Overview
An offshore company can perform almost any kind of activity, trade or service, provided that the business takes place outside the Lebanese territories and/or in the Lebanese free zone.
In addition, the Lebanese offshore company can still own the business premises where it performs its activities, have employees and benefit from the stable and reputable Lebanese banking system — and mostly benefit from the ultimate secrecy that Lebanese banking provides.
Offshore companies are formed and registered in Lebanon; however, they operate only in the Lebanese free zone and/or outside the Lebanese territory. They can have their headquarters in Lebanon and hold bank accounts with Lebanese banks.
Ownership and management
Offshore companies are one variant of Joint Stock Companies. All shareholders and the board of directors can be foreigners, and the offshore company can be fully owned and managed by foreigners. Law 85/2018 allowed the incorporation of an offshore company by a single shareholder.
The capital requirement is the same as for joint stock companies, but it can be denominated in foreign currency.
The chairman of a Lebanese offshore company 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.
Foreigners or Lebanese will take maximum benefit from incorporating an offshore company in Lebanon, as their liability in the business is limited to their shares in the company, which itself has a very large scope of activities. Under certain conditions, it can be exempted from work permits in what relates to its foreign employees.
Taxation
The offshore company is subject to a very favourable taxation regime, paying a forfeit amount of tax of around USD 600 yearly, regardless of its profits or its turnover.
The annual tax on Lebanese offshore companies is limited to an approximate USD 600, as mentioned above.
The offshore company also benefits from exemptions from:
- Stamp duties on contracts
- Inheritance tax
- Corporate income tax
- Tax on dividends distribution
- Capital gain
- Interest paid
- Amounts paid in return for services
According to Article 7 of Law 19/2008, salaries and benefits paid to employees of offshore companies working abroad are exempted from payroll tax. The companies concerned are required to declare the salaries of all their employees, including those working abroad.
Permitted activities
The object of the offshore company is set to the activities below.
- Negotiation and conclusion of agreements concerning goods and products located outside the Lebanese territory or in the Lebanese Free Zone.
- Offering studies and consultations for the benefit of foreign institutions.
- Using free zone facilities in order to stock imported goods for re-exportation.
- Buying or renting real estate in Lebanon to the extent necessary for the operation of the offshore company.
- The administration of companies and institutions outside Lebanon, including the export of services and software of any kind to these institutions.
- Operations of three-sided or multi-sided trade, and therefore negotiating and drafting contracts, shipping goods and reissuing bills for transactions outside Lebanon or in the Lebanese free zone, including the facility to store the goods in the free zone in order to export them.
- Activities related to maritime shipping.
- Acquiring shares or stocks in foreign corporations, companies or institutions, and lending to these institutions in which the offshore company holds more than 20% of the capital.
- Acquiring or benefiting from rights related to agencies or commercial representation of foreign or non-resident companies or institutions.
- Opening branches and representative offices abroad.
- Construction, investment and administration in economic projects, except those prohibited by law.
- Opening accounts and using financial services to finance its activities, whether from local or non-resident institutions.
- The lease or acquisition of offices or real estate in Lebanon in relation to the activities of the offshore company.
Why an offshore company
An offshore company is a very interesting investment, specifically within the context of the flexible Lebanese legal system and the current regulations.
Offshore banking also benefits investors in terms of privacy, secrecy and return on capital.
Therefore, a Lebanese offshore company can be used in numerous beneficial ways, by setting up the appropriate structure depending on the client’s request and interests.
Contact us today to register your offshore company in Lebanon.