U.S. Department of State 
Lebanon Country Commercial Guide 
Office of the Coordinator for Business Affairs 
 
 
 
                        Country Commercial Guide 
                                 Lebanon 
                            Fiscal Year 1996 
 
This Country Commercial Guide (CCG) presents a comprehensive look 
at Lebanon's commercial environment through economic, 
political and market analyses.   
 
The CCGs were established by recommendation of the Trade 
Promotion Coordinating Committee (TPCC), a multi-agency task 
force, to consolidate various reporting documents prepared for 
the U.S. business community.  Country Commercial Guides are 
prepared annualy at U.S. Embassies through the combined efforts 
of several U.S. governement agencies.   
 
CHAPTER I:  EXECUTIVE SUMMARY 
 
LEBANON CONTINUED STEADILY ALONG THE PATH TO RECOVERY 
THROUGH 1994 AND THE FIRST QUARTER OF 1995, AS 
INDICATED BY THE DYNAMISM OF ITS PRIVATE SECTOR AND 
ITS SUCCESS IN CONTROLLING INFLATION, AND STABILIZING 
THE LOCAL CURRENCY.  CONFIDENCE FOSTERED INVESTMENT 
AND COMMERCIAL ACTIVITIES AND GAVE LEBANON ACCESS TO 
INTERNATIONAL FINANCIAL MARKETS.  THE U.S. GOVERNMENT 
CONTINUED TO REASSURE LEBANON OF ITS SUPPORT FOR 
RECONSTRUCTION AND TO ENCOURAGE U.S. BUSINESS TO 
INVEST IN LEBANON'S RECOVERY. 
 
THE PROGRAM TO REBUILD LEBANON'S INFRASTRUCTURE 
PROVIDES SIGNIFICANT OPPORTUNITIES FOR MEDIUM- AND 
LONG-TERM INVOLVEMENT IN PROJECTS OVER THE NEXT 13 
YEARS WORTH MORE THAN USD 17 BILLION.  LEBANON HAS A 
TRADITIONALLY COMPETITIVE, OPEN-MARKET COMMERCIAL 
ORIENTATION AND THE MOST LIBERAL BANKING REGIME IN 
THE MIDDLE EAST.  BANK SECRECY IS STRICTLY ENFORCED. 
THERE ARE NO RESTRICTIONS ON FOREIGN EXCHANGE OR 
CAPITAL MOVEMENT.  THE LEBANESE POUND HAS SINCE PRIME 
MINISTER HARIRI TOOK OFFICE IN LATE 1992 GRADUALLY 
BUT STEADILY GAINED VALUE AGAINST THE U.S. DOLLAR. 
THERE ARE NO COUNTRY-SPECIFIC U.S. TRADE SANCTIONS 
AGAINST LEBANON, BUT THERE OBSTACLES TO TRADE AND 
INVESTMENT DO EXIST: 
 
(1) THE U.S. DEPARTMENT OF STATE WARNS ALL U.S. 
CITIZENS AGAINST TRAVEL TO LEBANON.  U.S. PASSPORTS 
ARE NOT VALID FOR TRAVEL IN, TO OR THROUGH LEBANON 
WITHOUT SPECIAL VALIDATION FOR SUCH TRAVEL BY THE 
DEPARTMENT OF STATE. (THIS RESTRICTION IS REVIEWED 
SEMI-ANNUALLY, IN FEBRUARY AND AUGUST.) 
 
(2) THE U.S. DEPARTMENT OF TRANSPORTATION PROHIBITS 
THE SALE IN THE UNITED STATES OF PASSENGER AIR 
TICKETS TO LEBANON.  THERE WERE AS OF JULY 1995 
INDICATIONS THIS RESTRICTION WOULD BE LIFTED FOR 
NON-U.S. CITIZENS.  DIRECT AIR AND SEA CARGO FROM THE 
UNITED STATES TO LEBANON IS RESTRICTED TO NON-U.S. 
VESSELS. 
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(3) AS OF MID-1995, OPIC INSURANCE WAS NOT YET 
AVAILABLE TO U.S. COMMERCIAL INTERESTS IN LEBANON. 
OPIC'S ABSENCE PUTS U.S. BUSINESSES AT A 
DISADVANTAGE.  FRENCH, GERMAN, AND U.K. FIRMS, AMONG 
OTHERS, CAN OBTAIN COVERAGE FOR LEBANON FROM THEIR 
RESPECTIVE FOREIGN GOVERNMENT EXPORT CREDIT AND 
INVESTMENT GUARANTEE AGENCIES. 
 
(4)  THE ABILITY OF THE COMMERCIAL SECTION OF THE 
U.S. EMBASSY IN BEIRUT TO ASSIST U.S. BUSINESSES IS 
RESTRICTED DUE TO SECURITY CONCERNS.  LIKEWISE, THE 
EMBASSY'S CONSULAR SECTION IS ONLY PARTIALLY OPEN AND 
DOES NOT PROVIDE A FULL RANGE OF SERVICES. 
 
ACCORDING TO LEBANESE CUSTOMS DATA, LEBANON'S IMPORTS 
WERE WORTH SOME USD 6 BILLION IN 1994.  (LEBANON 
CALCULATES IMPORT VALUES BASED ON A CUSTOMS DOLLAR 
EXCHANGE RATE OF 800 LEBANESE POUNDS.)  ITALY, 
LEBANON'S MOST IMPORTANT SUPPLIER, HAD 13.3 PERCENT 
OF THE MARKET, FOLLOWED BY GERMANY (10 PERCENT), THE 
UNITED STATES (NINE PERCENT), FRANCE, AND SYRIA. 
LEBANON IS TRADITIONALLY A KEY TRANSIT COUNTRY FOR 
GOODS MOVING BETWEEN EASTERN EUROPE AND NEARBY ARAB 
COUNTRIES. 
 
COUNTRY COMMERCIAL GUIDES ARE AVAILABLE FROM THE 
NATIONAL TRADE DATA BANK ON CD-ROM OR THROUGH THE 
INTERNET.  PLEASE CONTACT STATE-USA AT 1-800-STAT-USA 
FOR MORE INFORMATION.  TO LOCATE COUNTRY COMMERCIAL 
GUIDES VIA THE INTERNET, USE THE FOLLOWING WORLDWIDE 
WEB ADDRESS:  WWW.STAT-USA.GOV.  CCGS CAN 
ALSO BE 
ORDERED IN HARD COPY OR ON DISKETTE FROM THE NATIONAL 
TECHNICAL INFORMATION SERVICE (NTIS) AT 
1-800-553-NTIS. 
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CHAPTER II:  ECONOMIC TRENDS AND OUTLOOK 
 
MAJOR TRENDS AND OUTLOOK 
 
LEBANON'S ECONOMY HAS SINCE 1992 BECOME MORE 
FAVORABLE, WITH CURRENCY STABILITY, CONTAINED 
INFLATION AND BALANCE OF PAYMENTS SURPLUSES.  THIS IN 
TURN HAS FOSTERED INVESTORS' CONFIDENCE AS REFLECTED 
IN AN OVER-SUBSCRIPTION OF THE SHARES OF "SOLIDERE" 
(THE COMPANY FOR THE RECONSTRUCTION AND DEVELOPMENT 
OF THE BEIRUT COMMERCIAL CENTER) AND A USD 400 
MILLION EUROBOND ISSUE LAUNCHED IN AUGUST 1994.  THE 
GOVERNMENT PLANS TO CAPITALIZE ON THIS SUCCESS WITH 
THE EXPECTED REOPENING OF THE BEIRUT STOCK MARKET IN 
EARLY FALL 1995. 
 
PRINCIPAL GROWTH SECTORS 
 
CONSTRUCTION AND REAL ESTATE:  THE CONSTRUCTION 
SECTOR WITNESSED GROWING ACTIVITY IN 1994 AND THE 
FIRST QUARTER OF 1995.  ENGINEERING CONSTRUCTION 
PERMITS AND CEMENT DELIVERIES ROSE DRASTICALLY IN 
1994.  THE RECOVERY IS MOST EVIDENT IN MOUNT 
LEBANON.  CONSTRUCTION COSTS HAVE BEEN SLIGHTLY 
RISING IN DOLLAR TERMS.  TWO FIVE-STAR HOTELS--THE 
MERIDIEN AND MARRIOT--ARE EXPECTED TO OPEN THEIR 
DOORS SOON AND OTHER LUXURY HOTELS HAVE RECENTLY 
OPENED UP IN NORTH BEIRUT.  CONTRACTS WITH 
INTERCONTINENTAL HOTEL HAVE BEEN SIGNED TO MANAGE THE 
VENDOME AND PHOENICIA HOTELS.  REAL ESTATE AND 
CONSTRUCTION STILL ATTRACT A LARGE SHARE OF NEW 
PRIVATE INVESTMENT. 
 
INDUSTRY:  THE INDUSTRIAL SECTOR IS GRADUALLY PICKING 
UP.  IN THE FIRST QUARTER OF 1995, INDUSTRIAL EXPORTS 
CERTIFIED BY THE DIRECTORATE OF INDUSTRY TOTALED USD 
79.5 MILLION, A 76 PERCENT INCREASE OVER THE 
CORRESPONDING PERIOD IN 1994.  CERTIFIED INDUSTRIAL 
EXPORTS REPRESENT SOME 50 PERCENT OF ACTUAL 
INDUSTRIAL EXPORTS.  TWO CEMENT COMPANIES RECEIVED 
LOANS OF USD 160 MILLION AND USD 50 MILLION TO 
INCREASE THEIR PRODUCTION CAPACITY. 
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AGRICULTURE:  THE AGRICULTURAL SECTOR STILL SUFFERS 
FROM LABOR SHORTAGES, LACK OF AGRICULTURAL CREDIT 
FACILITIES, AND RISING COSTS OF SERVICES.  THE 
GOVERNMENT SUBSIDIZES SUGAR BEETS AND TOBACCO AND HAS 
SUCCEEDED IN REDUCING THE LUCRATIVE BUT ILLEGAL DRUG 
PRODUCTION IN WEST BIQA' AND BA'LABAK-HIRMIL. 
SEVERAL MULTILATERAL DONORS ARE FINANCING 
AGRICULTURAL AND LIVESTOCK PROJECTS.  IFAD IS 
FINANCING A USD 22 MILLION PROJECT FOR IMPROVING 
CATTLE BREEDING IN THE BIQA VALLEY AND IS CONSIDERING 
PURCHASING U.S. CATTLE. 
 
TRADE AND SERVICES:  THE DROP IN CONSUMPTION REFLECTS 
THE DIFFICULT TIMES FACING A SIGNIFICANT PORTION OF 
THE LEBANESE POPULATION.  LEBANON HAS TRADITIONALLY 
BEEN AN IMPORTING COUNTRY, WITH ITALY, FRANCE, 
GERMANY AND THE UNITED STATES AS ITS MAJOR 
SUPPLIERS.  LEBANON'S MAIN EXPORT MARKETS ARE THE 
ARAB COUNTRIES.  IS TRADE DEFICIT IS MORE THAN OFFSET 
BY CAPITAL INFLOWS, RESULTING IN BALANCE OF PAYMENTS 
SURPLUSES.  CUSTOMS REVENUES--A PRINCIPAL SOURCE OF 
GOVERNMENT INCOME--HAVE GRADUALLY PICKED UP AS FEES 
COLLECTION AND TAX ENFORCEMENT IMPROVE  AND AS OF 
MID-1995 WERE BEING TALKED OF AS A SOURCE OF REVENUES 
TO OFFSET POSSIBLE PUBLIC SECTOR SALARY INCREASES. 
THE LARGEST SHARE OF LEBANON'S CUSTOMS RECEIPTS ARE 
COLLECTED AT BEIRUT'S HARBOR AND AIRPORT. 
 
ACTIVITY AT BEIRUT HARBOR PICKED UP IN 1994 AS THE 
GOVERNMENT DEVELOPED PORT INFRASTRUCTURE.  THE 
CONSTRUCTION OF THE COMMERCIAL FREE ZONE AT BEIRUT 
HARBOR IS ALSO MOVING APACE.  ABOUT USD 550 MILLION 
IS EXPECTED TO BE INVESTED IN 1995-96 TO INCREASE 
PORT CAPACITY FIVEFOLD.  ACTIVITY AT BEIRUT 
INTERNATIONAL AIRPORT (BIA) ALSO GREW IN 1994.  THE 
LEBANESE GOVERNMENT STARTED AN AMBITIOUS--AND 
OFT-CRITICIZED--PROJECT TO MODERNIZE AND DEVELOP BIA 
TO ACCOMMODATE SIX MILLION PASSENGERS PER YEAR. 
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BANKING:  IMPROVING ECONOMIC AND FINANCIAL CONDITIONS 
IN 1994 LED TO FAVORABLE MONETARY AND BANKING 
ACTIVITY.  THE CONSOLIDATED BALANCE SHEET OF 
COMMERCIAL BANKS AND CUSTOMER DEPOSITS INCREASED 
CONSIDERABLY.  THE EXCHANGE RATE FOR THE LEBANESE 
POUND REMAINS STABLE AND LEBANESE POUND DEPOSITS 
CARRY HIGH YI 
ELDS.  THE RATIO OF FOREIGN DEPOSITS TO 
TOTAL DEPOSITS DROPPED FROM 70 PERCENT AT YEAR-END 
1993 TO 61.5 PERCENT IN 1994.  THE CENTRAL BANK OF 
LEBANON (CBL) AND 27 COMMERCIAL BANKS (REPRESENTING 
OVER 80 PERCENT OF LEBANON'S BANKING ACTIVITY) JOINED 
THE SWIFT (SOCIETY FOR WORLD INTERBANK FINANCIAL 
TRANSFER) NETWORK.  MONETARY AUTHORITIES ARE WORKING 
HARD ON DEVELOPING FINANCIAL MARKETS AND INSTRUMENTS 
TO CHANNEL SAVINGS INTO PRODUCTIVE SECTORS.  WESTERN 
UNION MONEY TRANSFER FACILITIES ARE OFFERED IN 
LEBANON.  AMERICAN EXPRESS, MASTER CARD, VISA CARD, 
DINERS CLUB, CARTE BLANCHE, AND EUROCARD CAN BE USED 
IN LEBANON, BUT MANY ESTABLISHMENTS ACCEPT ONLY CASH. 
 
GOVERNMENT ROLE IN THE ECONOMY 
 
LEBANON ENJOYS A FREE-MARKET ECONOMY AND A STRONG 
LAISSEZ-FAIRE COMMERCIAL TRADITION.  IN ORDER TO 
ATTRACT INVESTMENT, THE GOVERNMENT REDUCED LAST YEAR 
THE INCOME TAX RATE ON INDIVIDUALS AND CORPORATIONS 
TO A MAXIMUM OF TEN PERCENT, AND ON DIVIDENDS TO FIVE 
PERCENT.  THE GOVERNMENT IS SERIOUSLY CONSIDERING 
PRIVATIZATION OF SOME PUBLIC SERVICES.  IT HAS 
SUCCEEDED IN AWARDING SOME CONTRACTS ON A 
BUILD/OPERATE/TRANSFER (BOT) BASIS.  IN 1994 IT 
REDUCED THE STATE'S SHARES IN THREE LOCAL MEDIUM- AND 
LONG-TERM DEVELOPMENT BANKS TO 20 PERCENT IN ORDER TO 
ENCOURAGE PRIVATE SECTOR PARTICIPATION IN ECONOMIC 
RECONSTRUCTION. 
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BALANCE OF PAYMENTS SITUATION 
 
IN THE ABSENCE OF RELIABLE TRADE STATISTICS, LEBANON 
CALCULATES ITS BALANCE OF PAYMENTS BASED ON THE NET 
FOREIGN ASSETS OF THE BANKING SECTOR.  NET CAPITAL 
FLOWS IN 1994 REGISTERED A SURPLUS OF USD 6.5 
BILLION, WHICH OFFSET THE TRADE DEFICIT AND LED TO A 
SURPLUS IN THE BALANCE OF PAYMENTS OF NEARLY USD 1.13 
BILLION, COMPARED TO USD 1.17 BILLION IN 1993.  THIS 
SURPLUS WAS ATTRIBUTED TO INCREASES IN THE NET 
FOREIGN ASSETS OF THE CENTRAL BANK OF LEBANON (CBL). 
HOWEVER, IN THE FIRST QUARTER OF 1995, THE BALANCE OF 
PAYMENTS REGISTERED A DEFICIT OF USD 290.9 MILLION, 
MOSTLY DUE TO A FALL IN THE CBL'S AND COMMERCIAL 
BANKS' NET FOREIGN ASSETS. 
 
INFRASTRUCTURE SITUATION 
 
ELECTRICITY:  LEBANON'S ELECTRIC POWER SECTOR WAS 
SEVERELY DAMAGED DURING THE CIVIL WAR AND REMAINS THE 
SUBJECT OF MUCH DISCONTENT .  ELECTRIC POWER SUPPLY 
IS RATIONED; INDUSTRY, BUSINESS, AND MANY RESIDENCES 
RELY ON PRIVATE GENERATORS.  PRODUCTION CAPACITY WILL 
BE RAISED FROM 600 MEGAWATTS TO 1100 MEGAWATTS WITH 
THE ONGOING REHABILITATION OF POWER STATIONS AND 
NETWORK.  ANSALDO/SIEMENS (ITALIAN/GERMAN) CONSORTIUM 
HAS BEEN AWARDED A CONTRACT FOR THE CONSTRUCTION OF 
TWO COMBINED-CYCLE POWER STATIONS IN BIDDAWI (NORTH) 
AND ZAHRANI (SOUTH) WITH A PRODUCTION CAPACITY OF 450 
MEGAWATTS EACH.  A CONTRACT WAS ALSO SIGNED WITH 
ALSTHOM (FRANCE) TO PROVIDE FOUR GAS TURBINES, 
EQUALLY DISTRIBUTED BETWEEN BA'LABAK AND SIDON WITH A 
TOTAL PRODUCTION CAPACITY OF 150 MEGAWATTS.  A 
LEBANESE/SYRIAN AGREEMENT WAS REACHED TO SUPPLY NORTH 
OF LEBANON WITH 100 MEGAWATTS OVER THE NEXT ONE 
AND-A-HALF YEAR. 
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TELECOMMUNICATION:  THE REHABILITATION AND 
MODERNIZATION OF THIS SECTOR ARE AMONG THE 
GOVERNMENT'S TOP PRIORITIES.  ALCATEL (FRANCE), 
ERICSSON (SWEDEN), AND SIEMENS (GERMANY) HAVE 
SUCCEEDED IN REPLACING A LARGE NUMBER OF OLD 
ELECTRO-MECHANICAL TELEPHONE CENTRALS WITH MODERN 
ELECTRONIC SWITCHES.  FRANCE TELECOM AND TELECOM 
FINLAND ARE CARRYING OUT A 60,000 CELLULAR TELEPHONE 
LINES PROJECT ALL OVER LEBANON.  THE CELLULAR NETWORK 
IS NOW IN USE IN MOST PARTS OF THE COUNTRY, BUT 
SERVICE IS INCONSISTENT.  AT&T CARRIED OUT A USD 8.8 
MILLION PROJECT FOR AN UNDERSEA FILBER-OPTIC 
TELECOMMUNICATION CABLE CONNECTING LEBANON TO 
CYPRUS.  ANOTHER MARINE FIBER-OPTIC TELECOMMUNICATION 
PROJECT CONNECTING LEBANON, SYRIA, AND EGYPT IS BEING 
TENDERED. 
 
TRANSPORTATION:  A USD 7.6 MILLION PROJECT FOR THE 
SUPPLY OF A CIVIL AVIATION RADAR SYSTEM AT BEIRUT 
INTERNATIONAL AIRPORT RECENTLY HAS BEEN AWARDED TO 
RAYTHEON.  A LEBANESE/GERMAN JOINT VENTURE GROUP, 
CCC/HOCHTIEF, IS CARRYING OUT A USD 490 MILLION 
PROJECT 
FOR THE DEVELOPMENT AND REHABILITATION OF 
BEIRUT INTERNATIONAL AIRPORT ON A BOT BASIS.  THE 
BEIRUT PORT DIRECTORATE INVITED FORTY PREQUALIFIED 
COMPANIES TO BID FOR THE FIRST PHASE OF A FOUR-PHASE 
PROJECT FOR THE REHABILITATION AND DEVELOPMENT OF 
BEIRUT HARBOR.  PREQUALIFICATION BIDS FOR THE 
REMAINING THREE PHASES ARE STILL UNDER STUDY.  THE 
EUROPEAN INVESTMENT BANK WILL PROVIDE USD 55 MILLION 
OF FINANCING FOR PART OF THE BEIRUT HARBOR 
REHABILITATION PROJECT.  THE TOTAL COST OF THE 
PROJECT IS ESTIMATED TO REACH USD 126 MILLION. 
REHABILITATION OF THE BEIRUT PORT FREE TRADE ZONE 
AREA HAS BEEN RECENTLY ACCOMPLISHED.  REHABILITATION 
OF BEIRUT COASTAL HIGHWAYS AND THE HIGHWAY FROM 
BEIRUT TO THE SYRIAN BORDER HAVE BEEN AWARDED. 
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ENVIRONMENT:  THE WORLD BANK IS FINANCING A PROJECT 
FOR THE SUPPLY OF 180 GARBAGE TRUCKS.  THE PROJECT IS 
BEING TENDERED.  METCALF & EDDY (U.S.) IS BIDDING FOR 
THE REGIONAL ENVIRONMENTAL ASSESSMENT COASTAL ZONE 
AND FOR THE WASTE WATER TREATMENT CONSULTANCY 
SERVICES.  A LEBANESE COMPANY IS IN CHARGE OF SOLID 
WASTE COLLECTION AND TREATMENT.  MANY ENVISAGED 
ENVIRONMENTAL PROJECTS WERE PUT ON HOLD IN EARLY 1995. 
 
PUBLIC BUILDINGS:  OBREIN KRITZBURG WON A CONTRACT 
FOR THE REHABILITATION OF THE MURR TOWER BUILDING. 
TRAFALGAR HOUSE (BRITISH) IS REBUILDING THE BEIRUT 
SPORTS CITY.  A CONTRACT FOR THE REHABILTITATION OF 
CASINO DU LIBAN HAS BEEN AWARDED TO A LEBANESE/SAUDI 
CONSORTIUM.  A CONFERENCE CENTER PROJECT IN BEIRUT IS 
LAUNCHED ON BOT BASIS.  THE GOVERNMENT IS ALSO 
FOCUSING ON THE CONSTRUCTION OF PUBLIC HOSPITALS AND 
HEALTHCARE CENTERS ALL OVER LEBANON. 
 
THE RECONSTRUCTION OF DOWNTOWN BEIRUT IS A KEY 
PROJECT FOR THE GROWTH OF THE LEBANESE ECONOMY.  THE 
COMPANY FOR THE RECONSTRUCTION AND DEVELOPMENT OF 
BEIRUT'S COMMERCIAL CENTER (SOLIDERE), FORMED WITH A 
CAPITAL OF USD 1.8 BILLION, WILL FINANCE PART OF THE 
INFRASTRUCTURE WORKS.  THE COUNCIL FOR DEVELOPMENT 
AND RECONSTRUCTION (CDR) WILL BE THE EXECUTING BODY. 
THE SOCIETE FINANCIERE DU LIBAN, OWNED BY 46 LOCAL 
BANKS, IS OPERATING A SECONDARY MARKET FOR SOLIDERE 
SHARES UNDER CENTRAL BANK SUPERVISION.  THE 
INFRASTRUCTURE REHABILITATION AND RECONSTRUCTION WAS 
AWARDED TO A LEBANESE CONTRACTOR KHLAT AND MUAWAD 
ENGINEERING COMPANY. 
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CHAPTER III:  POLITICAL ENVIRONMENT 
 
U.S.-LEBANESE POLITICAL RELATIONSHIP:  THE UNITED 
STATES SEEKS TO PROMOTE POLITICAL STABILITY, ECONOMIC 
REDEVELOPMENT, AND THE INDEPENDENCE, SOVEREIGNTY, AND 
TERRITORIAL INTEGRITY OF LEBANON.  THE UNITED STATES 
HAS PROVIDED OVER USD 300 MILLION IN HUMANITARIAN 
RELIEF ASSISTANCE TO LEBANON IN THE PAST DECADE.  THE 
U.S. GOVERNMENT SPONSORS MODEST PROGRAMS TO ASSIST 
ADMINISTRATIVE REFORM OF THE CIVIL SERVICE AND THE 
RETURN OF DISPLACED LEBANESE TO THEIR HOMES AND 
PROVIDES ASSISTANCE TO THE LEBANESE ARMED FORCES TO 
SUPPORT ITS EFFORTS TO RESTORE CENTRAL GOVERNMENT 
AUTHORITY THROUGHOUT LEBANON. 
 
POLITICAL SYSTEM, ELECTIONS, AND POLITICAL PARTIES: 
LEBANON IS A DEMOCRATIC REPUBLIC WITH A PARLIAMENTARY 
SYSTEM OF GOVERNMENT.  LEBANESE POLITICS IS DOMINATED 
BY CONFESSIONAL GROUPS AND TRADITIONAL POWERFUL 
FAMILIES.  AN INFORMAL SYSTEM OF POWER SHARING AMONG 
LEBANON'S OFFICIALLY RECOGNIZED RELIGIOUS CONFESSIONS 
PERVADES ALL ASPECTS OF CIVIL SOCIETY.  THE PRESIDENT 
MUST BE A MARONITE CHRISTIAN, THE PRIME MINISTER A 
SUNNI MUSLIM, AND THE SPEAKER OF THE CHAMBER OF 
DEPUTIES A SHI'A MUSLIM.  THE PRESIDENT IS ELECTED 
FOR A SIX-YEAR TERM BY THE CHAMBER OF DEPUTIES.  THE 
CONSTITUTION PROHIBITS REELECTION OR EXTENSION, BUT 
IN 1995 A CONSTITUTIONAL AMENDMENT WAS UNDER 
CONSIDERATION TO PERMIT EXTENSION OF THE TERM OF THE 
CURRENT PRESIDENT, WHICH EXPIRES IN NOVEMBER 1995. 
 
THE PRIME MINISTER, NOMINATED BY THE PRESIDENT IN 
MANDATORY CONSULTATION WITH THE SPEAKER OF THE 
CHAMBER OF DEPUTIES, IS SUBJECT TO THE CHAMBER'S VOTE 
OF CONFIDENCE.  LEBANON'S 128 DEPUTIES ARE ELECTED BY 
THE VOTERS (THERE IS UNIVERSAL ADULT SUFFRAGE) FOR 
FOUR-YEAR TERMS, AND ARE D 
IVIDED EQUALLY BETWEEN 
CHRISTIANS AND MUSLIMS.  PARLIAMENTARY ELECTIONS WILL 
BE HELD IN 1996. 
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SINCE THE END OF THE LEBANESE CIVIL WAR IN 1991, THE 
GOVERNMENT HAS CONSOLIDATED ITS AUTHORITY IN MANY 
PARTS OF THE COUNTRY.  HOWEVER, SOME MILITIAS, 
INCLUDING HIZBALLAH AND ITS ALLIES IN THE SOUTH, HAVE 
NOT YET BEEN DISARMED. 
 
OUTSIDE FORCES STILL CONTROL MUCH OF LEBANON AND 
IMPINGE ON CENTRAL AUTHORITY.  THERE ARE ABOUT 30,000 
SYRIAN TROOPS IN THE COUNTRY.  ISRAEL (LARGELY 
THROUGH ITS PROXY ARMY OF SOUTH LEBANON (SLA) AND 
ABOUT 1000 ISRAELI TROOPS) EXERTS CONTROL IN AND NEAR 
A SECURITY ZONE IT ESTABLISHED FOR ITSELF IN SOUTHERN 
LEBANON.  PALESTINIAN GROUPS OPERATE AUTONOMOUSLY IN 
REFUGEE CAMPS THROUGHOUT THE COUNTRY.  (THERE ARE 
ABOUT 360,000 PALESTINIAN REFUGEES IN LEBANON.)  A 
CYCLE OF RAIDS AND COUNTERRAIDS IN THE SOUTH 
CONTINUES BETWEEN HIZBALLAH AND ITS ALLIES ON ONE 
SIDE AND ISRAELI DEFENSE FORCES AND THE SLA ON THE 
OTHER.  CIVILIANS IN THE SOUTH CONTINUE TO SUFFER 
ARTILLERY AND AERIAL ATTACKS, BOMBINGS, AND 
ABDUCTIONS. 
 
CHAPTER IV:  MARKETING U.S. PRODUCTS AND SERVICES 
 
THE USG HAS NO TRADE SANCTIONS AGAINST LEBANON, AND 
NO SPECIAL EXPORT LICENSE REQUIREMENTS APPLY. 
STANDARD USG EXPORT LICENSE CONTROLS ON ARMS AND 
MUNITIONS AND HIGH-TECH COMPUTERS APPLY.  LEBANON 
ENJOYS A COMPETITIVE OPEN MARKET AND A COMMERCIALLY 
ORIENTED ECONOMIC SYSTEM.  IN VIEW OF RESTRICTIONS ON 
THE USE OF U.S. PASSPORTS FOR TRAVEL TO LEBANON, U.S. 
COMPANIES ARE ENCOURAGED TO PARTICIPATE IN LEBANON'S 
RECONSTRUCTION BY DRAWING ON THEIR NON-U.S. STAFF, OR 
THROUGH THEIR REPRESENTATIVE OFFICES IN THE REGION. 
U.S. COMPANIES ARE ALSO ENCOURAGED TO FORM JOINT 
VENTURES TO BID ON MAJOR PROJECTS. 
 
U.S. COMMODITIES FACE STRONG COMPETITION FROM 
EUROPEAN GOODS DUE TO THE EXTENSIVE REPRESENTATION OF 
EUROPEAN COMPANIES IN THE LEBANESE MARKET, BUT WERE 
INCREASINGLY ATTRACTIVE IN THE LAST YEAR AS THE 
DOLLAR WEAKENED.  AT LEAST 65 U.S. BUSINESS 
REPRESENTATIVE OFFICES OPERATE IN LEBANON.  DURING 
THE PAST YEAR A NUMBER OF U.S. COMPANIES HAVE OPENED 
BRANCH OFFICES IN BEIRUT.  LEBANESE DISTRIBUTORS ARE 
GENERALLY EAGER TO FIND UNREPRESENTED U.S. CONSUMER 
PRODUCTS. 
 
LEBANON HAS GREAT POTENTIAL FOR U.S. FAST FOOD, 
COSMETICS, SPORTSWEAR, AND FASHION DESIGN FRANCHISES. 
 
STEPS TO ESTABLISHING AN OFFICE:  ANY FOREIGNER 
WISHING TO CONDUCT A BUSINESS IN LEBANON NEEDS A 
RESIDENCE PERMIT, A WORK PERMIT, AND TO REGISTER IN A 
LOCAL COMMERCIAL COURT.  FOR TRADE ACTIVITY, THE 
COMPANY MUST ALSO BE REGISTERED AT ANY OF THE FOUR 
CHAMBERS OF COMMERCE AND INDUSTRY. 
 
ADVERTIZING AND TRADE PROMOTION:  MAJOR NEWSPAPERS IN 
LEBANON ARE AL NAHAR, AL SAFIR, AL ANWAR, AL DIYAR, 
AND L'ORIENT LE JOUR (FRENCH).  THE MAJOR BUSINESS 
MAGAZINES IN LEBANON ARE LE COMMERCE DU LEVANT 
(FRENCH), MAL-WA-A'MAL, AL-BAYAN, AND ARAB AD 
(ENGLISH). 
 
PRICING PRODUCT/SALES SERVICE/CUSTOMER SUPPORT:  THE 
CONSUMER PROTECTION AGENCY AT THE MINISTRY OF 
ECONOMY, IN CHARGE OF CONTROLLING PRICES AND VALIDITY 
OF CONSUMABLES, LACKS EXPERIENCED INSPECTORS.  THE 
MINISTRY OF ECONOMY HAS AN AGREEMENT WITH THE UNDP TO 
REHABILITATE AND EQUIP THE ITS STATISTICAL/RESEARCH 
OFFICE 
 
SELLING TO THE GOVERNMENT:  GOVERNMENT PROCUREMENT IS 
USUALLY THROUGH TENDER BIDS.  IN SOME CASES, PROJECTS 
ARE AWARDED DIRECTLY TO FOREIGN COMPANIES IF 
FINANCING IS PROVIDED BY THEIR GOVERNMENTS THROUGH 
PROTOCOLS. 
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PROTECTING YOUR PRODUCT FROM IPR INFRINGEMENT:  THE 
GOL, THROUGH THE MINISTRY OF ECONOMY AND TRADE, 
PROVIDES NO REAL ENFORCEMENT OF INTELLECTUAL PROPERTY 
RIGHTS (IPR), ALTHOUGH IPR, PATENTS, TRADEMARKS, AND 
COPYRIGHTS ARE REGISTERED IN LEBANON.  EVEN WHEN 
VIOLATIONS COME TO THE MINISTRY'S ATTENTION, THE GOL 
IS UNLIKELY TO TAKE ENFORCEMENT ACTION.  THE MINISTRY 
HAS INVESTIGATED SOME IPR INFRINGEMENT CASES IN THE 
LEBANESE COURTS, BUT THE ONUS IS ON THE INFRINGED 
PARTY TO TAKE LEGAL ACTION.  UNAUTHORIZED COPYING OF 
IMPORTED PUBLICATIONS, VIDEOTAPES, CASSETTES, AND 
COMPUTER SOFTWARE IS COMMON IN LEBANON. 
 
NEED FOR A LOCAL ATTORNEY:  U.S. FIRMS WISHING TO 
CONDUCT BUSINESS IN LEBANON ARE ENCOURAGED TO HIRE A 
LOCAL ATTORNEY.  (A LIST OF LAWYERS PRACTICING IN 
LEBANON IS AVAILABLE ON REQUEST FROM THE EMBASSY'S 
CONSULAR SECTION OR FROM THE DEPARTMENT OF STATE'S 
AMERICAN CITIZEN SERVICES OFFICE IN THE BUREAU OF 
CONSULAR AFFAIRS.) 
 
CHAPTER V:  LEADING SECTORS FOR U.S. EXPORTS AND 
INVESTMENT 
 
BEST PROSPECTS FOR NON-AGRICULTURAL GOODS AND 
SERVICES: 
--TEL:  TELECOMMUNICATION EQUIPMENT 
--TRK:  TRUCKS, TRAILERS/BUSES 
--TRN:  TRANSPORTATION SERVICES 
--CPT:  COMPUTERS/PERIPHERALS 
--MED:  MEDICAL EQUIPMENT 
--HCS:  HEALTHCARE SERVICES 
--CONSTRUCTION DESIGN AND MANAGEMENT 
--DURABLE CONSUMER GOODS (APPLIANCES) 
--MOTOR VEHICLES 
--FRANCHISING 
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BEST PROSPECTS FOR AGRICULTURAL PRODUCTS: 
 
--WHEAT 
--RICE 
--DIARY PRODUCTS 
--VEGETABLE OIL 
--FROZEN MEAT AND POULTRY 
--CANNED AND FROZEN FOOD 
--PROCESSED FOOD 
--AGRICULTURAL EQUIPMENT 
--SEEDS 
--FERTILIZERS 
 
CHAPTER VI:  TRADE REGULATIONS AND STANDARDS 
 
TRADE AND INVESTMENT BARRIERS 
 
LEBANON IS A COUNTRY OF FREE TRADE.  SOME GOODS, SUCH 
AS COMPUTER HARDWARE AND SOFTWARE, FIREARMS, AND 
MUNITIONS, NEED AN IMPORT LICENSE FROM THE APPROPIATE 
GOVERNMENT AUTHORITY.  LEBANON ADHERES TO THE ARAB 
LEAGUE BOYCOTT OF ISRAEL, ALTHOUGH BOYCOTT 
ENFORCEMENT IS SELECTIVE.  RESTRICTIONS ON FOREIGNERS 
WISHING TO INVEST IN LEBANON ARE FEW, THOUGH THERE IS 
A CEILING ON REAL ESTATE ACQUISITION BY FOREIGNERS. 
THE LACK OF ADEQUATE INFRASTRUCTURE AND THE 
RESTRICTION ON THE USE OF U.S. PASSPORTS IN LEBANON 
ARE MAJOR OBSTACLES FOR U.S. INVESTMENT.  MOREOVER, 
THE ABSENCE OF OPIC COVERAGE PUTS U.S. INVESTORS AND 
SUPPLIERS AT A DISADVANTAGE VIS-A-VIS MAJOR WESTERN 
EUROPEAN COMPETITORS. 
 
TOTAL 1994 IMPORTS AMOUNTED TO ABOUT USD 6 BILLION, 
WHILE EXPORTS REACHED USD 500 MILLION--A TRADE 
DEFICIT BLANCE OF ABOUT USD 5.5 BILLION.  LEBANON'S 
IMPORTS FROM THE USA TOTALED USD 555 MILLION IN 1994, 
9.2 PERCENT OF TOTAL IMPORTS. 
- 
LEBANON HAS FIVE COMMERCIAL HARBORS: BEIRUT, TRIPOLI, 
JOUNIYAH, SIDON, AND TYRE; ONE INTERNATIONAL AIRPORT 
IN BEIRUT; AND THREE ROAD BORDER CROSSING CHECKPOINTS 
WITH SYRIA AT MASNA', ABBOUDIYAH, AND QAA'.  CUSTOMS 
DUTIES PROVIDE ABOUT 50 PERCENT OF TOTAL GOVERNMENT 
REVENUES.  FOR TEMPORARY ENTRY OF HEAVY MACHINERY AND 
VEHICLES, IMPORTERS CAN USE CUSTOMS-BONDED WAREHOUSES 
INSURED BY BEIRUT PORT, A RATHER EXPENSIVE 
ALTERNATIVE.  IMPORTERS MAY ALSO KEEP THEIR PRODUCTS 
IN PRIVATELY LEASED OR OWNED WAREHOUSES AGAINST A 
ONE-YEAR BANK GUARANTEE REFUNDABLE UPON SETTLEMENT OF 
CUSTOMS DUTIES PLUS AN ANNUAL NONREFUNDABLE 
WAREHOUSING FEE.  THE RECONSTRUCTION OF A 120,000 
SQUARE METER FREE ZONE AT THE PORT OF BEIRUT IS UNDER 
EXECUTION.  A 6,000-SQUARE METER BUILDING IS UNDER 
CONSTRUCTION, WHERE BONDED WAREHOUSES WILL BE 
LOCATED.  THE LEBANESE CUSTOMS DIRECTORATE IS IN 
CHARGE OF CONTROLLING LABELING AND MARKING 
REQUIREMENTS. 
 
THE LEBANESE GOVERNMENT IMPOSES RESTRICTIONS ON 
MUNITIONS TRADE.  THE IMPORT, EXPORT, AND RE-EXPORT 
OF MILITARY EQUIPMENT, MUNITIONS, AND SPARE PARTS, IS 
SUBJECT TO LICENSE.  NON-MILITARY WEAPONS AND 
AMMUNITION FOR HUNTING ARE SUBJECT TO LICENSE AS 
WELL.  ONLY LEBANESE CITIZENS AT LEAST TWENTY-ONE 
YEARS OF AGE, MENTALLY STABLE, AND WITH A CLEAN 
SECURITY RECORD CAN OBTAIN IMPORT LICENSES FOR 
MUNITIONS.  IN EXCEPTIONAL CASES A FOREIGNER CAN 
OBTAIN A LICENSE FOR NON-MILITARY MUNITIONS TRADE. 
 
LEBANON ADHERES TO A SPECIAL VISA ARRANGEMENT FOR 
TEXTILE EXPORTS TO THE UNITED STATES EFFECTIVE 
JULY 1, 1994.  THE LEBANESE GOVERNMENT IS CONSIDERING 
JOINING THE GENERAL AGREEMENT ON TARIFFS AND TRADE 
(GATT). 
- 
CHAPTER VII:  INVESTMENT CLIMATE 
 
A.  INVESTMENT REGIME 
 
AL.  OPENNESS TO FOREIGN INVESTMENT 
 
LEBANON OFFERS THE MOST LIBERAL INVESTMENT CLIMATES 
IN THE MIDDLE EAST.  THE GOL IS TRYING TO ATTRACT 
FOREIGN DIRECT INVESTMENT TO FOSTER ECONOMIC RECOVERY 
BY:  REDUCING THE MAX 
IMUM INCOME TAX RATE FOR 
INDIVIDUALS AND CORPORATIONS TO TEN PERCENT, AND FOR 
DIVIDENDS TO FIVE PERCENT; CONSIDERING PRIVATIZATION 
OF SOME PUBLIC SERVICES; RESORTING TO BOT-TYPE 
CONTRACTS; AND ISSUING DOLLAR-DENOMINATED EURO BONDS 
TO FINANCE MAJOR PROJECTS. 
 
WITH VERY FEW EXCEPTIONS, THERE IS NO DISCRIMINATION 
BETWEEN NATIONAL AND FOREIGN INVESTMENT.  THE 
GOVERNMENT HAS BEEN INVITING MULTINATIONALS TO 
PRE-QUALIFY FOR THE EXECUTION OF PROJECTS LISTED IN 
THE GOVERNMENT'S AMBITIOUS RECONSTRUCTION AND 
DEVELOPMENT PROGRAM.  ONLY PRE-QUALIFIED COMPANIES 
ARE ELIGIBLE TO BID ON PROJECTS.  U.S. AND OTHER 
FOREIGN FIRMS HAVE BEEN ENCOURAGED TO PARTICIPATE IN 
THESE PROJECTS, WHETHER DIRECTLY OR THROUGH JOINT 
VENTURES, IN WAYS WHICH DO NOT REQUIRE THE PRESENCE 
OF U.S. CITIZENS IN LEBANON. 
 
FOREIGNERS DOING BUSINESS IN LEBANON MUST HAVE WORK 
AND RESIDENCY PERMITS AND A COMMERCIAL REGISTER. 
THERE ARE NO DISCRIMINATORY OR EXCESSIVELY ONEROUS 
REQUIREMENTS INHIBITING FOREIGN INVESTORS. 
 
THERE ARE NO THOROUGH AND RELIABLE STATISTICS ON 
LABOR.  LEBANESE PROFESSIONALS ARE RETURNING TO 
LEBANON FROM ABROAD, ATTRACTED BY AN EXPANDING 
BUSINESS COMMUNITY, MAINLY BANKING, FINANCIAL 
INSTITUTIONS, AND INTERNATIONAL AUDITING FIRMS. 
HOWEVER, LOCAL UNSKILLED LABOR IS IN SHORT SUPPLY. 
THE CONSTRUCTION SECTOR, AGRICULTURE, SOME 
INDUSTRIES, AND HOUSEHOLDS HAVE RESORTED TO FOREIGN 
LABOR, MAINLY ARAB, ASIAN AND AFRICAN. 
- 
THE MOVEMENT OF FUNDS IN AND OUT OF LEBANON IS FREE 
FROM TAXES, FEES, OR RESTRICTIONS, AND BANK SECRECY 
REGULATIONS ARE STRICTLY ENFORCED. 
 
ALL COMPANIES ESTABLISHED IN LEBANON MUST ABIDE BY 
THE LEBANESE COMMERCIAL CODE AND REGULATIONS. 
GENERALLY, A COMPANY IS ESTABLISHED EITHER AS A 
JOINT-STOCK CORPORATION OR AS A LIMITED LIABILITY 
PARTNERSHIP.  OTHER SPECIFIC REQUIREMENTS SUMMARIZED 
BELOW APPLY FOR HOLDING AND OFFSHORE CORPORATIONS, 
REAL ESTATE, INSURANCE, BANKING COMPANIES, AND 
COMMERCIAL REPRESENTATION.  THERE ARE NO 
SECTOR-SPECIFIC LAWS ON ACQUISITIONS, MERGERS, AND 
TAKEOVERS, EXCEPT FOR BANK MERGERS.  LEBANON 
ENCOURAGES COOPERATION BETWEEN FOREIGN AND LEBANESE 
COMPANIES, BUT SETS NO GENERAL REQUIREMENTS FOR JOINT 
VENTURES.  FOREIGN INVESTORS ARE FREE TO NEGOTIATE 
TERMS WITH LEBANESE ENTERPRISES.  ALL COMPANIES ARE 
REQUIRED TO RETAIN THE SERVICES OF A LAWYER. 
 
A)  A JOINT-STOCK CORPORATION (SOCIETE ANONYME 
LIBANAISE, OR S.A.L.) SHOULD HAVE A MINIMUM 
AUTHORIZED CAPITAL OF LL 30 MILLION (OF WHICH 25 
PERCENT MUST BE ENTIRELY PAID); AT LEAST THREE 
SHAREHOLDERS; A BOARD OF DIRECTORS OF THREE TO TWELVE 
MEMBERS (THE MAJORITY BEING LEBANESE); AND AN 
AUDITOR.  A JOINT-STOCK CORPORATION IS SUBJECT TO TEN 
PERCENT TAX ON NET PROFITS AND FIVE PERCENT ON THE 
DISTRIBUTION OF DIVIDENDS. 
 
B) A LIMITED LIABILITY PARTNERSHIP COMPANY (SOCIETE A 
RESPONSABILITE LIMITEE, OR S.A.R.L.) SHOULD HAVE A 
MINIMUM PAID-IN CAPITAL OF LL 5 MILLION; THREE TO 
TWENTY PARTNERS REGARDLESS OF NATIONALITY (AND A 
MANAGER WHO NEED NOT BE A PARTNER OR LEBANESE); AND 
AN AUDITOR IF THE CAPITAL IS RAISED TO LL 30 MILLION 
OR MORE. 
- 
C)  THE ACTIVITY OF HOLDING CORPORATIONS IS LIMITED 
TO ACQUISITION OF SHARES/EQUITY; MANAGEMENT AND 
PROVISION OF TAXABLE CREDIT FACILITIES TO COMPANIES 
OPERATING IN LEBANON IN WHICH THE HOLDING CORPORATION 
OWNS AT LEAST 20 PERCENT OF SHARES; HOLDING AND 
LEASING PATENTS, INVENTIONS, CONCESSION RIGHTS, AND 
REGISTERED TRADEMARKS; AND ACQUISITION OF REAL ESTATE 
NEEDED FOR OPERATIONS IN COMPLIANCE WITH THE LEBANESE 
LAW ON FOREIGN OWNERSHIP OF REAL ESTATE.  CAPITAL MAY 
BE IN FOREIGN CURRENCY AND ACCOUNTING BOOKS CAN BE 
KEPT IN THE SAME CURRENCY.  THE BOARD OF DIRECTORS OF 
A HOLDING CORPORATION SHOULD HAVE AT LEAST TWO 
LEBANESE MEMBERS.  A NON-LEBANESE CHAIRMAN RESIDENT 
ABROAD CAN OPERATE WITHOUT A WORK PERMIT.  EXECUTIVE 
BOARD AND SHAREHOLDERS MEETINGS CAN BE HELD ABROAD. 
AN ANNUAL TAX OF 0.15 PER CENT ON CAPITAL IS IMPOSED. 
 
D)  OFFSHORE CORPORATIONS:  A BANK GUARANTEE OF LL 
100,000 IS REQUESTED UPON ESTABLISHMENT.  THE 
ACTIVITY OF OFFSHORE CORPORATIONS IS LIMITED TO 
CONCLUDING CONTRACTS AND AGREEMENTS FOR OPERATIONS 
OUTSIDE LEBANON; USE OF THE CUSTOMS FREE ZONE; AND 
PREPARATION OF STUDIES OR CONSULTING FOR USE ABROAD. 
THE CAPITAL MAY BE EXPRESSED IN ANY CURRENCY AND 
ACCOUNTING CAN BE IN FOREIGN CURRENCY.  THE EXECUTIVE 
BOARD SHOULD HAVE AT LEAST TWO LEBANESE MEMBERS.  A 
NON-LEBANESE CHAIRMAN RESIDENT ABROAD CAN OPERATE 
WITHOUT A WORK PERMIT.  PROFITS OF THE CORPORATION 
ARE EXEMPT FROM INCOME TAXES IN LEBANON, ALTHOUGH 
OFFSHORE CORPORATIONS ARE SUBJECT TO AN ANNUAL TAX OF 
ONE MILLION LEBANESE POUNDS. 
 
E)  BRANCH OF A FOREIGN COMPANY:  A FOREIGN COMPANY 
MAY REGISTER EITHER A BRANCH OR A REPRESENTATIVE 
OFFICE IN LEBANON TO CONDUCT BUSINESS.  A BRANCH IS A 
JOINT-STOCK CORPORATION SUBJECT TO CORPORATE AND 
PERSONAL INCOME TAX.  A REPRESENTATIVE OFFICE IS 
SUBJECT TO PERSONAL INCOME TAX ONLY. 
- 
F)  REAL ESTATE COMPANIES:  TRANSACTIONS ARE SUBJECT 
TO A 1969 DECREE GOVERNING REAL ESTATE ACQUISITION BY 
NON-LEBANESE.  FOREIGNERS OR FOREIGN COMPANIES 
(EXCEPT NATIONALS OF ARAB COUNTRIES) NEED SPECIAL 
GOVERNMENT AUTHORIZATION TO ACQUIRE PROPERTY IN 
LEBANON.  FOREIGNERS CAN FORM WITH LEBANESE PARTNERS 
A LOCAL JOINT-STOCK CORPORATION OR LIMITED-LIABILITY 
PARTNERSHIP TO INVEST IN REAL ESTATE DEVELOPMENT 
PROJECTS. 
 
G)  INSURANCE COMPANIES HAVE TO BE JOINT-STOCK 
CORPORATIONS AND NEED SPECIAL AUTHORIZATION FROM THE 
MINISTRY OF ECONOMY.  INSURANCE COMPANIES MUST HAVE 
MINIMUM PAID CAPITAL OF LL 300 MILLION IN ADDITION TO 
LL 90 MILLION BASIC RESERVES (FOR LIFE, FIRE, 
TRANSPORTATION, AND GENERAL ACCIDENTS) AND A LL 750 
MILLION CAUTIONARY GUARANTEE. (THE GOVERNMENT HAS 
PROPOSED TO THE PARLIAMENT A DRAFT LAW RAISING THE 
CAPITAL TO LL 1.5 BILLION AS WELL AS BASIC 
RESERVES).  AT LEAST FIFTY PERCENT OF THE VALUE OF 
NOMINATIVE SHARES SHOULD BE PAID UPON FORMATION 
PROVIDED THAT THE REMAINING PAYMENTS ARE SETTLED SIX 
MONTHS LATER.  FOREIGN INSURANCE COMPANIES CAN 
APPOINT A REPRESENTATIVE RESIDING IN LEBANON.  THE 
FOREIGN INSURANCE COMPANY MUST DEMONSTRATE RECIPROCAL 
TREATMENT FOR LEBANESE COMPANIES IN ITS HOME COUNTRY 
(EXCEPT IN THOSE COUNTRIES WHERE INSURANCE IS 
NATIONALIZED).  A FOREIGN INSURANCE COMPANY WILL BE 
LICENSED TO DEAL IN THE SAME TYPES OF INSURANCE IN 
LEBANON AS IN ITS HOME COUNTRY. 
 
H)  BANKS MUST BE JOINT-STOCK CORPORATIONS AND NEED 
CBL AUTHORIZATION. A RECENT CBL DIRECTIVE ON GRANTING 
A LICENSE TO A FOREIGN BANK STIPULATES A CAPITAL OF 
USD 5 MILLION, THE OPENING OF ONE BRANCH ONLY, AND 
INVESTING 30 PERCENT OF THE DEPOSITS IN LEBANON.  ALL 
BANK SHARES ARE NOMINATIVE AND TRANSFER OF SHARES IS 
SUBJECT TO CBL APPROVAL.  ONE THIRD OF THE SHARES 
MUST BE HELD BY LEBANESE OR LEBANESE COMPANIES IN 
WHICH FOREIGNERS CAN HOLD SHARES. 
- 
I)  OTHER FINANCIAL INSTITUTIONS MUST BE JOINT-STOCK 
CORPORATIONS AND NEED APPROVAL FROM THE CBL.  THE 
LAST CBL CENTRAL COUNCIL DIRECTIVE SET THE CAPITAL AT 
LL TWO BILLION.  ONE THIRD OF THE SHARES MUST BE 
OWNED BY LEBANESE, BUT REQUIREMENTS ARE MORE LIBERAL 
THAN FOR BANKS WITH RESPECT TO SHARES AND TRANSFER. 
J)  COMMERCIAL REPRESENTATION COMPANIES ARE SUBJECT 
TO LAW NUMBER 34/67 ON EXCLUSIVE RIGHTS FOR 
COMMERCIAL REPRESENTATION, DISTRIBUTORSHIP, AND 
FRANCHISING.  SUCH COMPANIES CAN BE EITHER LIMITED 
PARTNERSHIPS OR JOINT-STOCK CORPORATIONS.  TWO THIRDS 
OF THE BOARD OF DIRECTORS MUST BE LEBANESE.  BOTH 
TYPES MUST HAVE A MAJORITY OF LEBANESE PARTNERS OR 
SHAREHOLDERS HOLDING CAPITAL AND A LEBANESE MANAGER. 
 
IN ADDITION TO TAX ADVANTAGES, LEBANESE LAW 
ENCOURAGES BANK MERGERS.  TAX INCENTIVES ARE ALSO 
AVAILABLE TO INDUSTRIES LOCATED OUTSIDE BEIRUT. 
 
LEBANON DOES NOT DISCRIMINATE BETWEEN LEBANESE AND 
FOREIGN INVETORS OR AMONG FOREIGN INVESTORS, EXCEPT 
IN THE CASE OF REAL ESTATE OWNERSHIP.  ARAB NATIONALS 
ARE ALLOWED TO OWN UP TO 5,000 SQUARE METERS WITHOUT 
A SPECIAL PERMIT.  FOR LARGER AREAS, A PERMIT IS 
REQUIRED.  LEBANON HAS TARIFF PROTECTION FOR SOME 
GOODS MANUFACTURED LOCALLY. 
 
A2. CONVERSION AND TRANSFER POLICIES 
 
THE LEBANESE CONSTITUTION EMPHASIZES A FREE ECONOMY. 
THERE ARE NO RESTRICTIONS ON THE MOVEMENT OF CAPITAL, 
CAPITAL GAINS, REMITTANCES, OR DIVIDENDS.  NEITHER 
ARE THERE RESTRICTIONS ON THE CONVERSION OF FOREIGN 
CURRENCIES OR PRECIOUS METALS.  FOREIGN CURRENCIES 
ARE WIDELY AVAILABLE AND CAN BE PURCHASED FROM 
COMMERCIAL BANKS OR MONEY DEALERS AT MARKET RATES. 
THERE ARE NO DELAYS IN REMITTING INVESTMENT RETURNS 
EXCEPT FOR THE NORMAL TIME REQUIRED BY THE BANKS TO 
CARRY OUT TRANSACTIONS.  THE U.S. EMBASSY, WHICH USES 
THE AVERAGE OPENING DOLLAR EXCHANGE RATES OBTAINED 
FROM THE CENTRAL BANK OF LEBANON AND THREE OTHER 
LOCAL COMMERCIAL BANKS, PURCHASES LEBANESE POUNDS 
ONLY IN THE AMOUNT NEEDED FOR SHORT TERM EXPENSES. 
 
THE LEBANESE POUND (LL) HAS GRADUALLY STRENGTHENED 
VIS-A-VIS THE U.S. DOLLAR, AND TRADED AT LL 1621 FOR 
ONE DOLLAR ON JUNE 30, 1995. THIS REPRESENTS AN 
INCREASE IN VALUE OF 1.6 PERCENT SINCE DECEMBER 31, 
1994.  THIS TREND IS EXPECTED TO CONTINUE IN THE 
SHORT TERM--DESPITE RISING DEMAND FOR DOLLARS FED BY 
POLITICAL UNCERTAINTY--DUE TO DAILY INTERVENTION ON 
THE FOREIGN MARKET BY CBL. 
 
A3. EXPROPRIATION AND COMPENSATION 
 
EXPROPRIATION OF INVESTMENTS IS A VIOLATION OF 
LEBANESE LAWS AND REGULATIONS.  SOME PUBLIC SERVICES 
CONCESSIONS GIVEN TO THE PRIVATE SECTOR FIXED PERIODS 
REVERT TO THE GOVERNMENT UPON EXPIRATION OF THE 
CONCESSION.  LAND EXPROPRIATION IN LEBANON IS RARE. 
THE GOVERNMENT EXPROPRIATES PROPERTY ONLY FOR PUBLIC 
UTILITY PROJECTS--MAINLY FOR ENLARGING HIGHWAYS AND 
STREETS.  COMPENSATION IS PAID AT THE TIME OF 
EXPROPRIATION. 
 
THE GOVERNMENT DOES NOT DISCRIMINATE AGAINST U.S. OR 
ANY FOREIGN INVESTMENT, COMPANY, OR REPRESENTATIVE, 
AND IS NOT EXPECTED TO DO SO IN THE FUTURE. 
 
A4. DISPUTE SETTLEMENT 
 
WE HAVE NO RECORD OF ANY INVESTMENT DISPUTE OR LAND 
EXPROPRIATION CASE INVOLVING U.S. INVESTORS.  IN THE 
MID-1980'S, THERE WERE CLAIMS BY CONTRACTORS TO RAISE 
THE VALUE OF CONTRACTS SIGNED WITH THE GOL TO COVER 
DEPRECIATION OF THE LEBANESE POUND AT THAT TIME. 
THE LEGAL SYSTEM, MODELED AFTER THE FRENCH SYSTEM, IS 
BEING STUDIED FOR MODERNIZATION, AND NEW LAWS TEND TO 
FOLLOW INTERNATIONAL PATTERNS.  STILL, COURT CASES 
ARE NOT SETTLED RAPIDLY BECAUSE OF SHORTAGE OF JUDGES 
AND INADEQUATE SUPPORT STRUCTURE.  MONETARY AWARDS IN 
CONTRACT CASES ARE MADE ACCORDING TO THE CURRENCY OF 
THE CONTRACT.  JUDGMENTS OF FOREIGN COURTS ARE 
ENFORCED SUBJECT TO THE EXEQUATUR OBTAINED.  LEBANON 
HAS A COMMERCIAL CODE AND A BANKRUPTCY LAW.  UNDER 
THE LATTER, A SECURED CREDITOR HAS A RIGHT TO SHARE 
IN THE ASSETS OF A BANKRUPT PARTY. 
 
THE CONCEPT OF A MORTGAGE EXISTS, AND SECURED 
INTERESTS IN PROPERTY ARE RECOGNIZED AND ENFORCED. 
SUCH SECURITY INTERESTS MUST BE RECORDED IN THE 
COMMERCIAL REGISTER AND THE REAL ESTATE REGISTER. 
 
THE "LEBANESE CENTER FOR ARBITRATION" BECAME 
OPERATIONAL ON MAY B, 1995.  CREATED BY ECONOMIC 
ORGANIZATIONS, INCLUDING THE FOUR LEBANESE CHAMBERS 
OF COMMERCE AND INDUSTRY, THE CENTER WILL ACT AS AN 
ARBITRATOR IN SOLVING LEBANESE AND INTERNATIONAL 
CONFLICTS RELATED TO TRADE AND INVESTMENT. 
 
LEBANON IS NOT A MEMBER OF THE INTERNATIONAL CENTER 
FOR THE SETTLEMENT OF INVESTMENT DISPUTES OR OF THE 
NEW YORK CONVENTION OF 1958 ON THE RECOGNITION AND 
ENFORCEMENT OF FOREIGN ARBITRAL AWARDS, BUT MIGHT 
JOIN.  ACCORDING TO LEBANESE LAWS, INTERNATIONAL 
ARBITRAL DECISIONS ARE ENFORCED IN LEBANON WITHOUT 
EXEQUATUR. 
 
A5. PERFORMANCE REQUIREMENTS/INCENTIVES 
 
THERE ARE NO PERFORMANCE REQUIREMENTS IMPOSED AS A 
CONDITION FOR ESTABLISHING, MAINTAINING, OR EXPANDING 
AN INVESTMENT.   THERE IS NO REQUIREMENT ON FOREIGN 
INVESTORS REGARDING GEOGRAPHIC LOCATION, AMOUNT OF 
LOCAL CONTENT, IMPORT SUBSTITUTION, OR EXPORT 
EXPANSION.  INDUSTRIES LOCATED OUTSIDE BEIRUT ENJOY 
TAX INCENTIVES.  INVESTORS ARE NOT REQUIRED TO 
DISCLOSE PROPRIETARY INFORMATION AS PART OF THE 
REGULATORY APPROVAL PROCESS, EXCEPT IN THE CASE OF 
BANKS, WHICH REQUIRE CENTRAL BANK APPROVAL FOR 
TRANSFER OF OWNERSHIP. 
- 
NOTE: NO INVESTOR CAN HOLD MORE THAN TEN PERCENT OF 
THE SHARES OF "SOLIDERE" (THE REAL ESTATE COMPANY FOR 
THE RECONSTRUCTION OF BEIRUT DOWNTOWN COMMERCIAL 
CENTER). THESE SHARES ARE NOMINAL. 
 
A6. RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT 
 
THE RIGHT TO PRIVATE OWNERSHIP IS SACRED IN LEBANON. 
FOREIGNERS CAN ENGAGE IN ALL KINDS OF RENUMERATIVE 
ACTIVITY. THEY CAN FREELY ESTABLISH, ACQUIRE, AND 
DISPOSE OF INTERESTS IN BUSINESS ENTERPRISES. 
 
A7. PROTECTION OF PROPERTY RIGHTS 
 
VIOLATION OF INTELLECTUAL PROPERTY RIGHTS (IPR) IS A 
SERIOUS PROBLEM IN LEBANON, EVEN THOUGH LEBANON IS A 
SIGNATORY TO BOTH THE BERN AND UNIVERSAL COPYRIGHT 
COVENTIONS.  IN THEORY, SOME LOCAL LAWS AFFORD 
ADDITIONAL PROTECTION FOR FOREIGN INTELLECTUAL 
PROPERTY.  HOWEVER, THE GOL, THROUGH THE MINISTRY OF 
ECONOMY AND TRADE, PROVIDES NO REAL PROTECTION FOR 
IPR IN LEBANON.   LEBANON HAS AN INADEQUATE 
COPYRIGHT LAW DATING FROM 1924.  PATENTS, TRADEMARKS, 
AND COPYRIGHTS ARE REGISTERED IN LEBANON WITHOUT 
PRIOR STUDY AND APPROVAL BY THE GOVERNMENT AND 
WITHOUT GUARANTEE, ALONG THE LINES OF THE FRENCH 
LEGAL SYSTEM.  EVEN WHEN VIOLATIONS COME TO THE 
MINISTRY'S ATTENTION, THE GOL IS UNLIKELY TO REACT. 
THE ONLY TIME THE MINISTRY DOES INVESTIGATE AND 
SUBMIT A REPORT ON A SPECIFIC VIOLATION IS WHEN THE 
AGGRIEVED PARTY RESORTS TO THE LEBANESE COURTS. 
UNAUTHORIZED COPYING OF IMPORTED BOOKS, VIDEOTAPES, 
CASSETTES, AND COMPUTER SOFTWARE IS COMMON IN 
LEBANON.  DESPITE RECENT ATTEMPTS TO REGULATE THE 
MEDIA, MANY LEBANESE TELEVISION STATIONS BROADCAST 
FILMS WITHOUT ANY ROYALTY PAYMENT TO OR AUTHORIZATION 
FROM COPYRIGHT HOLDERS. 
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A8. REGULATORY SYSTEM:  LAWS AND PROCEDURE 
 
LEBANON WELCOMES FOREIGN INVESTMENTS, INCLUDING THOSE 
FROM THE UNITED STATES.  FOREIGN INVESTORS GENERALLY 
CAN ESTABLISH A LEBANESE COMPANY EASILY, PARTICIPATE 
IN A JOINT VENTURE WITH AN EXISTING LEBANESE COMPANY, 
OR ESTABLISH A BRANCH OR SUBSIDIARY OF A FOREIGN 
COMPANY. 
 
THE GOL PROMOTES COMPETITION AMONG COMPANIES BIDDING 
ON GOVERNMENT CONTRACTS.  TO ENCOURAGE MARKET-BASED 
COMPETITION, LEBANESE FIRMS CAN NO LONGER ACT AS 
EXCLUSIVE REPRESENTATIVE OF FOREIGN FIRMS FOR BASIC 
COMMODITIES.  THE MINISTRY OF ECONOMY AND TRADE IS 
CONSIDERING EXTENDING THIS PRINCIPLE TO OTHER 
COMMODITIES. 
 
A9. EFFICIENT CAPITAL MARKETS AND PORTFOLIO INVESTMENT 
 
THE GOVERNMENT PERMITS THE FREE EXCHANGE OF 
CURRENCIES, PRECIOUS METALS, AND MONETARY 
INSTRUMENTS, BOTH DOMESTICALLY AND IN FOREIGN TRADE. 
CREDIT IS ALLOCATED ON MARKET TERMS, AND FOREIGN 
INVESTORS CAN GET CREDIT FACILITIES ON THE LOCAL 
MARKET.  THE PRIVATE SECTOR HAS ACCESS TO OVERDRAFTS 
AND DISCOUNTED TREASURY BILLS.  THE BEIRUT STOCK 
MARKET IS EXPECTED TO RESUME OPERATIONS IN EARLY FALL 
1995.  NEW FINANCIAL INSTRUMENTS WILL BE INTRODUCED 
GRADUALLY.  TRANSPARENCY IS NOT A COMMON 
CHARACTERISTIC IN LEBANESE INVESTMENTS.  SOME SECTORS 
ARE DOMINATED BY BUSINESSES IN THE HANDS OF 
TRADITIONAL, COMMERCIALLY POWERFUL FAMILIES.  THE 
GOVERNMENT IS TRYING TO IMPROVE TRANSPARENCY IN ORDER 
TO HELP REESTABLISH AN EMERGING CAPITAL MARKET FOR 
COMPANY SHARES. 
 
THERE ARE NO KNOWN PRACTICES BY PRIVATE FIRMS WHICH 
RESTRICT FOREIGN INVESTMENT OR PARTICIPATION IN OR 
CONTROL OF DOMESTIC ENTERPRISES, EXCEPT AS MENTIONED 
ABOVE.  THE BANKING SYSTEM IS SOUND AND BANK SECRECY 
LAWS ARE ENFORCED.  THE ESTIMATED TOTAL ASSETS OF 
LEBANON'S FIVE LARGEST COMMERCIAL BANKS WAS ABOUT USD 
4 BILLION IN 1993, OR ABOUT 36.8 PERCENT OF TOTAL 
BANKING ASSETS.  LESS THAN TEN PERCENT OF THE TOTAL 
ASSET BASE IS ESTIMATED AS NON-PERFORMING. 
 
ALO. POLITICAL VIOLENCE 
 
LEBANON'S LOCATION BETWEEN TWO MAJOR PROTAGONISTS-- 
ISRAEL AND SYRIA--DIRECTLY AFFECTS THE COUNTRY'S 
POLITICAL AND SECURITY ENVIRONMENT. 
 
SINCE THE END OF THE CIVIL WAR IN 1991, THE 
GOVERNMENT HAS CONSOLIDATED ITS AUTHORITY IN SOME 
PARTS OF LEBANON BY DISARMING SOME MILITIAS. 
HOWEVER, THE GOVERNMENT HAS NOT DISARMED HIZBALLAH 
AND ITS ALLIES, AND HIZBALLAH IS ACTIVE IN SOUTHERN 
LEBANON, PARTS OF THE BIQA' VALLEY, AND THE SOUTHERN 
SUBURBS OF BEIRUT. 
 
ISRAEL EXERTS CONTROL IN AND NEAR A SECURITY ZONE IT 
HAS ESTABLISHED FOR ITSELF IN SOUTHERN LEBANON, 
LARGELY THROUGH THE ARMY OF SOUTH LEBANON (SLA) AND 
ISRAELI DEFENSE FORCES.  A CYCLE OF RAIDS AND 
COUNTERRAIDS IN THE SOUTH CONTINUES BETWEEN HIZBALLAH 
AND ITS ALLIES ON ONE SIDE AND ISRAELI DEFENSE FORCES 
AND THE SLA ON THE OTHER.  CIVILIANS CONTINUE TO BE 
VICTIMS OF ARTILLERY AND AERIAL ATTACKS, BOMBINGS, 
AND ABDUCTIONS. 
 
WARNING:  THE U.S. DEPARTMENT OF STATE WARNS ALL U.S. 
CITIZENS AGAINST TRAVEL TO LEBANON.  U.S. PASSPORTS 
ARE NOT VALID FOR TRAVEL IN, TO, OR THROUGH LEBANON 
UNLESS SPECIAL VALIDATION HAS BEEN OBTAINED FROM THE 
DEPARTMENT OF STATE. 
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B.  BILATERAL INVESTMENT AGREEMENTS 
 
LEBANON HAS BILATERAL COMMERCIAL AGREEMENTS WITH A 
NUMBER OF COUNTRIES, BUT DOES NOT HAVE BILATERAL 
INVESTMENT TREATIES PER SE.  IN 1977, LEBANON AND THE 
EUROPEAN UNION SIGNED A COOPERATION AGREEMENT FOR 
ECONOMIC AND SOCIAL DEVELOPMENT OF LEBANON AND A NEW 
AGREEMENT IS EXPECTED TO BE SIGNED THIS YEAR.  THIS 
COVERS COMMERCIAL EXCHANGES AND ECONOMIC AND 
TECHNICAL COOPERATION AS WELL AS FINANCIAL AID. 
WITHIN THE FRAMEWORK OF A FRATERNITY AGREEMENT SIGNED 
IN 1991, LEBANESE AND SYRIAN OFFICIALS CONCLUDED FOUR 
BILATERAL AGREEMENTS IN SEPTEMBER 1993:  ECONOMIC AND 
SOCIAL, TRANSPORT, AND AGRICULTURE AND HEALTH.  SINCE 
THE ADVENT OF THE HARIRI GOVERNMENT, SEVERAL ARAB AND 
OTHER FOREIGN DELEGATIONS HAVE VISITED LEBANON TO 
DISCUSS ECONOMIC AND COMMERCIAL COOPERATION. 
 
C.  OPIC AND OTHER INVESMENT INSURANCE PROGRAMS 
 
ON FEBRUARY 10, 1981, AN OPIC AGREEMENT WAS SIGNED IN 
BEIRUT BY THE LEBANESE AND AMERICAN GOVERNMENTS, 
ALTHOUGH NO INVESTMENT USING THE OPIC INSURANCE 
COVERAGE HAS BEEN UNDERTAKEN.  IN 1977, THE GOL 
ESTABLISHED THE NATIONAL INVESTMENT GUARANTEE 
CORPORATION (NIGC) TO INSURE NEW INVESTMENTS AGAINST 
POLITICAL AND WAR RISKS, RIOTS, LOSSES DUE TO 
NON-CONVERTIBILITY OF CURRENCIES AND TRANSFER OF 
PROFITS.  THE NIGC HAS AN AGREEMENT WITH THE 
INTER-ARAB INVESTMENT GUARANTEE AGENCY (INCLUDING 21 
ARAB MEMBER COUNTRIES) TO PROVIDE INVESTMENT AND 
EXPORT COVERAGE.  LEBANON HAS JOINED THE MULTILATERAL 
INVESTMENT GUARANTEE AGENCY (MIGA). 
- 
D.  LABOR 
 
THERE ARE NO RELIABLE STATISTICS ON LEBANON'S LABOR 
FORCE.  THE TOTAL LABOR FORCE IS ESTIMATED ROUGHLY AT 
500,000 LEBANESE AND AN EQUAL OR SLIGHTLY HIGHER 
NUMBER OF SYRIANS.  LOCAL UNSKILLED LABOR IS IN SHORT 
SUPPLY.  ARAB, ASIAN, AND AFRICAN LABORERS WORK IN 
CONSTRUCTION, AGRICULTURE, INDUSTRY, AND HOUSEHOLDS. 
LEBANON HAS A FEDERATION OF LABOR UNIONS (CGTL) AND A 
FEDERATION OF SECTORAL UNIONS INCLUDING ONLY LEBANESE 
WORKERS.  THEIR ACTIONS DEAL MAINLY WITH COST-OF- 
LIVING INCREASES AND SOCIO-ECONOMIC BENEFITS. 
LABOR-MANAGEMENT RELATIONS ARE NOT ALWAYS SMOOTH, AND 
STRIKES TAKE PLACE FREQUENTLY TO PROTECT LABOR 
DEMANDS, PARTICULARLY IN THE PUBLIC SECTOR.  WAGES 
ARE RELATIVELY LOW, AND MANY BUSINESSES TEND TO BE 
LABOR INTENSIVE. 
 
E.  FOREIGN TRADE ZONES/FREE PORTS 
 
FOREIGN-OWNED FIRMS HAVE THE SAME INVESTMENT 
OPPORTUNITIES AS LOCAL FIRMS.  THE BEIRUT PORT 
MANAGEMENT IS REVIEWING LAWS RELATED TO THE DUTY-FREE 
IMPORT ZONES. 
 
F.  CAPITAL OUTFLOW POLICY 
 
LEBANON PLACES NO RESTRICTION ON THE MOVEMENT OF 
CAPITAL IN OR OUT OF THE COUNTRY, WHETHER FOR 
INVESTMENT OR OTHER PURPOSES. 
 
G.  FOREIGN DIRECT INVESTMENT STATISTICS 
 
THERE ARE NO RELIABLE STATISTICS AVAILABLE ON FOREIGN 
DIRECT INVESTMENT.  IT IS ESTIMATED THAT CONSTRUCTION 
ACCOUNTS FOR A LARGE PART OF FOREIGN INVESTMENT. 
- 
H.  MAJOR FOREIGN INVESTORS 
 
FRENCH, ITALIAN, GERMAN, BRITISH, KOREAN, AND FINNISH 
COMPANIES HAVE WON MOST OF THE GOVERNMENT CONTRACTS 
IN THE FIELDS OF ELECTRICITY, WATER, AND 
TELECOMMUNICATIONS, AND FOR THE SPORT CITY CENTER AND 
BEIRUT AIRPORT PROJECTS.  DAMES & MOORE WAS AWARDED 
THE CONSTRUCTION MANAGEMENT OF THE NORMANDY SEAFILL 
PROJECT.  "ESSO" (U.S.) SIGNED IN LATE 1994 AN 
AGREEMENT WITH LEBANESE OIL DISTRIBUTION COMPANY 
"UNITED" TO BECOME ITS EXCLUSIVE AGENT IN LEBANON. 
 
CHAPTER VIII:  TRADE AND PROJECT FINANCING 
 
BRIEF DESCRIPTION OF THE LEBANESE BANKING SYSTEM 
 
LEBANON HAS THE MOST LIBERAL BANKING REGIME IN THE 
MIDDLE EAST REGION.  BANK SECRECY IS STRICTLY 
ENFORCED AND THERE IS NO RESTRICTION ON THE MOVEMENT 
OF FOREIGN CURRENCIES OR CAPITAL.  THE NATIONAL 
INSTITUTE FOR THE GUARANTEE OF DEPOSITS INSURES UP TO 
LL FIVE MILLION OF LEBANESE AND FOREIGN CURRENCIES 
DEPOSITS IN COMMERCIAL BANKS.  THE COVERAGE OF 
FOREIGN CURRENCIES WILL EXPIRE ON DECEMBER 31, 1996. 
LEBANON HAS OVER 70 COMMERCIAL BANKS.  THE BANKING 
SECTOR WAS TO HAVE COMPLIED WITH THE BASEL SOLVENCY 
RATIO OF EIGHT PERCENT BY JUNE 15, 1995.  JP MORGAN, 
CITIBANK, COMMERZE BANK (GERMAN), AND TOKYO BANK ARE 
CONSIDERING OPENING BRANCH OR REPRESENTATIVE OFFICES 
IN BEIRUT, WHERE GULF INTERNATIONAL BANK RECENTLY 
OPENED AN OFFICE. 
 
THE FREE FOREIGN EXCHANGE MARKET IS DETERMINED BY 
SUPPLY AND DEMAND.  THERE ARE NO RESTRICTIONS IMPOSED 
ON CURRENCY CONVERSIONS AND TRANSFERS, AND NO FOREIGN 
EXCHANGE CONTROLS AFFECT TRADING.  ABOUT 60 PERCENT 
OF INTERNATIONAL TRADE IS FINANCED THROUGH LETTERS OF 
CREDIT, AND THE REMAINING 40 PERCENT THROUGH DIRECT 
TRANSFERS. 
- 
EXPORT FINANCING AND INSURANCE 
 
THE EXPORT-IMPORT BANK (EXIMBANK) ON NOVEMBER 13, 
1994, RESUMED ITS FINANCING PROGRAMS IN LEBANON. 
EXIMBANK PROVIDES SHORT-, MEDIUM-, AND LONG-TERM 
FINANCING IN THE RPIVATE SECTOR, AND SHORT-, AND 
MEDIUM-TERM FINANCING IN THE PUBLIC SECTOR. 
LEBANON'S MAJOR EUROPEAN PARTNERS PROVIDE STATE 
EXPORT GUARANTEES FOR THEIR COMPANIES DOING BUSINESS 
IN LEBANON.  AMONG THESE, THE BRITISH HAVE RESUMED 
EXPORT CREDIT GUARANTEE DEPARTMENT MEDIUM-TERM 
COVERAGE WITH A CEILING OF 50 MILLION BRITISH POUNDS 
AS OF FEBRUARY 1, 1994.  THIS COVERAGE MIGHT BE 
INCREASED.  FRANCE'S COFACE (COMPAGNIE FRANCAISE POUR 
LE COMMERCE EXTERIEUR) FACILITIES ARE AVAILABLE TO 
THE PRIVATE AND PUBLIC SECTORS.  GERMANY'S HERMES IN 
1994 RAISED ITS COVERAGE TO DM 20 MILLION--THE 
CEILING BEING CONSIDERED AS A GUIDELINE. ITALY'S SACE 
PROVIDES EXPORT CREDIT GUARANTEES FOR ITALIAN TRADE 
AND FOR STUDIES AND PROJECT EXECUTION.  BELGIUM'S 
DUCROIRE PROVIDES EXPORT COVERAGE FOR THE PRIVATE 
SECTOR ON A CASE-BY-CASE BASIS UNDER RESTRICTIONS. 
LEBANON HAS SIGNED WITH THE INTER-ARAB GUARANTEE 
AGENCY AN EXPORT-GUARANTEE AGREEMENT TO PROVIDE 
COVERAGE FOR TRADE AND INVESTMENT BETWEEN LEBANON AND 
21 ARAB COUNTRIES. 
 
PROJECT FINANCING AVAILABLE 
 
PROJECT FINANCING IN LEBANON VARIES AND IS NOT ALWAYS 
CLEARLY DEFINED.  THE GOVERNMENT HAS FOREIGN 
FINANCING COMMITMENTS FOR ITS TEN-YEAR DEVELOPMENT 
PROGRAM WORTH USD 2 BILLION FROM GRANTS AND BILATERAL 
OR MULTILATERAL LOANS FROM, AMONG OTHERS, THE SAUDI, 
KUWAITI, ITALIAN, AND FRENCH GOVERNMENTS, THE WORLD 
BANK, THE EUROPEAN INVESTMENT BANK, THE U.N. 
DEVELOPMENT PROGRAM, THE ISLAMIC DEVELOPMENT BANK, 
THE ARAB FUND FOR ECONOMIC AND SOCIAL DEVELOPMENT, 
AND THE ABU DHABI DEVELOPMENT FUND.  IN OTHER AREAS, 
THE GOVERNMENT HAS USED BOT ARRANGEMENTS.  IT 
SUCCESSFULLY LAUNCHED A USD 400 MILLION 
DOLLAR-DENOMINATED TREASURY BILL SALE THAT WAS 
MARKETED BY INTERNATIONAL FINANCIAL INSTITUTIONS, AND 
IS PREPARING FOR A SECOND ISSUANCE. 
 
LIST OF BANKS WITH U.S. CORRESPONDENTS 
 
ADCOM BANK SAL 
ALLIED BUSINESS BANK SAL 
AL-MAWARID BANK SAL 
AL-MOUGHTAREB BANK SAL 
AMERICAN EXPRESS BANK LTD 
ARAB BANK P.L.C. 
BANCA DI ROMA 
BANK AL-MADINA SAL 
BANK OF BEIRUT SAL 
BANK OF BEIRUT AND THE ARAB COUNTRIES SAL 
BANK OF KUWAIT AND THE ARAB WORLD SAL 
BANK OF LEBANON AND KUWAIT SAL 
BANQUE AUDI SAL 
  (THERE ARE BANK AUDI BRANCHES IN NEW YORK AND LOS 
  ANGELES, AND A REPRESENTATIVE OFFICE IN MIAMI) 
BANQUE BEYROUTH POUR LE COMMERCE SAL 
BANQUE DE CREDIT NATIONAL SAL 
BANQUE DE LA BEKAA SAL 
BANQUE DE LA MEDITERRANEE SAL (REPRE 
SENTATIVE OFFICE: 
  MEDITERRANEE INVESTORS GROUG-USA INC.) 
BANQUE DE L'ESSOR ECONOMIQUE LIBANAIS SAL 
BANQUE EUROPEENNE POUR LE MOYEN ORIENT 
BANQUE DE L'INDUSTRIE ET DU TRAVAIL SAL 
BANQUE DU LIBAN ET D'OUTRE-MER SAL 
BANQUE J. GEAGEA SAL 
BANQUE JOSEPH LATI ET FILS SAL 
BANQUE LIBANAISE POUR LE COMMERCE SAL 
BANQUE LIBANO-FRANCAISE SAL 
BANQUE MISR-LIBAN SAL 
BANQUE NATIONALE DE PARIS "INTERCONTINENTALE" 
BANQUE PHARAON ET CHIHA SAL 
BANQUE SARADAR SAL 
BEIRUT RIYAD BANK SAL 
THE BRITISH BANK OF THE MIDDLE EAST (U.S. BRANCH: 
  MARINE MIDLAND BANK N.A.) 
BYBLOS BANK SAL 
COMMERCIAL FACILITIES BANK SAL 
CREDIT BANCAIRE SAL 
CREDIT COMMERCIAL DU MOYEN-ORIENT SAL 
CREDIT LIBANAIS SAL 
FEDERAL BANK OF LEBANON SAL 
FRANSABANK SAL 
HABIB BANK LIMITED 
INFIBANK SAL 
INTERCONTINENTAL BANK OF LIBANON SAL 
JAMMAL TRUST BANK SAL 
LEBANESE CANADIAN BANK SAL 
LEBANESE SWISS BANK SAL 
LEBANON AND GULF BANK SAL 
LITEX BANK SAL 
METROPOLITAN BANK SAL 
NEAR EAST COMMERCIAL BANK SAL 
ORIENT CREDIT BANK SAL 
RIFBANK SAL 
SAUDI LEBANESE BANK SAL 
SAUDI NATIONAL COMMERCIAL BANK 
SOCIETE BANCAIRE DU LIBAN SAL 
SOCIETE GENERALE LIBANO-EUROPEENNE DE BANQUE SAL 
  (SOCIETE GENERALE NEW YORK) 
SOCIETE NOUVELLE DE LA BANQUE DE SYRIE ET DU LIBAN 
  SAL 
THE SYRIAN LEBANESE COMMERCIAL BANK SAL 
TRANSORIENT BANK SAL 
UNIBANK SAL 
UNITED BANK OF SAUDIA AND LEBANON SAL 
UNIVERSAL BANK SAL 
WEDGE BANK MIDDLE EAST SAL 
- 
CHAPTER IX:  BUSINESS TRAVEL 
 
WARNING:  THE U.S. DEPARTMENT OF STATE WARNS ALL U.S. 
CITIZENS AGAINST TRAVEL TO LEBANON.  THE SITUATION IN 
LEBANON IS SO DANGEROUS THAT NO U.S. CITIZEN CAN BE 
CONSIDERED SAFE FROM TERRORIST ACTS.  ARMED TERRORIST 
ORGANIZATIONS CONTINUE TO OPERATE WITHIN THE 
COUNTRY.  U.S. PASSPORTS ARE NOT VALID FOR TRAVEL IN, 
TO, OR THROUGH LEBANON UNLESS SPECIAL VALIDATION HAS 
BEEN OBTAINED FROM THE DEPARTMENT OF STATE. 
 
TRANSPORTATION:  SEVERAL INTERNATIONAL AIRLINES MAKE 
INTERMEDIATE STOPS IN BEIRUT.  U.S. CITIZENS ARE 
ADVISED NOT TO BOARD SUCH FLIGHTS BECAUSE OF THE 
DANGER OF TRANSITING LEBANON AND TO INQUIRE BEFORE 
TRAVELING IN THE REGION WHETHER A FLIGHT WILL STOP IN 
BEIRUT. 
 
VISAS ARE REQUIRED.  WITHOUT THE REQUISITE 
VALIDATION, USE OF A U.S. PASSPORT FOR TRAVEL IN, TO, 
OR THROUGH LEBANON CONSTITUTES A VIOLATION OF U.S. 
LAW. 
 
LOCAL HOLIDAYS:  NEW YEARS (JAN. 1); ST. MARON'S DAY 
(FEB. 9); FEAST OF RAMADAN (VARIABLE); GOOD FRIDAY 
WESTERN RITE (VARIABLE); LABOR DAY (MAY 1); EASTERN 
ORTHODOX GOOD FRIDAY (VARIABLE); MARTYR'S DAY (MAY 
6); FEAST OF AL-ADHA (VARIABLE); ASHURA (VARIABLE); 
MOSLEM NEW YEAR (VARIABLE); ASSUMPTION DAY (AUG. 15); 
PROPHET'S BIRTHDAY (VARIABLE); ALL SAINT'S DAY (NOV. 
1); INDEPENDENCE DAY (NOV. 22); AND CHRISTMAS DAY 
(DEC. 25). 
 
LEBANON IS TWO HOURS AHEAD OF GMT IN WINTER AND THREE 
HOURS AHEAD IN SUMMER. 
 
LEBANON USES THE METRIC SYSTEM OF WEIGHTS AND 
MEASURES, AND THE MONETARY UNIT IS THE LEBANESE 
POUND.  THERE ARE NO EXCHANGE CONTROLS, AND U.S. 
DOLLARS CIRCULATE FREELY. 
- 
COMMUNICATIONS:  INTERNATIONAL CALLS ARE POSSIBLE. 
THE DOMESTIC PUBLIC NETWORK WAS DAMAGED DURING THE 
CIVIL WAR AND IS NOT ENTIRELY RELIABLE BUT IS BEING 
REPAIRED.  VARIOUS PRIVATE CELLULAR TELEPHONE AND FAX 
FACILITIES EXIST.  COURIER SERVICES ARE SOMETIMES 
USED TO AVOID POOR-QUALITY FAXES. 
 
HEALTH:  BASIC MEDICINES ARE WIDELY AVAILABLE. 
PRIVATE HOSPITALS IN BEIRUT AND SURROUNDING AREAS 
PROVIDE MODERN CARE.  DOCTORS AND HOSPITALS OFTEN 
EXPECT IMMEDIATE CASH PAYMENT FOR SERVICES IF HEALTH 
INSURANCE IS NOT AVAILABLE. 
 
CHAPTER X: APPENDICES 
 
APPENDIX A 
 
POPULATION:  THE POPULATION OF LEBANON IS ESTIMATED 
BY THE UNDP AT AROUND 3 MILLION, EXCLUDING 
PALESTINIANS AND FOREIGN LABOR. 
 
RELIGION: LEBANON HAS A MULTI-RELIGIOUS SOCIETY 
DOMINATED BY MUSLIM AND CHRISTIAN SECTS, SEVENTEEN OF 
WHICH ARE OFFICIALLY RECOGNIZED. 
 
LANGUAGES:  ARABIC IS THE OFFICIAL LANGUAGE, AND 
FRENCH, ENGLISH, AND ARMENIAN ARE WIDELY SPOKEN. 
 
WORK WEEK:  GOVERNMENT OFFICES HOURS:  8:00-14:00 
MONDAY THROUGH THURSDAY, 08:00-14:00 ON FRIDAY, AND 
8:00-13:00 ON SATURDAY.  BANKING HOURS:  MON-FRI 8:00 
AM TO 12:30 PM; SAT 8:00 AM TO 12:00 NOON.  PRIVATE 
OFFICE HOURS VARY. 
 
APPENDIX B 
 
GDP: THERE ARE NO ACCURATE NATIONAL STATISTICS.  GDP 
IS ESTIMATED TO HAVE REACHED USD 2.169 BILLION IN THE 
FIRST QUARTER OF 1995, REFLECTING A 22 PERCENT 
INCREASE OVER THE CORRESPONDING PERIOD IN 1994. 
HOWEVER, THE REAL GDP GROWTH RATE HAS BEEN PEGGED AT 
FIVE PERCENT, FOLLOWING RATES 8.5 PERCENT IN 1994 AND 
TEN PERCENT IN 1993.  DESPITE THE MAINTAINING OF 
PRIVATE AND PUBLIC INVESTMENT, A FALL IN CONSUMPTION 
HAS LED TO A SLIGHT CONTRACTION OF THE DOMESTIC 
DEMAND AND OF GDP. 
 
INFLATION: INFLATION REACHED THREE PERCENT FOR THE 
PERIOD DECEMBER 1994 TO MARCH 1995 FOR 
DOLLAR-DENOMINATED GOODS, A CONSIDERABLE DROP FROM 
THE 1994 RATE OF 16.4 PERCENT.  POLITICAL UNCERTAINTY 
ABOUT THE UPCOMING PRESIDENTIAL ELECTION HAS BEEN 
FINGERED AS POSSIBLY RESPONSIBLE FOR THE SLOWDOWN IN 
EARLY 1995. 
 
EXCHANGE RESERVES: THE LEBANESE POUND (LL) 
STRENGTHENED 1.6 PERCENT, CLOSING AT LL 1621 TO THE 
DOLLAR AT THE END OF JUNE 1995.  CBL FOREIGN RESERVES 
DROPPED BY 21.1 PERCENT TO ABOUT USD 3 BILLION 
MID-JUNE 1995 AS A RESULT OF GOVERNMENT ADVANCES TO 
FINANCE THE REHABILITATION OF THE INFRASTRUCTURE AND 
CBL INTERVENTION TO SUPPORT THE NATIONAL CURRENCY. 
THE CBL HAS ALSO RAISED ITS INTEREST RATES SEVERAL 
TIMES SINCE DECEMBER 1994 TO ALLEVIATE PRESSURE ON 
THE LL. 
 
THE GOVERNMENT WANTS TO SHORE UP ITS FINANCES TO 
FOSTER INVESTOR CONFIDENCE, TO PROVIDE PRODUCTIVE 
SECTORS THE CAPACITY TO BECOME MORE COMPETITIVE IN 
INTERNATIONAL MARKETS, AND TO CREATE EMPLOYMENT 
OPPORTUNITIES.  THE STATE DEFICIT IN THE FIRST 
QUARTER OF 1995 REACHED LL 575 BILLION.  STATE 
EXPENDITURES AMOUNTED TO LL 1230 BILLION, OF WHICH 
LL 450 BILLION WENT TOWARD SERVICING THE DEBT (36.6 
PERCENT).  REVENUES REACHED LL 655 BILLION, OF WHICH 
LL 233.4 BILLION WERE CUSTOMS REVENUES (35.6 
PERCENT).  THE RATIO OF DEFICIT TO EXPENDITURES STOOD 
AT 46.7 PERCENT, COMPARED TO 51.8 PERCENT IN THE 
FIRST QUARTER OF 1994.  THE GOVERNMENT SEEKS TO REACH 
A RATIO OF 43 PERCENT. 
- 
DEBT: THE NET INTERNAL PUBLIC DEBT ROSE BY 7.4 
PERCENT FROM LL 6.7 BILLION TO LL 7.2 BILLION. 
LEBANON'S EXTERNAL DEBT ROSE FROM USD 772 MILLION END 
DECEMBER 1994 TO ABOUT USD 800 MILLION OVER THE FIRST 
QUARTER OF 1995. 
 
THE GOVERNMENT INITIALLY HAD ENVISAGED A USD 12 
BILLION, TEN-YEAR PROGRAM (1993-2002), FOR RECOVERY 
AND BALANCED DEVELOPMENT KNOWN AS "HORIZON 2000." 
ACCORDING TO THE COUNCIL FOR DEVELOPMENT AND 
RECONSTRUCTION (CDR), THE GOVERNMENT'S EXECUTIVE BODY 
FOR REBUILDING, IT CURRENTLY HAS 470 CONTRACTS UNDER 
SUPERVISION WITH A TOTAL VALUE OF USD 1.9 BILLION. 
FOREIGN SOURCES OF FUNDS ATTAINED USD 2 BILLION. 
ADDITIONAL LOAN AGREEMENTS ARE CURRENTLY UNDER 
DISCUSSION FOR THE FINANCING OF NEW PROJECTS TO BE 
EXECUTED IN 1995.  ACCORDING TO CDR, TOTAL 
RECONSTURCTION PROJECTS TO BE INITIATED IN 1995 WILL 
REACH USD 3.5 BILLION, THUS RAISING THE TOTAL 
PROJECTS IN THE EXECUTION OR PREPARATION PHASES OVER 
THE YEARS 1994-95 TO AROUND USD 6 BILLION.  BY JULY 
1995 THE CDR REPORTEDLY HAD RESHAPED ITS RECOVERY 
PROGRAM TO COVER 13 YEARS (1995-2007) CALLING FOR 
PUBLIC INVESTMENTS WORTH USD 17 BILLION AND PRIVATE 
INVESTMENTS OF USD 40 BILLION. 
 
LEBANON CONTINUES TO CLIMB IN THE COUNTRY RISK 
RANKINGS PUBLISHED BY EUROMONEY, RISING TO THE 64TH 
POSITION IN MARCH 1995; IT HAD BEEN RATED 67TH IN 
SEPTEMBER 1994 AND 113TH A YEAR EARLIER. 
 
THE ECONOMIC OUTLOOK FOR 1995 LOOKS POSITIVE PROVIDED 
LEBANON BENEFITS FROM POLITICAL STABILITY.  THE 
GOVERNMENT NEEDS TO IMPROVE ITS PUBLIC FINANCES IN 
ORDER TO STIMULATE SUSTAINED RATE OF GROWTH. 
- 
APPENDIX C: 
 
TRADE: 
 
ACCORDING TO OFFICIAL STATISTICS, TOTAL COUNTRY 
EXPORTS ARE PROJECTED TO REACH USD 1.48 BILLION IN 
1995 AND USD 1.72 BILLION IN 1996, WHILE TOTAL 
IMPORTS ARE EXPECTED TO REACH USD 7.99 BILLION IN 
1995 AND USD 9.39 BILLION IN 1996. 
 
APPENDIX D: 
 
INVESTMENT STATISTICS:  NOT AVAILABLE 
 
APPENDIX E: 
 
U.S. AND COUNTRY CONTACTS: 
 
BEIRUT CHAMBER OF COMMERCE AND INDUSTRY 
ADNAN KASSAR, PRESIDENT 
BEIRUT CHAMBER OF COMMERCE AND INDUSTRY BLDG. 
SANAYEH 
TEL: 01-353390 
FAX: 01-865802, 01-602050 
 
LEBANESE AMERICAN BUSINESS ASSOCIATION (LABA) 
SALIM ZEENNI, PRESIDENT 
370 GOURAUD STR., GEMMAYZEH 
TEL: 01-581789, 01-602849 
FAX (NY NUMBER): 1-212-478-1809 
 
LEBANESE INDUSTRIALISTS' ASSOCIATION 
JACQUES SARRAF, PRESIDENT 
CHAMBER OF COMMERCE AND INDUSTRY BLDG. 
SANAYEH 
TEL: 01-350280 
FAX: 01-351167 
- 
LEBANESE BANKERS ASSOCIATION 
DR. FRANCOIS BASILE, PRESIDENT 
DORA HIGHWAY, MOUCARRY CENTER, 4TH FLOOR 
TEL/FAX: 01-582346, 01-582290/6 
 
LEBANESE MERCHANTS' ASSOCIATION 
NADIM ASSI, PRESIDENT 
CHAMBER OF COMMERCE AND INDUSTRY BLDG. 
SANAYEH 
TEL: 01-345735 
 
LEBANESE BUSINESSMEN ASSOCIATION 
ROGER NASNAS, PRESIDENT 
INDEPENDENCE ST., SARRAF BLDG. 
TEL/FAX: 01-200794, 01-332277 
 
MARKET RESEARCH FIRMS: 
 
ETUDES ET CONSULTATIONS ECONOMIQUES 
DR. SAMIR NASR, DIRECTOR 
GHANDOUR AS-SAAD ST., MOUBAYED BLDG. 
ASHRAFIEH 
TEL: 01-337351, 01-328133 
FAX: 01-602693 
 
CENTRE DE RECHERCHES ET D'ETUDES AGRICOLES LIBANAIS 
DR. RIAD SAADEH, DIRECTOR 
NEW JDEIDET ST. 
JDEIDET AL-MATN 
TEL/FAX: 01-899433, 01-601574 
 
APPENDIX F: 
 
TRADE EVENT SCHEDULE:  NO U.S.-SPONSORED EVENTS ARE PLANNED.