-Lebanese merchants are prevented from taking the commercial representation as object of their business)
Next, head to the Ministry of Finance or to the financial departments of the provinces to pay the due fees. The fees are:
- License fee: LBP 750000;
- A fee of Judge Collaboration: LBP 375000;
- Fiscal stamp: LBP 2000;
- Judicial stamp: LBP 1000;
- Additional fees for the true copies.
After paying the fees, return to the registration office, where you need to fill a sample of the declaration for the administration of the central census and a sample of the computer questionnaire.
The whole registration process should be done in one day.
Merchants are obliged to keep a record of their assets and debts. The books have to be regularly presented to the Department of Sealing of the Register of Companies.
What are commercial establishments (fonds de commerce)?
This business entity is very similar to sole proprietorships or sole traders. Foreigners can establish fonds de commerce (commercial establishment) under the same conditions as Lebanese nationals. The law defines the commercial establishment as: the means of the commercial project, originally constituted of non-material elements, and subordinately, from material elements which, gathered and organized together, aim at practicing a commercial profession with no public aspect.
The registration is done with the Special Registry, and it is divided into contracts.
Taxes in Lebanon
The taxes are paid with the Ministry of Finance. Income gained from personal business, taxed at progressive rates of 4% - 21% for sole traders. The standard Value Added Tax (VAT) rate in Lebanon is 11%, and it is levied on all transactions undertaken. There are also several smaller taxes that have to be paid on a regular basis.
Looking to hire independent contractors in Lebanon? Here's how to do it compliantly.