Facts & updates April 2010
Facts & updates April 2010
1
Why choose a Lebanese offshore company ? ◦ The Lebanese offshore company has many advantages for a foreign investor thanks to tax incentives and a favorable business environment: The annual tax on Lebanese offshore companies is limited to LBP 1 million (equivalent to 667 US$). Large scope of authorized activities (outside Lebanon). Facilitated conditions for foreign managers and employees (no work permit and no taxes on salaries). Bank secrecy on all corporate & private bank accounts.
2
Specific Laws and regulations
◦ The Lebanese offshore company in governed by the decree law # 46 dated 24th June 1983. ◦ The decree law # 19 dated 5th September 2008 amended the offshore company’s regulation by: Enlarging its scope of activities Granting more tax exemptions Giving more facilities for foreign investors and workers
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Initial scope of activities (Company’s objectives): ◦ Negotiating and concluding contracts concerning goods and products to be performed outside Lebanon or in the Lebanese duty free zone. ◦ Performing studies and consultancy abroad. ◦ Using the facilities provided for by the duty free zone to store imported goods in order to be exported. ◦ Owning or renting real estate in Lebanon for the exclusive use of the company (head office).
4
New scope of activities (Decree law # 19): ◦ Carrying out maritime transport activities.
◦ Acquiring shares, interests, bonds & participations in foreign entities and granting loans if holding more than 20% of this foreign entity’s shares. ◦ Opening branches and representation offices abroad. ◦ Managing foreign companies and institutions. ◦ Selling all kind of professional, administrative, technical and IT services abroad. ◦ Representing foreign companies in foreign markets. 5
New scope of activities (continue):
◦ Acquiring/benefiting from rights reverting to agencies for products/goods. ◦ Building (contracting), operating, managing and acquiring all kind of economic projects abroad. ◦ Obtaining financial facilities from institutions located in or outside Lebanon.
However, Lebanese offshore companies are not allowed to undertake insurance or banking activities in Lebanon or abroad. 6
Legal framework and characteristics
◦ The Lebanese offshore company is a joint-stock company (Société Anonyme Libanaise – SAL). ◦ Minimum share capital of LBP 30 million (20,000 $) or the equivalent in foreign currencies. ◦ The books of the company can be held in foreign currency. ◦ The founders should not be less than 3 (minimum number of members for the Board of Directors). ◦ The company can be totally owned by foreigners.
7
Legal framework and characteristics (continue) ◦ With the amendments of the new decree law No 19: All Board members may be foreigners. The Chairman, if non-resident, is exempted from work permit. The Chairman and all Board members are exempted from the limitation on the number of Board membership in other companies (Article 154 of the Commercial Law). Foreign employees working in Lebanon are exempted from work permit, provided that the company’s annual balance sheet exceeds LBP 1 billion (around US$ 667,000) 8
Tax exemptions on:
Corporate income tax (15%) Dividends distribution (10%) Capital gain on any investment abroad (10%) Interest paid to companies or individuals abroad (10%) Amounts paid in return for services provided abroad (non-resident withholding tax 7.5%) ◦ Salaries and wages of employees working abroad (Lebanese and foreigners) ◦ Inheritance tax for Lebanese and foreigners ◦ Contracts & deeds are exempted for stamp duty (3‰)
◦ ◦ ◦ ◦ ◦
9
Administrative requirements:
◦ Maintain accounting records and books according to the Lebanese tax regulation. ◦ File annual income tax declarations before 31st May of the year following the year-end closing.
◦ Appoint an auditor and present audited financial statements together with the income tax declaration. ◦ Appoint a lawyer, except if the capital of the offshore company exceeds LBP 50 million (around 33,000 $) or if its total annual balance sheet exceeds the equivalent of US$ 500,000. 10
For more information, please contact us:
DAHER & PARTNERS Mazda Building (6th floor) – Jal El Dib Highway P.O. Box 16-6188 – Beirut – Lebanon Phone: +961 (0) 4.721.333 Fax: +961 (0) 4.721.444 E-mail: [email protected] Website: www.daherandpartners.com
Contact: Nadim A. Daher (Managing Director)
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1
Why choose a Lebanese offshore company ? ◦ The Lebanese offshore company has many advantages for a foreign investor thanks to tax incentives and a favorable business environment: The annual tax on Lebanese offshore companies is limited to LBP 1 million (equivalent to 667 US$). Large scope of authorized activities (outside Lebanon). Facilitated conditions for foreign managers and employees (no work permit and no taxes on salaries). Bank secrecy on all corporate & private bank accounts.
2
Specific Laws and regulations
◦ The Lebanese offshore company in governed by the decree law # 46 dated 24th June 1983. ◦ The decree law # 19 dated 5th September 2008 amended the offshore company’s regulation by: Enlarging its scope of activities Granting more tax exemptions Giving more facilities for foreign investors and workers
3
Initial scope of activities (Company’s objectives): ◦ Negotiating and concluding contracts concerning goods and products to be performed outside Lebanon or in the Lebanese duty free zone. ◦ Performing studies and consultancy abroad. ◦ Using the facilities provided for by the duty free zone to store imported goods in order to be exported. ◦ Owning or renting real estate in Lebanon for the exclusive use of the company (head office).
4
New scope of activities (Decree law # 19): ◦ Carrying out maritime transport activities.
◦ Acquiring shares, interests, bonds & participations in foreign entities and granting loans if holding more than 20% of this foreign entity’s shares. ◦ Opening branches and representation offices abroad. ◦ Managing foreign companies and institutions. ◦ Selling all kind of professional, administrative, technical and IT services abroad. ◦ Representing foreign companies in foreign markets. 5
New scope of activities (continue):
◦ Acquiring/benefiting from rights reverting to agencies for products/goods. ◦ Building (contracting), operating, managing and acquiring all kind of economic projects abroad. ◦ Obtaining financial facilities from institutions located in or outside Lebanon.
However, Lebanese offshore companies are not allowed to undertake insurance or banking activities in Lebanon or abroad. 6
Legal framework and characteristics
◦ The Lebanese offshore company is a joint-stock company (Société Anonyme Libanaise – SAL). ◦ Minimum share capital of LBP 30 million (20,000 $) or the equivalent in foreign currencies. ◦ The books of the company can be held in foreign currency. ◦ The founders should not be less than 3 (minimum number of members for the Board of Directors). ◦ The company can be totally owned by foreigners.
7
Legal framework and characteristics (continue) ◦ With the amendments of the new decree law No 19: All Board members may be foreigners. The Chairman, if non-resident, is exempted from work permit. The Chairman and all Board members are exempted from the limitation on the number of Board membership in other companies (Article 154 of the Commercial Law). Foreign employees working in Lebanon are exempted from work permit, provided that the company’s annual balance sheet exceeds LBP 1 billion (around US$ 667,000) 8
Tax exemptions on:
Corporate income tax (15%) Dividends distribution (10%) Capital gain on any investment abroad (10%) Interest paid to companies or individuals abroad (10%) Amounts paid in return for services provided abroad (non-resident withholding tax 7.5%) ◦ Salaries and wages of employees working abroad (Lebanese and foreigners) ◦ Inheritance tax for Lebanese and foreigners ◦ Contracts & deeds are exempted for stamp duty (3‰)
◦ ◦ ◦ ◦ ◦
9
Administrative requirements:
◦ Maintain accounting records and books according to the Lebanese tax regulation. ◦ File annual income tax declarations before 31st May of the year following the year-end closing.
◦ Appoint an auditor and present audited financial statements together with the income tax declaration. ◦ Appoint a lawyer, except if the capital of the offshore company exceeds LBP 50 million (around 33,000 $) or if its total annual balance sheet exceeds the equivalent of US$ 500,000. 10
For more information, please contact us:
DAHER & PARTNERS Mazda Building (6th floor) – Jal El Dib Highway P.O. Box 16-6188 – Beirut – Lebanon Phone: +961 (0) 4.721.333 Fax: +961 (0) 4.721.444 E-mail: [email protected] Website: www.daherandpartners.com
Contact: Nadim A. Daher (Managing Director)
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