QUESTIONS & ANSWERS
Should a director of a joint stock company be a shareholder of the company?
Yes. A director should hold at least one guarantee share to be a member of a board of directors.
Is it a requirement to have a local company in Lebanon to register under com.lb?
Yes, to apply for a .COM.LB domain the requester should provide his Lebanese Commercial Registration documents (i.e. the company requesting the domain should have an officially recognized operation in Lebanon).
Am I allowed to represent two different companies in Lebanon that work in the same sector?
If the companies exercise the same economic activity or sell competitive products, you need to notify them and they need to accept. Should you hide to one of them your other representation, the contract is vitiated for fraud.
What is the minimum number of directors in a holding company's board of directors?
The board of directors of a holding company should be composed of a minimum of three members and a maximum of twelve.
What constitutes a violation of a trademark?
Unauthorized use of a registered trademark, an imitation of a trademark applied on goods of the same class, sale, storing for the purpose of sale, exhibiting for sale of goods bearing a counterfeit mark, or using a mark duly by another party in order to serve the purpose of unauthorized promotion of goods of the same class are all offenses punishable under the law.
Can I include an arbitration clause in the commercial representation agreement?
No, you cannot.
What are the funding alternatives in Lebanon?
Financial institutions in Lebanon offer a range of financial incentives and facilities to help companies set up and expand their businesses through various government agencies, publicly run institutions or private institutions. In particular, startup companies can receive funds through Circular 331, subject to terms and conditions.
What kind of taxes should I pay for my startup?
For individual enterprises tax rates apply as follows:
• Net income up to LBP 9M: 4% of profits
• Net income between LBP 9 M and LBP 24 M: 7% of profits
• Net income between LBP 24 M and LBP 54 M: 12% of profits
• Net income between LBP 54 M and LBP 104 M: 16% of profits
• Net income exceeding LBP 104M: 21% of profits
For companies tax rates apply as follows:
• 15% on profits
• 10% on distribution of dividends
Note that disposal of shares in SARL are subject to capital gains tax at 10% while sale of shares in SAL companies are exempted
Taxes on salaries and wages are divided as follows:
• Net income up to LBP 6M: 2% of net income
• Net income between LBP 6M and LBP 15M: 4% of net income
• Net income between LBP 15M and LBP 30M: 7% of net income
• Net income between LBP 30M and LBP 60M: 11% of net income
• Net income between LBP 60 and LBP 120M: 15% of net income
• Net income exceeding LBP120M: 20% of net income
Furthermore, you should pay the VAT at the rate of 10% on all goods and services inside Lebanon as long as your turnover over 4 consecutive quarters exceeds LBP 150M.
As a founder, how much should I pay myself?
As a founder, you should pay yourself as little as you can to get by. Investors who have given you capital to work on your idea also don’t want to see you handle their money irresponsibly by taking an unreasonable share.
When should I use the protection of the Patent Cooperation treaty (PCT)?
You can use the protection of the PCT to save effort, time and work in case you are seeking protection for an invention in a number of countries. The PCT also helps you make decisions about the prosecution of the application before the various national Patent Offices in the national phase of processing.
Why was my domain name application rejected?
Reasons why domain name applications may be rejected, include but are not limited to:
• Incomplete, inaccurate, or incorrect entries in the Application Form
• Not submitting the required legal documents
• The domain name is not correctly hosted in the name servers
• The applicant and/or the application are in a status contradictory with the country's regulations
• Domain names are identical with an already registered domain name
• The domain name does not comply with public ethics
• The domain name is registered with the intent of reselling it
• Primary and/or secondary DNS server(s) do not respond properly
Do I need a lawyer to be able to register as a merchant in Lebanon?
No, you do not.
What is a partnership limited by shares?
A partnership limited by shares is a company whose capital is divided into shares owned by known shareholders who are responsible according to the shares they hold, and shares owned by accredited shareholders who manage the company and are personally responsible in solidarity of the company's debt.
Can a foreigner file a patent application in Lebanon?
Yes, if the applicant is not a Lebanese or not a resident in Lebanon, she has to appoint an agent or proxy residing in Lebanon by virtue of a power of attorney duly notarized and legalized.
What can be the minimum value of the trademark assignment?
One dollar is enough to assign a trademark.
Can a joint-stock company be managed by foreigners?
Yes, it can. However, the majority of the board of a joint-stock company should be formed by Lebanese.