Lebanon

Investing

FDI in figures

Foreign Direct Investment	2004	2005	2006
FDI of inward flow (millions USD)	1,993.0	2,751.3	2,793.8
FDI inward stock (millions USD)	n.c.	n.c.	18,291.0
Performance Index*, world ranking	9	9	14
Potential Index**, world ranking	68	75	n.c.
Number of Greenfield investments	23	11	17
FDI inwards (in % of GFCF)	52.0	74.8	72.1
FDI stock (in % of GDP)	n.c.	n.c.	80.9

Source:UNCTAD, World Investment Report

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.

Investing procedures

Legal framework

Lebanese common law, characterized by the freedom to do business, is on principle very open to all traditional forms of investment. However, purchasing real estate is sometimes limited. In the same way, some investment projects are subject to conditions in some sectors or according to the origin of the investor.

The sectors concerned by these restrictions are the following:
- the media, which are inaccessible to foreign companies;
- commercial representation: the capital of an SAL must be made up of registered shares held predominantly by Lebanese persons, and 2/3 of the capital of an SARL must be held by Lebanese persons;
- the exploitation of a public service (in the case of an SAL, one third of the capital must be held by Lebanese persons);
- the real estate sector. A branch office cannot work in this sector (in the case of a subsidiary company, the capital must be held predominantly by Lebanese persons and an authorization from the Council of Ministers is necessary);
- the sectors of banking, insurance, capitalization, savings, capital investment, organized air transport : it is impossible to create an SARL in these sectors.

Moreover, in order to facilitate for investors all the administrative formalities concerning setting up a business, law n°360 of 16 August 2001 on the promotion of investment, created a government agency IDAL (Investment Development Authority in Lebanon) which grants many fiscal exemptions, or proposes exceptional regimes, as long as the investment is made in defined sectors of activity, in areas designated by name, and is above a certain amount invested.

Acquisition of holdings

Law in Lebanon does not impose local participation. For the Public Limited Companies, law requires that half of the administrators have Lebanese citizenship, with no definite part of the holding interest in capital held by these administrators.

Obligation to declare