Holding companies in Lebanon are governed by the Decree-Law No. 45 from 1983 and its amendments. Holding companies in this country are joint-stock companies which are ruled by the same regulations applied to local joint-stock entities. However, there are certain exceptions related to their purpose, which is limited by the legislation, and their tax treatment. In this article, our company formation agents in Lebanon explain different aspects related to the Lebanese holding companies.
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Activities of holding companies in Lebanon
According to the local legislation, holding companies in Lebanon can have one of the following specific activities:
• Share acquisition in an existing joint-stock or limited liability company, be it local or foreign, or participating in their incorporation;
• Managing companies in which they own shares;
• Buying intellectual rights, such as patents, licenses and trademarks;
• Buying movable and real estate properties required by their activities;
• Granting loans to their affiliates and granting them guarantees to third parties. There are certain exceptions, though. Our Lebanon company formation consultants can offer all the necessary information related to these exceptions. We can also help entrepreneurs who are interested to open a company in Lebanon.
A holding company in Lebanon cannot directly own more than 40% of the capital in more than 2 companies which activate in the same field in the country. This restriction does not apply to investments abroad.
These companies can have their capital, accounts and balance sheets declared in foreign currency.
Tax system for holding companies in Lebanon
Holding companies in Lebanon profit from a special tax system which is put in place to attract foreign investors and to confer a structure which is profitable tax-wise, however, not being tax exempt.
This special tax system consists of:
• Profits of a holding company in Lebanon are exempt from the income taxation;
• The dividends distributed are exempt from the tax on movable capital;
• Interests derived from loans granted to local subsidiaries are taxed at 5%, if their maturity is less than three years;
• Other tax benefits: our company registration advisors in Lebanon can provide more details on what these other tax benefits for holding companies consist of.
If you have more questions about the holding companies regulations in Lebanon, or for assistance in setting up offshore companies in Lebanon, please speak to our friendly staff.