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Lebanon Update continued
free zones for the storage of the imported goods intended
for export
(d) Carrying out maritime transport activities
(e) Acquiring shares, interests, bonds and participations
in foreign non-resident institutions and companies, and
granting loans to non-resident foreign institutions of which
the offshore company holds more than 20% of the capital
(f) Acquiring or benefiting from the rights reverting to
agencies for products and goods, and representing foreign
companies in foreign markets
(g) Opening branches and representation offices abroad
(h) Building, operating, managing and acquiring all kinds
of economic projects
(i) Opening credits and taking out loans for financing the
abovementioned activities and transactions from banks and
financial institutions residing abroad or in Lebanon
(j) Renting offices in Lebanon and acquiring the real estate
properties necessary for the activities thereof, subject to the
provisions of the law governing the acquisition by foreigners
of real estate rights in Lebanon.
B) Exceptions to the legal regime applicable
to Lebanese joint-stock companies
As above mentioned, the offshore company shall be
incorporated under the form of joint-stock company and
shall abide by the legal provisions governing joint-stock
companies. However, Legislative Decree # 46/83 specified
some exceptions compared to other types of Lebanese
joint-stock companies and which are set forth below.
1. Capital and Accounting
(a) The offshore company’s capital may be set in a foreign
currency.
(b) Its accounts and balance sheets may be kept in the
same currency as of the capital.
(c) The offshore company is exempted from the obligation
of appointing a complementary auditor. Furthermore, by
virtue of Legislative Decree # 46/83, offshore companies
are authorised to appoint the principal auditor(s), that
remains mandatory, or renew its appointment, for a
3-year period.
2. Offshore management
(a) It is only in 2008 that the legislator exempted the
offshore company from the obligation of appointing two
Lebanese nationals within its board of directors.
(b) The chairman of the board and since the 2008 reform,
the company’s authorised signatory are exempted from
the requirement of obtaining a work permit if they are
non-resident foreigners.
3. Appointment of a lawyer
The company is not subject to the obligation of appointing
a lawyer, unless its capital exceeds 50 million Lebanese
pounds (equivalent to USD 33,333) or its total annual
balance sheets exceed the equivalent of USD 500,000.
C) Tax Regime and exemptions
1. The offshore income
The offshore company is exempted from the income tax
on revenues, and is subject to a lump sum tax of 1 million
Lebanese pounds (equivalent to USD 667). The company
is subject to this tax as of the first financial year, whatever
its duration.
2. The exemption of some amounts paid by the offshore
(a) The dividends distributed by offshore companies are
exempted from the tax on movable capital income.
(b) The interest paid by the offshore company to legal
entities or natural persons residing abroad are also subject
to tax exemption.
(c) Moreover, the offshore company is exempted from the
tax on the amounts paid to legal entities or natural persons
abroad, in return for services provided abroad.
3. The exemption of some movable capital incomes
Offshore companies are also exempted from the tax on
movable capitals levied on their income and revenues
arising from the investment of their assets abroad.
24 // PKF International Tax Alert All Regions
Issue 8 November 2011