Offshore Companies in Lebanon
The offshore company is a very tempting choice as a business entity/company to choose, With a tax of 1,000,000 Lbp (666 $ US) foreign investors are encouraged to finance this kind of company.
The fact that Lebanon is a tax haven, with low corporate taxes and full professional secrecy over bank accounts and all banking transactions within a free capitalist system is the reason that attracts numerous investors and businessmen to open an offshore company in Lebanon and open bank accounts in Lebanon.
Lebanon offers a wide variety of services in offshore banking and offshore bank accounts.
Many foreigners can benefit from a non-double taxation treaty which is signed between their country and Lebanon. (Nationals of the Foreign Country) by starting an offshore company in Lebanon
The offshore company is governed by decree law no 46 of the 24th of June 1943.
The Law no 19 dated 5/9/2008 amended the offshore companies’ regulations by easing its conditions and enlarging the scope of offshore companies’ activities.
Mainly the object of the offshore company in Lebanon was, before the amendment, limited to the following:
-Negotiating and concluding agreements concerning goods and products out of the territory of Lebanon or Lebanon Free Zone.
–Studying and consulting for foreign establishments
-Stocking goods via the free zone facilities
-Getting or renting real estate in Lebanon in what relates to the activity of the offshore company.
The Law no 19 dated 5/9/2008 amended the offshore companies regulations and thus, enlarged the scope of offshore companies activities to include in addition to the above:
-The administration of companies and institutions outside Lebanon including the export of services, software of any kind to these institutions
-Operations of three-sided traded or multi-sided trade and therefore negotiating and drafting contract, shipping goods and reissuing bills for transactions out of Lebanon or in the Lebanese free zone including the facility to store the goods in the free zone in order to export it.
-Doing activities related to maritime shipping.
-Acquiring shares of stocks in foreign corporations, companies or institutions and to borrow to these institutions in which the offshore company holds more than 20% of its capital
-Acquiring or benefiting from rights related to agencies or commercial representation to foreign or non-residing companies or institutions.
-Opening of branches and representative offices abroad.
-The construction, investments and administration in economic projects except those prohibited by law
-The creation of accounts and use of financial services to finance its activities whether from local institutions or non-resident.
-The lease or acquisition of offices or real estate in Lebanon in relation with the activities of the offshore company.
The amendment removed the condition of having two Lebanese nationals in the company’s Executive Board which eases the conditions for foreign investors and gives them more incentives to invest in offshore companies in Lebanon.
As for the chairman, he may be a non-Lebanese resident abroad and may operate without a permit. The company is registered both in the Commercial Register and in a special register for offshore companies.
An offshore company cannot engage in banking operations, insurance or any other commercial activity in Lebanon and cannot make any profits or revenues through movable or immovable assets in Lebanon, or through providing services to companies located in Lebanon, except for the interests on its bank accounts.
Some activities cannot be undertaken by offshore companies such as banking, insurance and in general any activity in Lebanon which may generate profits.
Off shores companies are formed in Lebanon; however they operate only in the Lebanese free zone and/or outside the Lebanese territory.
Besides this, an offshore company is a very interesting investment or a business due to its nature to the Lebanese laws regulating it and to the Lebanese flexible economical system.
1- Advantages of Creation / Incorporation of an offshore company in Lebanon
A- General Advantages
1- The Company can be fully owned and managed by foreigners; their liability is limited to their shares in the company.
2- Large scope of activities can be included in the company’s object.
3- Facilitated conditions for foreign managers and employees .
Foreigner chairperson / general manager does not require a work permit if he resides outside Lebanon.
Non-Lebanese employees are exempt from work permits providing the total balance sheet of the company exceeds USD 667,000.
4- Full Bank Secrecy on all corporate and personal / private accounts.
B- Taxes Advantages / Exemptions
Stamp duties on contracts, Inheritance tax, corporate income tax, Dividends distribution, Capital gain, Interest paid, Amounts paid in return for services…
The annual tax on Lebanese offshore companies is limited to LBP 1 million (equivalent to 667 USD)
C-Legal Characteristics:
- Joint stock company
- The founders could be one or three persons
*Board members may be foreigners.
*Chairman if non-residing is exempted from work permit.
*Foreign employees working in Lebanon are exempted from work permit provided the annual balance sheet is _ 1.5 million US$
- Minimum capital 30 million LBP (20,000 US$) or the equivalent in foreign currencies.
D- Controlled by Government:
- Maintain accounting records.
- File fiscal declaration.
- Present audited financial statements.
