Lebanon - Doing BusinessLebanon Region Middle East & North Africa Income Category Upper middle income Population 6,848,925 City Covered Beirut 143 DB RANK DB SCORE 54.3 Rankings on

Economy Profile

Lebanon

LebanonDoing Business 2020

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Economy Profile of Lebanon

Doing Business 2020 Indicators(in order of appearance in the document)

Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company

Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safetymechanisms in the construction permitting system

Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and thetransparency of tariffs

Registering property Procedures, time and cost to transfer a property and the quality of the land administration system

Getting credit Movable collateral laws and credit information systems

Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance

Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as postfilingprocesses

Trading across borders Time and cost to export the product of comparative advantage and import auto parts

Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes

Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework forinsolvency

Employing workers Flexibility in employment regulation and redundancy cost


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About Doing Business

The project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational andregional level.

Doing Business

The project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their lifecycle.

Doing Business

captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation forstarting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading acrossborders, enforcing contracts and resolving insolvency. also measures features of employing workers. Although does not present rankingsof economies on the employing workers indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it doespresent the data for these indicators.

Doing Business

Doing Business Doing Business

By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, encourageseconomies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sectorresearchers and others interested in the business climate of each economy.

Doing Business

In addition, offers detailed , which exhaustively cover business regulation and reform in different cities and regions within a nation.These studies provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selectedcities can compare their business regulations with other cities in the economy or region and with the 190 economies that has ranked.

Doing Business subnational studies

Doing Business

The first study, published in 2003, covered 5 indicator sets and 133 economies. This year’s study covers 11 indicator sets and 190 economies. Mostindicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013(Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where also collected datafor the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited fromfeedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving theregulatory environment for business around the world.

Doing Business

Doing Business

To learn more about please visitDoing Business doingbusiness.org


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http://www.doingbusiness.org/en/reports/subnational-reports

http://doingbusiness.org/

Ease of Doing Business in

LebanonRegion Middle East & North Africa

Income Category Upper middle income

Population 6,848,925

City Covered Beirut

143

DB RANK DB SCORE

54.3

Rankings on Doing Business topics - Lebanon

151164

127

110

132

114 116

153

131

151

Startinga

Business

Dealingwith

ConstructionPermits

GettingElectricity

RegisteringProperty

GettingCredit

ProtectingMinorityInvestors

PayingTaxes

TradingacrossBorders

EnforcingContracts

ResolvingInsolvency

Topic Scores

78.2 53.7 62.7 59.4 40.0 44.0 67.5 57.9 50.8 29.1

(rank)Starting a Business 151Score of starting a business (0-100) 78.2Procedures (number) 8Time (days) 15Cost (number) 42.3Paid-in min. capital (% of income per capita) 41.5

(rank)Dealing with Construction Permits 164Score of dealing with construction permits (0-100) 53.7Procedures (number) 22Time (days) 276Cost (% of warehouse value) 7.7Building quality control index (0-15) 14.0

(rank)Getting Electricity 127Score of getting electricity (0-100) 62.7Procedures (number) 4Time (days) 89Cost (% of income per capita) 128.0Reliability of supply and transparency of tariff index (0-8) 0

(rank)Registering Property 110Score of registering property (0-100) 59.4Procedures (number) 8Time (days) 37Cost (% of property value) 6.0Quality of the land administration index (0-30) 16.0

(rank)Getting Credit 132Score of getting credit (0-100) 40.0Strength of legal rights index (0-12) 2Depth of credit information index (0-8) 6Credit registry coverage (% of adults) 21.3Credit bureau coverage (% of adults) 0.0

(rank)Protecting Minority Investors 114Score of protecting minority investors (0-100) 44.0Extent of disclosure index (0-10) 9.0Extent of director liability index (0-10) 1.0Ease of shareholder suits index (0-10) 5.0Extent of shareholder rights index (0-6) 3.0Extent of ownership and control index (0-7) 1.0Extent of corporate transparency index (0-7) 3.0

(rank)Paying Taxes 116Score of paying taxes (0-100) 67.5Payments (number per year) 20Time (hours per year) 181Total tax and contribution rate (% of profit) 32.2Postfiling index (0-100) 27.5

(rank)Trading across Borders 153Score of trading across borders (0-100) 57.9Time to export

Documentary compliance (hours) 48Border compliance (hours) 96Cost to export

Documentary compliance (USD) 100Border compliance (USD) 480Time to export

Documentary compliance (hours) 72Border compliance (hours) 180Cost to export

Documentary compliance (USD) 135Border compliance (USD) 790

(rank)Enforcing Contracts 131Score of enforcing contracts (0-100) 50.8Time (days) 721Cost (% of claim value) 30.8Quality of judicial processes index (0-18) 6.5

(rank)Resolving Insolvency 151Score of resolving insolvency (0-100) 29.1Recovery rate (cents on the dollar) 30.8Time (years) 3.0Cost (% of estate) 15.0Outcome (0 as piecemeal sale and 1 as goingconcern)

0

Strength of insolvency framework index (0-16) 4.0


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Starting a Business

This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up andformally operate in each economy’s largest business city.

To make the data comparable across 190 economies, uses a standardized business that is 100% domestically owned, has start-up capital equivalent to10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement ofoperations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that onecompany is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting theirscores for starting a business. These scores are the simple average of the scores for each of the component indicators.

Doing Business

The most recent round of data collection for the project was completed in May 2019. .See the methodology for more information

What the indicators measure

Procedures to legally start and formally operate a company(number)

Preregistration (for example, name verification or reservation,notarization)

•

Registration in the economy’s largest business city•Postregistration (for example, social security registration,company seal)

•

Obtaining approval from spouse to start a business or to leavethe home to register the company

•

Obtaining any gender specific document for companyregistration and operation or national identification card

•

Time required to complete each procedure (calendar days)

Does not include time spent gathering information•Each procedure starts on a separate day (2 procedures cannotstart on the same day)

•

Procedures fully completed online are recorded as ½ day•Procedure is considered completed once final document isreceived

•

No prior contact with officials•Cost required to complete each procedure (% of income percapita)

Official costs only, no bribes•No professional fees unless services required by law orcommonly used in practice

•

Paid-in minimum capital (% of income per capita)

• Funds deposited in a bank or with third party before registrationor up to 3 months after incorporation

Case study assumptions

To make the data comparable across economies, several assumptions about the business and theprocedures are used. It is assumed that any required information is readily available and that theentrepreneur will pay no bribes.

The business:

-Is a limited liability company (or its legal equivalent). If there is more than one type of limitedliability company in the economy, the limited liability form most common among domestic firms ischosen. Information on the most common form is obtained from incorporation lawyers or thestatistical office.-Operates in the economy’s largest business city. For 11 economies the data are also collected forthe second largest business city.-Performs general industrial or commercial activities such as the production or sale to the public ofgoods or services. The business does not perform foreign trade activities and does not handleproducts subject to a special tax regime, for example, liquor or tobacco. It is not using heavilypolluting production processes.-Does not qualify for investment incentives or any special benefits.-Is 100% domestically owned.-Has five business owners, none of whom is a legal entity. One business owner holds 30% of thecompany shares, two owners have 20% of shares each, and two owners have 15% of shareseach.-Is managed by one local director.-Has between 10 and 50 employees one month after the commencement of operations, all of themdomestic nationals.-Has start-up capital of 10 times income per capita.-Has an estimated turnover of at least 100 times income per capita.-Leases the commercial plant or offices and is not a proprietor of real estate.-Has an annual lease for the office space equivalent to one income per capita.-Is in an office space of approximately 929 square meters (10,000 square feet).-Has a company deed that is 10 pages long.

The owners:

-Have reached the legal age of majority and are capable of making decisions as an adult. If thereis no legal age of majority, they are assumed to be 30 years old.-Are in good health and have no criminal record.-Are married, the marriage is monogamous and registered with the authorities.-Where the answer differs according to the legal system applicable to the woman or man inquestion (as may be the case in economies where there is legal plurality), the answer used will bethe one that applies to the majority of the population.


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http://www.doingbusiness.org/en/methodology/starting-a-business

Starting a Business - Lebanon

Figure – Starting a Business in Lebanon – Score

Procedures

58.8

Time

85.4

Cost

78.8

Paid-in min. capital

89.6

Figure – Starting a Business in Lebanon and comparator economies – Ranking and Score

DB 2020 Starting a Business Score

0 100

93.1: Saudi Arabia (Rank: 38)

88.8: Turkey (Rank: 77)

87.8: Egypt, Arab Rep. (Rank: 90)

84.5: Jordan (Rank: 120)

84.0: Regional Average (Middle East & North Africa)

78.2: Lebanon (Rank: 151)

Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average ofthe scores for each of the component indicators.

Standardized Company

Legal form Socièté a Responsabilité Limitée (SARL)

Paid-in minimum capital requirement LBP 5,000,000

City Covered Beirut

Indicator Lebanon Middle East &North Africa

OECD highincome

Best RegulatoryPerformance

Procedure – Men (number) 8 6.5 4.9 1 (2 Economies)

Time – Men (days) 15 19.7 9.2 0.5 (New Zealand)

Cost – Men (% of income per capita) 42.3 16.7 3.0 0.0 (2 Economies)

Procedure – Women (number) 8 7.1 4.9 1 (2 Economies)

Time – Women (days) 15 20.3 9.2 0.5 (New Zealand)

Cost – Women (% of income per capita) 42.3 16.7 3.0 0.0 (2 Economies)

Paid-in min. capital (% of income per capita) 41.5 8.9 7.6 0.0 (120 Economies)


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Figure – Starting a Business in Lebanon – Procedure, Time and Cost

This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.*

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows thetime for women. For more information on methodology, see the website ( ). For details on the proceduresreflected here, see the summary below.

Doing Business http://doingbusiness.org/en/methodology

Procedures (number)1 2 3 4 5 6 * 7 * 8

0

2

4

6

8

10

12

14

Tim

e (d

ays)

0

5

10

15

20

25

30

Cost

(% o

f inc

ome

per c

apita

)

Time (days) Cost (% of income per capita)


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https://doingbusiness.org/en/methodology

Details – Starting a Business in Lebanon – Procedure, Time and Cost

No. Procedures Time to Complete Associated Costs

1 Designate a Lebanese lawyer: LawyerAgency

Each newly formed company must retain and pay an attorney on an annual basis. On April 262012, the Beirut Bar Association increased the minimum annual retainer to LBP 9,000,000effective as of January 2013. This retainer can be paid by the company during the year. Startupfees are set by the Beirut Bar Association at LBP 3,000,000.

1 day LBP 3,000,000 (attorneystartup fees) + LBP150,000 (Legalization ofthe Power of Attorneybefore the BarAssociation)

2 Deposit the capital in a bank: BankAgency

This procedure can be carried out on the basis of a signed and notarized copy of the articles ofassociation.

2 days no charge

3 Register at the Company Registry: Commercial RegisterAgency

The applicant submits the following documents to the company registrar at the Commercial Court,along with the total amount of required fees:• Articles of association• Commercial circulars• Minutes of the first general meeting of the partners• Registration application and a draft of the registration certificate to be issued• Document attesting the capital deposit• Partners’ identity cards or passports (copy)• Documents evidencing that the company is entitled to occupy the premises where it exercises itsactivities

Fee schedule for company registration:• Tax for the magistrates’ mutual fund: LBP 375,000 lump tax + 0.15% of the capital+ LBP 1,000flat registration fee + LBP 500 application fee + LBP 1,000 certified copy + LBP 500 commercialpublication fee• Stamp duty: equal to 0.4% of capital + LBP 750,000 lump sum stamp duty + LBP 2,000 flatregistration fee + LBP 1,000 application fee + LBP 2,000 certified copy + enrollment fee(Qaydeyia) LBP 250+ LBP 1,000 commercial publication fee

If the Bylaws are not signed before the Commercial Registry, additional fees are levied as follows:• Notarization of the articles of association: LBP 8,500 for each page.• Notarization fee: LBP 100,000 lump sum.• Notary public tax: 0.1% of capital.

2 days see comments

4 Notify the Ministry of Finance of commencement of business operations: Ministry of FinanceAgency

Within 2 months of registration, the company must submit a notification of commencement ofbusiness activities to the Ministry of Finance in order to register for income tax and VAT.

2 days no charge

5 Register at the National Social Security Fund (NSSF): National Social Security FundAgency

This procedure has two functions: “Registration” of a new employee and “Confirmation” by thesystem.

The “Registration” function entails submitting a file for each new employee at the NSSF regionaloffice closest to the company premises and obtaining a file reference number (or a receiptacknowledging the registration) immediately upon the submission. Once this “Registration”function is completed, the business is considered to have fulfilled its legal obligations with theNSSF. The benefits to the newly registered employees, under NSSF rules, will also becomeimmediately effective. The Time to complete this procedure is 1 day at no cost to the employer orthe employee.

The “Confirmation” function consists of issuing a hard copy document (printed on a special sizesheet) in the name of the registered employee along with his/her unique NSSF ID. Due to the lackof printing equipment at NSSF, the confirmation documents are printed in batches every few daysor so. Therefore, it could take up to 30 days for a confirmation sheet to be received by the newlyregistered employee.

1 day no charge

6 File internal labor regulations (règlement intérieur) with the Ministry of Labor: Ministry of LaborAgency

When the number of employees at a company reaches 15 then the company will have to fileinternal labor regulations (règlement intérieur) with the Ministry of Labor according to Art. 66 of theLabor Code.

1 day no charge

7 Register for VAT: VAT DepartmentAgency

Registration for VAT is done at the VAT Department. To obtain a VAT certificate of registration, itmay take between 7 and 10 days. There are specific forms to fill out for each kind of registration.The VAT department is independent from the taxes’ department. The registration in bothdepartments is free of charge.

one week (simultaneouswith previous procedure)

no charge


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Takes place simultaneously with previous procedure.

8 Obtain a company seal: Seal makerAgency

Although not mandated by law, the majority of companies prefer to have company stamps.they can be order at any seal-making company.

1 day (simultaneous withprevious procedure)

LBP 20,000-35,000


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Dealing with Construction Permits

This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications,requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the buildingquality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professionalcertification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information


Procedures to legally build a warehouse (number)

Submitting all relevant documents and obtaining all necessaryclearances, licenses, permits and certificates

•

Submitting all required notifications and receiving all necessaryinspections

•

Obtaining utility connections for water and sewerage•Registering and selling the warehouse after its completion•


Does not include time spent gathering information•Each procedure starts on a separate day—though proceduresthat can be fully completed online are an exception to this rule

•

Procedure is considered completed once final document isreceived

•

No prior contact with officials•Cost required to complete each procedure (% of income percapita)

Official costs only, no bribes•Building quality control index (0-15)

Quality of building regulations (0-2)•Quality control before construction (0-1)•Quality control during construction (0-3)•Quality control after construction (0-3)•Liability and insurance regimes (0-2)•Professional certifications (0-4)•


To make the data comparable across economies, several assumptions about the constructioncompany, the warehouse project and the utility connections are used.

The construction company (BuildCo):

- Is a limited liability company (or its legal equivalent) and operates in the economy’s largestbusiness city. For 11 economies the data are also collected for the second largest business city.- Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has alicensed architect and a licensed engineer, both registered with the local association of architectsor engineers. BuildCo is not assumed to have any other employees who are technical or licensedexperts, such as geological or topographical experts.- Owns the land on which the warehouse will be built and will sell the warehouse upon itscompletion.

The warehouse:

- Will be used for general storage activities, such as storage of books or stationery.- Will have two stories, both above ground, with a total constructed area of approximately 1,300.6square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will belocated on a land plot of approximately 929 square meters (10,000 square feet) that is 100%owned by BuildCo, and the warehouse is valued at 50 times income per capita.- Will have complete architectural and technical plans prepared by a licensed architect. Ifpreparation of the plans requires such steps as obtaining further documentation or getting priorapprovals from external agencies, these are counted as procedures.- Will take 30 weeks to construct (excluding all delays due to administrative and regulatoryrequirements).

The water and sewerage connections:

- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no waterdelivery infrastructure in the economy, a borehole will be dug. If there is no sewerageinfrastructure, a septic tank in the smallest size available will be installed or built.- Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flowof 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day anda peak wastewater flow of 1,136 liters (300 gallons) a day.- Will have a constant level of water demand and wastewater flow throughout the year; will be 1inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.


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http://www.doingbusiness.org/en/methodology/dealing-with-construction-permits

Dealing with Construction Permits - Lebanon

Figure – Dealing with Construction Permits in Lebanon – Score

Procedures

32.0

Time

28.0

Cost

61.6

Building quality control index

93.3

Figure – Dealing with Construction Permits in Lebanon and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

0 100







Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scoresare the simple average of the scores for each of the component indicators.

Standardized Warehouse

Estimated value of warehouse LBP 601,912,194.30

City Covered Beirut


OECD highincome


Procedures (number) 22 15.7 12.7 None in 2018/19

Time (days) 276 123.6 152.3 None in 2018/19

Cost (% of warehouse value) 7.7 4.4 1.5 None in 2018/19

Building quality control index (0-15) 14.0 12.5 11.6 15.0 (6 Economies)


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Figure – Dealing with Construction Permits in Lebanon – Procedure, Time and Cost




Procedures (number)1 * 2 * 3 4 5 * 6 7 8 9 10 11 12 13 * 14 15 16 17 18 * 19 * 20 21 22

0

50

100

150

200

250

Tim

e (d

ays)

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0.5

1

1.5

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2.5

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(% o

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Figure – Dealing with Construction Permits in Lebanon and comparator economies – Measure of Quality

Lebanon Egypt,ArabRep.

Jordan SaudiArabia

Turkey MiddleEast

&NorthAfrica

02468

10121416

Inde

x sc

ore

14.0 14.011.0 12.0 13.0 12.5

Details – Dealing with Construction Permits in Lebanon – Procedure, Time and Cost


1 Obtain a geotechnical study / soil test: Geotechnical engineerAgency

BuildCo will request a soil test for the structural calculations for the foundation. This test ismandated by law according to article 18(3) of construction law no. 646/2004

15 days USD 3,000

2 Obtain a recent planning certificate: Directorate General of Urban Planning (DGU)Agency

BuildCo must submit a recent planning certificate (they are usually valid for 3 months) among thenecessary documents to request a building permit. BuildCo must have a receipt from themunicipality and should pay the value of the stamps for this procedure.

10 days LBP 24,600

3 Obtain a topographic study: Topographic engineerAgency

BuildCo needs to obtain a topographic study at the beginning of the construction in order to haveaccurate details about the levels and limitations of the land plot. This study is required for theconstruction permit application.

7 days USD 500

4 Hire a technical auditor and obtain approval of drawings: Technical AuditorAgency

Based on Decision No. 1/1192 dated November 23, 2012 read in conjunction with Decreeno.7964/2012, companies must hire a technical auditor accredited by the government who mustreview and approve the drawings related to the project before the building permit can be issued.They may request that modifications be made to the drawings. Throughout the constructionphase, the auditors must also ensure that construction works are duly performed throughinspections at different stages of the construction. And upon completion of the works, they mustattest that the construction work was carried out properly.

3 days USD 5,000

5 Request and receive inspection from Électricité du Liban for approval: Électricité du Liban (Electricity of Lebanon – EDL) also need to go to the EDL to make

sure you have the electrical post or a transformer first, you must go to municipality to obtain adocument that shows the parcel’s value as they will need this to issue the approval, then you mustgo to the Electricity company to see if Electricite du Liban will be able to supply electricity

Agency

Before submitting the building permit application, Electricité du Liban has to verify if theconstruction site can be connected to an electrical post or transformer.

15 days no charge

6 Obtain approval of file by Order of Engineers (where engineer is registered) and pay dutiesto Order

: Beirut Order of EngineersAgencyThe file must be submitted to the Order of Engineers. The file should include the following:• A construction permit application signed by that same civil engineer or architect jointly with thereal estate owner,• The design plans,• An agreement between the property owner and the architect or engineer responsible for theproject described.

In order to be submitted as part of the application for a building permit, the file must bear the sealand registration number of the relevant Order of Engineers. The Order of Engineers meets twice aweek.

4 days LBP 1,950,900

7 Submit building permit application to Urban Development Department: Urban Development Department, Directorat Général d'Urbanisme (DGU)Agency

BuildCo must submit the file described in the previous procedure to the Urban DevelopmentDepartment. The file is referred to the municipal engineering departments. The UrbanDevelopment Department is a subdivision of the Directorate General of Urbanism.

1 day no charge


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8 Request and receive pre–approval inspection from Urban Development Department: Urban Development Department, Directorat Général d'Urbanisme (DGU)Agency

The Urban Development Department inspects the property and the plans to ensure that they areconsistent with the construction laws and regulations, and then issues its clearance for theissuance of the building permit and calculates the building permit taxes. The inspection itself iscompleted in a day, but it takes a while from the date BuildCo requests the inspection until thedate the inspector arrives.

40 days no charge

9 Pay building permit taxes to the municipality: MunicipalityAgency

The Urban Development Department refers the file to the relevant municipality (in the case of thecity of Beirut, to the Administrator of the City of Beirut). The municipality collects the constructionpermit taxes and issues the construction permit in the name of the property owner. Payment ismade at the municipality.

1 day LBP 9,748,390

10 Obtain building permit: MunicipalityAgency

The average delay to obtain the building permit is 4 months.As per Section II of article 4 of Construction law (646/2004), approval or rejection must be givenwithin no later than 6 months. Failure to issue approval or rejection within the above time limit, theconcerned person has the right to present, within a 6 months' time period, a letter to the relevantagency, considering himself having been granted implicitly the permit.

120 days no charge

11 Obtain starting order permit from Order of Engineers: Beirut Order of EngineersAgency

To start construction the engineer and/or architect must pay the dossier fee according to thenumber of professionals involved in the construction work (civil engineer, mechanic engineer,electrical engineer, geotechnical engineer, among others).

3 days LBP 200,000

12 Submit permit from Order of Engineers to the police: PoliceAgency

While this is not a requirement by law, in practice engineers submit a copy of the building permit tothe police, informing them of the start of construction work.

1 day no charge

13 Request and receive inspection from the Water of Beirut and Mount Lebanon for waterconnection

: Water of Beirut and Mount LebanonAgencyThe Water of Beirut and Mount Lebanon agency will conduct an inspection for water connection

10 days no charge

14Request and receive inspection from the Municipality of Beirut for sewage

: Municipality of BeirutAgencyWhile the inspection for water connection is done by the Water of Beirut and Mount Lebanonagency, the inspection for sewage connection is done by the Municipality of Beirut. Bothinspections can be done simultaneously.

10 days no charge

15 Submit application and receive approval for an occupancy permit from the Order ofEngineers

: Beirut Order of EngineersAgencyFollowing completion of construction, an application for approval of an occupancy permit must besubmitted to the Order of Engineers. .

4 days LBP 300,000

16 Submit application for an occupancy permit from the Directorate General of UrbanPlanning (DGU)

: Urban Development Department, Directorate General of Urban Planning (DGU)AgencyOnce construction has been completed, an application for approval of an occupancy permit mustbe submitted to the Urban Development Department. The Urban Development Departmentperforms an on-site inspection of the building to ensure that it is in compliance with theconstruction permit and approved plans.

The application for an occupancy permit must be accompanied by the plans related to thecompleted construction, signed by the engineer in charge, and stamped by the Order ofEngineers. Following the clearance from the Urban Development Department, the file is forwardedto the relevant municipality (in the case of Beirut, to the Administrator of the City of Beirut) that willissue the occupancy permit in the name of the property owner.

1 day no charge

17 Receive on-site inspection from the Directorate General of Urban Planning (DGU): Urban Development Department, Directorate General of Urban Planning (DGU)Agency

After submitting the application of occupancy permit, the Directorate General of Urban Planning(DGU) will conduct a site inspection

1 day no charge

18 Obtain occupancy permit: Urban Development Department, Directorate General of Urban Planning (DGU)Agency

By law, the time limit for the procedure is 30 days, but in practice, it takes longer to obtain theoccupancy permit

45 days LBP 25,000

19Obtain water connection

: Water of Beirut and Mount LebanonAgencyBuildCo submits an application and obtains water connection.

14 days LBP 2,260,000


Page 14


20Obtain sewage connection

: MunicipalityAgencyBuildCo submits an application and obtains the sewage connection

14 days USD 7,500

21 Receive onsite inspection from the Ministry of Finance and obtain estimate of leasing valueof the warehouse

: Ministry of FinanceAgencyOnce the occupancy permit is issued, an inspector from the Ministry of Finance visits the site toprepare an estimate of the leasing value of the warehouse. This estimate is necessary to registerthe building.

1 day LBP 5,000

22 Register the building with the Real Estate Registry: Real Estate RegistryAgency

BuildCo must register the buildiong with the Real Estate Registry. The fees will depend on theestimate of the building's leasing value prepared by the inspector from the Ministry of Finance.

14 days LBP 6,687,578


Page 15

Details – Dealing with Construction Permits in Lebanon – Measure of Quality

Answer Score

Building quality control index (0-15) 14.0

Quality of building regulations index (0-2) 2.0

How accessible are building laws and regulations in your economy? (0-1) Available online; Freeof charge.

1.0

Which requirements for obtaining a building permit are clearly specified in the building regulations or on anyaccessible website, brochure or pamphlet? (0-1)

List of requireddocuments; Fees tobe paid; Requiredpreapprovals.

1.0

Quality control before construction index (0-1) 1.0

Which third-party entities are required by law to verify that the building plans are in compliance with existingbuilding regulations? (0-1)

Licensed architect;Licensed engineer;Private firm.

1.0

Quality control during construction index (0-3) 2.0

What types of inspections (if any) are required by law to be carried out during construction? (0-2) Inspections byexternal engineer orfirm; Unscheduledinspections;Inspections at variousphases.

1.0

Do legally mandated inspections occur in practice during construction? (0-1) Mandatoryinspections arealways done inpractice.

1.0

Quality control after construction index (0-3) 3.0

Is there a final inspection required by law to verify that the building was built in accordance with the approvedplans and regulations? (0-2)

Yes, final inspectionis done bygovernment agency;Yes, externalengineer submitsreport for finalinspection.

2.0

Do legally mandated final inspections occur in practice? (0-1) Final inspectionalways occurs inpractice.

1.0

Liability and insurance regimes index (0-2) 2.0

Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use(Latent Defect Liability or Decennial Liability)? (0-1)

Architect or engineer;Professional incharge of thesupervision;Constructioncompany; Owner orinvestor.

1.0

Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws orproblems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1)

No party is requiredby law to obtaininsurance ; Owner orinvestor; Insurance iscommonly taken inpractice.

1.0

Professional certifications index (0-4) 4.0

What are the qualification requirements for the professional responsible for verifying that the architectural plansor drawings are in compliance with existing building regulations? (0-2)

Minimum number ofyears of experience;University degree inarchitecture orengineering; Being aregistered architect orengineer.

2.0


Page 16

What are the qualification requirements for the professional who supervises the construction on the ground? (0-2)

Minimum number ofyears of experience;University degree inengineering,construction orconstructionmanagement; Beinga registered architector engineer.

2.0


Page 17

Getting Electricity

This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally,the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of datacollection for the project was completed in May 2019. .See the methodology for more information


Procedures to obtain an electricity connection (number)

Submitting all relevant documents and obtaining all necessaryclearances and permits

•

Completing all required notifications and receiving all necessaryinspections

•

Obtaining external installation works and possibly purchasingmaterial for these works

•

Concluding any necessary supply contract and obtaining finalsupply

•


Is at least 1 calendar day•Each procedure starts on a separate day•Does not include time spent gathering information•Reflects the time spent in practice, with little follow-up and noprior contact with officials

•

Cost required to complete each procedure (% of income percapita)

Official costs only, no bribes•Value added tax excluded•

The reliability of supply and transparency of tariffs index (0-8)

Duration and frequency of power outages (0–3)•Tools to monitor power outages (0–1)•Tools to restore power supply (0–1)•Regulatory monitoring of utilities’ performance (0–1)•Financial deterrents limiting outages (0–1)•Transparency and accessibility of tariffs (0–1)•

Price of electricity (cents per kilowatt-hour)*

Price based on monthly bill for commercial warehouse in casestudy

•

*Note: measures the price of electricity, but it isnot included in the ease of doing business score nor in the rankingon the ease of getting electricity.

Doing Business


To make the data comparable across economies, several assumptions about the warehouse, theelectricity connection and the monthly consumption are used.

The warehouse:

- Is owned by a local entrepreneur and is used for storage of goods.- Is located in the economy’s largest business city. For 11 economies the data are also collected forthe second largest business city.- Is located in an area where similar warehouses are typically located and is in an area with nophysical constraints. For example, the property is not near a railway.- Is a new construction and is being connected to electricity for the first time.- Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 squarefeet). The plot of land on which it is built is 929 square meters (10,000 square feet).

The electricity connection:

- Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).- Has a length of 150 meters. The connection is to either the low- or medium-voltage distributionnetwork and is either overhead or underground, whichever is more common in the area where thewarehouse is located and requires works that involve the crossing of a 10-meter road (such as byexcavation or overhead lines) but are all carried out on public land. There is no crossing of otherowners’ private property because the warehouse has access to a road.- Does not require work to install the internal wiring of the warehouse. This has already beencompleted up to and including the customer’s service panel or switchboard and the meter base.

The monthly consumption:

- It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hoursa day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts(assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours(kWh); hourly consumption is 112 kWh.- If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.- Tariffs effective in January of the current year are used for calculation of the price of electricity forthe warehouse. Although January has 31 days, for calculation purposes only 30 days are used.


Page 18

http://www.doingbusiness.org/en/methodology/getting-electricity

Getting Electricity - Lebanon

Figure – Getting Electricity in Lebanon – Score

Procedures

83.3

Time

69.1

Cost

98.4

Reliability of supply and transparency oftariff index

0.0

Figure – Getting Electricity in Lebanon and comparator economies – Ranking and Score

DB 2020 Getting Electricity Score

0 100







Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of thescores for all the component indicators except the price of electricity.

Figure – Getting Electricity in Lebanon – Procedure, Time and Cost


Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows thetime for women. For more information on methodology, see the website ( ). For details on the proceduresDoing Business http://doingbusiness.org/en/methodology

Procedures (number)1 2 * 3 4

0

10

20

30

40

50

60

70

80

Tim

e (d

ays)

0

20

40

60

80

100

120

140

Cost

(% o

f inc

ome

per c

apita

)

Time (days) Cost (% of income per capita)

Standardized Connection

Name of utility Electricité du Liban (EDL)

Price of electricity (US cents per kWh) 13.0

City Covered Beirut


OECD highincome


Procedures (number) 4 4.4 4.4 3 (28 Economies)

Time (days) 89 63.5 74.8 18 (3 Economies)

Cost (% of income per capita) 128.0 419.6 61.0 0.0 (3 Economies)

Reliability of supply and transparency of tariff index (0-8) 0 4.4 7.4 8 (26 Economies)


Page 19


reflected here, see the summary below.

Figure – Getting Electricity in Lebanon and comparator economies – Measure of Quality


Jordan SaudiArabia

Turkey MiddleEast

&NorthAfrica

01234567

Inde

x sc

ore

0

56 6

54.4


Page 20

Details – Getting Electricity in Lebanon – Procedure, Time and Cost



1 Obtain neighbor's electricity bill (for address of closest building): NeighborAgency

The customer needs to obtain an electricity bill from their neighbor or the identification number ofthe neighbor’s meter box (showing the address of the closest building. This is needed whenapplying for electricity connection because it allows the electricity company, Electricité du Liban,locate the construction.

1 calendar day LBP 0

2 Submit application to EDL and await estimate: Electricité du Liban (EDL), BeirutAgency

The customer submits an application for electricity connection at Electricité du Liban’s offices.In addition to the application form, the client needs to submit:• copy of the title deed• copy of the ID card• the original building permit, and• electricity bill from the closest building (or meter box number) and its address

18 calendar days LBP 11,000

3 Receive external inspection by EDL: Electricité du Liban (EDL), BeirutAgency

The application is forwarded to the relevant department at the utility for review. A site inspection isusually carried out to determine the details of the connection.

The inspector then prepares a report with the specifics of the connection and awaits clearancefrom the relevant authority at the utility.

Once clearance is obtained and the inspector has prepared an estimate of the connection fees,the client will need to make the necessary payment at Electricité du Liban’s offices. The client isthen given the approved file back along with a “C23” card (with the number of connections and thetemporary meter, if needed).

1 calendar day LBP 494,050.89

4 Await and receive external works and meter installation from EDL’s service provider: Electricité du Liban (EDL), BeirutAgency

External works start after the client has paid the connection fees. For a connection of 3x200A, ifthe warehouse is less than 200 meters away from the closest distribution substation, the workswill consist of laying out an underground cable from the building to that substation. Otherwise, asubstation would be needed.

Any permits needed for the works are obtained by the utility directly. The utility picks a contractorto do the external works, and possibly install the meter and turn the electricity on too. The utilityhowever, always supervises the works.

No inspection of the entire internal wiring is done during the process.

70 calendar days LBP 14,907,000


Page 21

Details – Getting Electricity in Lebanon – Measure of Quality

Note:

If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index.

If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Answer

Reliability of supply and transparency of tariff index (0-8) 0

Total duration and frequency of outages per customer a year (0-3) 0

System average interruption duration index (SAIDI) ..

System average interruption frequency index (SAIFI) ..

What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI N/A

Mechanisms for monitoring outages (0-1) 0

Does the distribution utility use automated tools to monitor outages? No

Mechanisms for restoring service (0-1) 0

Does the distribution utility use automated tools to restore service? No

Regulatory monitoring (0-1) 0

Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? No

Financial deterrents aimed at limiting outages (0-1) 0

Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? No

Communication of tariffs and tariff changes (0-1) 1

Are effective tariffs available online? Yes

Link to the website, if available online http://www.edl.gov.lb/page.php?pid=39&lang=en

Are customers notified of a change in tariff ahead of the billing cycle? Yes


Page 22

Registering Property

This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and abuilding that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The qualityof land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal accessto property rights. The most recent round of data collection for the project was completed in May 2019. .See the methodology for more information


Procedures to legally transfer title on immovable property(number)

Preregistration procedures (for example, checking for liens,notarizing sales agreement, paying property transfer taxes)

•

Registration procedures in the economy's largest business city.•Postregistration procedures (for example, filling title withmunicipality)

•


Does not include time spent gathering information•Each procedure starts on a separate day - though proceduresthat can be fully completed online are an exception to this rule

•

Procedure is considered completed once final document isreceived

•

No prior contact with officials•Cost required to complete each procedure (% of propertyvalue)

Official costs only (such as administrative fees, duties andtaxes).

•

Value Added Tax, Capital Gains Tax and illicit payments areexcluded

•

Quality of land administration index (0-30)

Reliability of infrastructure index (0-8)•Transparency of information index (0–6)•Geographic coverage index (0–8)•Land dispute resolution index (0–8)•Equal access to property rights index (-2–0)•


To make the data comparable across economies, several assumptions about the parties to thetransaction, the property and the procedures are used.

The parties (buyer and seller):

- Are limited liability companies (or the legal equivalent).- Are located in the periurban (that is, on the outskirts of the city but still within its official limits)area of the economy’s largest business city. For 11 economies the data are also collected for thesecond largest business city.- Are 100% domestically and privately owned.- Perform general commercial activities.

The property (fully owned by the seller):

- Has a value of 50 times income per capita, which equals the sale price.- Is fully owned by the seller.- Has no mortgages attached and has been under the same ownership for the past 10 years.- Is registered in the land registry or cadastre, or both, and is free of title disputes.- Is located in a periurban commercial zone (that is, on the outskirts of the city but still within itsofficial limits), and no rezoning is required.- Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouseis 10 years old, is in good condition, has no heating system and complies with all safety standards,building codes and legal requirements. The property, consisting of land and building, will betransferred in its entirety.- Will not be subject to renovations or additional construction following the purchase.- Has no trees, natural water sources, natural reserves or historical monuments of any kind.- Will not be used for special purposes, and no special permits, such as for residential use,industrial plants, waste storage or certain types of agricultural activities, are required.- Has no occupants, and no other party holds a legal interest in it.


Page 23

http://www.doingbusiness.org/en/methodology/registering-property

Registering Property - Lebanon

Figure – Registering Property in Lebanon – Score

Procedures

41.7

Time

82.8

Cost

59.9

Quality of the land administration index

53.3

Figure – Registering Property in Lebanon and comparator economies – Ranking and Score

DB 2020 Registering Property Score

0 100







Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average ofthe scores for each of the component indicators.


OECD highincome


Procedures (number) 8 5.4 4.7 1 (5 Economies)

Time (days) 37 26.6 23.6 1 (2 Economies)

Cost (% of property value) 6.0 5.6 4.2 0.0 (Saudi Arabia)

Quality of the land administration index (0-30) 16.0 14.6 23.2 None in 2018/19


Page 24

Figure – Registering Property in Lebanon – Procedure, Time and Cost




Procedures (number)1 2 3 * 4 5 6 7 8

0

5

10

15

20

25

30

35

Tim

e (d

ays)

0

1

2

3

4

5

6

7

Cost

(% o

f pro

pert

y va

lue)

Time (days) Cost (% of property value)


Page 25


Figure – Registering Property in Lebanon and comparator economies – Measure of Quality


Jordan SaudiArabia

Turkey MiddleEast

&NorthAfrica

05

1015202530

Inde

x sc

ore

16.0

9.0

22.5

14.0

27.0

14.6

Details – Registering Property in Lebanon – Procedure, Time and Cost


1 Obtain a copy of the ownership deed from the Land Registry: Land RegistryAgency

The parties apply for a copy of ownership deeds. The deed details provide the location, number,and size of the plot, who is registered owner, whether there are any disputes over ownership orpending legal cases. Importantly there is a compulsory government order on the property or, forexample, whether any roads are planned through the area.

The procedure to obtain the Real Estate Certificate is a straight forward one which only requiressubmission of the request, and the certificate is immediately issued thereafter. Starting in 2016,there is a possibility to obtain the certificate online by going tohttp://www.lrc.gov.lb/en/content/viewing-title-register.

1 day LBP 10,000

2 Obtain an official cadastral map and a location map of the property: Cadastre Administration (Da'irat al Massaha)Agency

If the area is not specified in the real estate certificate and in the title deed, which is often thecase, an official cadastral map and a location map of the property must be obtained from thecadastre administration (in Arabic “Dairat al Massaha”).

1 day LBP 20,000

3 Obtain an urban plan certificate from the Urban Planning Authority and the Municipality: Urban Planning Authority and MunicipalityAgency

Parties obtain an urban plan certificate from the Urban Planning Authority and the Municipality.This is not strictly required by the law, but it is usually requested by the buyer in order to makesure that no special easement or expropriation is planned on the property that he intends topurchase.

10 days LBP 6,000

4 Obtain a Municipal Tax Clearance (Bara’et Zimma): MunicipalityAgency

Obtain clearance from the Municipality to make sure that municipal taxes prior to the saleagreement have been paid. This is not required by law, but it is usually requested by the buyer.

3 days LBP 8,000

5 Preparation of the sale agreement by a lawyer: LawyerAgency

An attorney prepares the sale agreement on an official form. The participation of a lawyer is notmandatory, but it is preferred to avoid any mistakes. The sale contract is often drafted by thenotary public or by a qualified facilitator.However, for complex and delicate real estate transactions where either or both parties need toprotect their rights, the contract is usually negotiated and drafted by both parties’ attorneys.

The Beirut Bar Association on its decision of April 26th, 2012 has set a minimum fee of LBP1,500,000 for the drafting of a contract. Such minimum fee shall be subject to an increase takinginto consideration the contract's value and importance.

2 days LBP 1,500,000; (LBP1,500,000 (minimum setby the Beirut BarAssociation))

6 Obtain an official estimate of the property rental value from the Tax Authority: Ministry of FinanceAgency

An official estimate of the rental value of the property is requested together with a tax discharge(clearance). The Tax Authority at the Ministry of Finance orders an inspection of the property by acontroller to obtain an official estimate of the rental value of the property. A copy of the saleagreement should be submitted to the Ministry of Finance to obtain the official estimate of therental value.

10 days LBP 5,000


Page 26


7 Apply for registration at the Land Registry: Land RegistryAgency

The contract, together with the documentation, is presented, either a) directly to the Land Registryofficer before whom the contract is signed and then the property is registered, or b) to the notarypublic before whom the contract is signed and then both the contract and the documentation shallbe presented to the Land Registry for registration of title.

a) If it is presented to the Land Registry, all taxes and duties are paid at the tax authority cashier,which is located at the same building than the Land Registry.The Contract is presented to the Assistant Land Registrar, then it will go through one or twoofficers before it reaches the Land Registrar who would:(i)- either accept the contract if he/she agrees on the price that was set by the parties and findsthat there are no irregularities in the documents, in which case the contract shall be immediatelyregistered, and thereafter the new deed will be delivered to the buyer.(ii)- or refuse to register the contract until the price is amended (i.e. increased) or the irregularitiesin the documentation is rectified, in which case the Land Registrar’s request shall be satisfied andthe contract is to be presented once again for review and acceptance.It is only when the Land Registrar approves the signed contract and accepts to record it that thetitle to the property is transferred to the Buyer.Then, once the transaction is completed, the new title deed in the name of the Buyer is deliveredin about 5-7 business days. As per the express and clear provisions of the law, the buyer acquiresfull ownership only when the sale contract is recorded (i.e. after its acceptance) in the LandRegistry, regardless of when the new deed is delivered to him.

b) In case the contract is delivered for signing to the notary public, then both the contract and thedocumentation shall be presented to the Land Registry for registration of title.

All taxes and duties are paid directly at the notary public’s office, except for the stamp duty that ispaid at the Ministry of Finance if its amount exceeds LBP 200,000

The documentation shall include:• Title deed, as proof of ownership (held by seller)• Real Estate Certificate (obtained in Procedure 1)• Official cadastral map and location certificate of the property (obtained in Procedure 2)• Official estimate of rental value of the property (obtained in Procedure 5)• Municipal tax clearance (obtained in Procedure 6)• Sale agreement (prepared in Procedure 7)

10 days LBP 34,701,000; ((i) Saletransfer tax 5% + (ii) Flattaxes (Deed fee 8,000;contract fee 8,000 sellercontract fee 8,000 buyer )+(iii) New deed fee50,000+ (iv) contractstamp fee 10,000 + (vi)Deed stamp fee 5 000 +(vii) Municipality fee 5% (ofthe sale transfer tax + Flattaxes) + (viii) Lawyerssyndicate fee 1 perthousand of the amount +(ix) Stamp fee 4 perthousand of the amount)

8 Update the property record at the Cadaster: CadasterAgency

Once the registration at the land registry, the new owner must update the record at the Cadasterto reflect the new name. This is not yet done automatically.

3 days no charge


Page 27

Details – Registering Property in Lebanon – Measure of Quality

Answer Score

Quality of the land administration index (0-30) 16.0

Reliability of infrastructure index (0-8) 4.0

Type of land registration system in the economy: Deed RegistrationSystem

What is the institution in charge of immovable property registration? Real Estate Registrar

In what format are past and newly issued land records kept at the immovable property registry of the largestbusiness city of the economy —in a paper format or in a computerized format (scanned or fully digital)?

Computer/Fully digital 2.0

Is there a comprehensive and functional electronic database for checking for encumbrances (liens, mortgages,restrictions and the like)?

Yes 1.0

Institution in charge of the plans showing legal boundaries in the largest business city: CadastreAdministration(Da'irat al Massaha)

In what format are past and newly issued cadastral plans kept at the mapping agency of the largest businesscity of the economy—in a paper format or in a computerized format (scanned or fully digital)?

Paper 0.0

Is there an electronic database for recording boundaries, checking plans and providing cadastral information(geographic information system)?

No 0.0

Is the information recorded by the immovable property registration agency and the cadastral or mapping agencykept in a single database, in different but linked databases or in separate databases?

Separate databases 0.0

Do the immovable property registration agency and cadastral or mapping agency use the same identificationnumber for properties?

Yes 1.0

Transparency of information index (0–6) 3.0

Who is able to obtain information on land ownership at the agency in charge of immovable property registrationin the largest business city?

Anyone who pays theofficial fee

1.0

Is the list of documents that are required to complete any type of property transaction made publicly available–and if so, how?

Yes, online 0.5

Link for online access: http://www.lrc.gov.lb/en/content/required-documents

Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable propertyregistration in the largest business city made publicly available–and if so, how?

Yes, online 0.5

Link for online access: http://www.lrc.gov.lb/en/content/fees-simulation-0

Does the agency in charge of immovable property registration agency formally commit to deliver a legallybinding document that proves property ownership within a specific timeframe –and if so, how does itcommunicate the service standard?

No 0.0

Link for online access:

Is there a specific and independent mechanism for filing complaints about a problem that occurred at the agencyin charge of immovable property registration?

No 0.0

Contact information:

Are there publicly available official statistics tracking the number of transactions at the immovable propertyregistration agency?

No 0.0

Number of property transfers in the largest business city in 2018:

Who is able to consult maps of land plots in the largest business city? Anyone who pays theofficial fee

0.5

Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? Yes, on public boards 0.5



Page 28

Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—andif so, how does it communicate the service standard?

Yes, in person 0.0


Is there a specific and independent mechanism for filing complaints about a problem that occurred at thecadastral or mapping agency?

No 0.0

Contact information:

Geographic coverage index (0–8) 4.0

Are all privately held land plots in the largest business city formally registered at the immovable propertyregistry?

Yes 2.0

Are all privately held land plots in the economy formally registered at the immovable property registry? No 0.0

Are all privately held land plots in the largest business city mapped? Yes 2.0

Are all privately held land plots in the economy mapped? No 0.0

Land dispute resolution index (0–8) 5.0

Does the law require that all property sale transactions be registered at the immovable property registry to makethem opposable to third parties?

Yes 1.5

Legal basis: Code of Real EstateOwnership (1930)and the Article 11 ofthe Decision ofEstablishment theland registry Number188 dated 15/3/1926

Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5

Type of guarantee: State guarantee

Legal basis: Code of Real EstateOwnership (1930)and the Article 13 ofthe Decision ofEstablishment theland registry Number188 dated 15/3/1926

Is there a is a specific, out-of-court compensation mechanism to cover for losses incurred by parties whoengaged in good faith in a property transaction based on erroneous information certified by the immovableproperty registry?

No 0.0

Legal basis:

Does the legal system require a control of legality of the documents necessary for a property transaction (e.g.,checking the compliance of contracts with requirements of the law)?

Yes 0.5

If yes, who is responsible for checking the legality of the documents? Registrar; Notary;

Does the legal system require verification of the identity of the parties to a property transaction? Yes 0.5

If yes, who is responsible for verifying the identity of the parties? Registrar; Notary;

Is there a national database to verify the accuracy of government issued identity documents? Yes 1.0

What is the Court of first instance in charge of a case involving a standard land dispute between two localbusinesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and locatedin the largest business city?

Court of FirstInstance of Beirutruling on real estatematters

How long does it take on average to obtain a decision from the first-instance court for such a case (withoutappeal)?

Between 2 and 3years

1.0

Are there publicly available statistics on the number of land disputes at the economy level in the first instancecourt?

No 0.0

Number of land disputes in the economy in 2018:

Equal access to property rights index (-2–0) 0.0


Page 29

Do unmarried men and unmarried women have equal ownership rights to property? Yes

Do married men and married women have equal ownership rights to property? Yes 0.0


Page 30

Getting Credit

This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The mostrecent round of data collection for the project was completed in May 2019. .See the methodology for more information


Strength of legal rights index (0–12)

Rights of borrowers and lenders through collateral laws (0-10)•Protection of secured creditors’ rights through bankruptcy laws(0-2)

•

Depth of credit information index (0–8)

Scope and accessibility of credit information distributed bycredit bureaus and credit registries (0-8)

•

Credit bureau coverage (% of adults)

Number of individuals and firms listed in largest credit bureauas a percentage of adult population

•

Credit registry coverage (% of adults)

Number of individuals and firms listed in credit registry as apercentage of adult population

•


assesses the sharing of credit information and the legal rights of borrowers andlenders with respect to secured transactions through 2 sets of indicators. The depth of creditinformation index measures rules and practices affecting the coverage, scope and accessibility ofcredit information available through a credit registry or a credit bureau. The strength of legal rightsindex measures the degree to which collateral and bankruptcy laws protect the rights of borrowersand lenders and thus facilitate lending. For each economy it is first determined whether a unitarysecured transactions system exists. Then two case scenarios, case A and case B, are used todetermine how a nonpossessory security interest is created, publicized and enforced according tothe law. Special emphasis is given to how the collateral registry operates (if registration of securityinterests is possible). The case scenarios involve a secured borrower, company ABC, and asecured lender, BizBank.

Doing Business

In some economies the legal framework for secured transactions will allow only case A or case B(not both) to apply. Both cases examine the same set of legal provisions relating to the use ofmovable collateral.

Several assumptions about the secured borrower (ABC) and lender (BizBank) are used:

- ABC is a domestic limited liability company (or its legal equivalent).- ABC has up to 50 employees.- ABC has its headquarters and only base of operations in the economy’s largest business city. For11 economies the data are also collected for the second largest business city.- Both ABC and BizBank are 100% domestically owned.

The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grantsBizBank a nonpossessory security interest in one category of movable assets, for example, itsmachinery or its inventory. ABC wants to keep both possession and ownership of the collateral. Ineconomies where the law does not allow nonpossessory security interests in movable property,ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute fornonpossessory security interests).

In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or anycharge that gives BizBank a security interest over ABC’s combined movable assets (or as much ofABC’s movable assets as possible). ABC keeps ownership and possession of the assets.


Page 31

http://www.doingbusiness.org/en/methodology/getting-credit

Getting Credit - Lebanon

Figure – Getting Credit in Lebanon – Score

Score - Getting Credit

40.0

Figure – Getting Credit in Lebanon and comparator economies – Ranking and Score

DB 2020 Getting Credit Score

0 100







Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for thestrength of legal rights index and the depth of credit information index.


OECD highincome


Strength of legal rights index (0-12) 2 3.1 6.1 12 (5 Economies)

Depth of credit information index (0-8) 6 5.3 6.8 8 (53 Economies)

Credit registry coverage (% of adults) 21.3 15.8 24.4 100.0 (2 Economies)

Credit bureau coverage (% of adults) 0.0 16.3 66.7 100.0 (14 Economies)


Page 32

Figure – Legal Rights in Lebanon and comparator economies


Jordan SaudiArabia

Turkey MiddleEast

&NorthAfrica

02468

1012

Inde

x Sc

ore

2

5

11

4

7

3.1


Page 33

Details – Legal Rights in Lebanon

Strength of legal rights index (0-12) 2

Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalentsto security interests in movable assets exist in the economy?

No

Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific descriptionof collateral?

No

Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description ofcollateral?

Yes

May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of theoriginal assets?

No

Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties;and can the collateral agreement include a maximum amount for which the assets are encumbered?

Yes

Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with anelectronic database indexed by debtor's name?

No

Does a notice-based collateral registry exist in which all functional equivalents can be registered? No

Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested thirdparty?

No

Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? No

Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? No

Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the lawprotect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it?

No

Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sellthe collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt?

No

Figure – Credit Information in Lebanon and comparator economies


Jordan SaudiArabia

Turkey MiddleEast

&NorthAfrica

0123456789

Inde

x Sc

ore 6

8 8 8 8

5.3


Page 34

Details – Credit Information in Lebanon

Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adultpopulation, the total score on the depth of credit information index is 0.

Depth of credit information index (0-8) Credit bureau Credit registry Score

Are data on both firms and individuals distributed? No Yes 1

Are both positive and negative credit data distributed? No Yes 1

Are data from retailers or utility companies - in addition to data from banks andfinancial institutions - distributed?

No No 0

Are at least 2 years of historical data distributed? (Credit bureaus and registriesthat distribute more than 10 years of negative data or erase data on defaults assoon as they are repaid obtain a score of 0 for this component.)

No Yes 1

Are data on loan amounts below 1% of income per capita distributed? No Yes 1

By law, do borrowers have the right to access their data in the credit bureau orcredit registry?

No Yes 1

Can banks and financial institutions access borrowers’ credit information online(for example, through an online platform, a system-to-system connection orboth)?

No Yes 1

Are bureau or registry credit scores offered as a value-added service to helpbanks and financial institutions assess the creditworthiness of borrowers?

No No 0

Coverage Credit bureau Credit registry

Number of individuals 0 973,912

Number of firms 0 27,259

Total 0 1,001,171

Percentage of adult population 0.0 21.3


Page 35

Protecting Minority Investors

This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights,governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completedin May 2019. .See the methodology for more information


: Disclosure, review, andapproval requirements for related-party transactions

• Extent of disclosure index (0–10)

: Ability of minorityshareholders to sue and hold interested directors liable forprejudicial related-party transactions; Available legalremedies (damages, disgorgement of profits, disqualificationfrom managerial position(s) for one year or more, rescission ofthe transaction)

• Extent of director liability index (0–10)

: Access to internalcorporate documents; Evidence obtainable during trial andallocation of legal expenses

• Ease of shareholder suits index (0–10)

Sum ofthe extent of disclosure, extent of director liability and ease ofshareholder suits indices

• Extent of conflict of interest regulation index (0-30):

: Shareholders’ rightsand role in major corporate decisions

• Extent of shareholder rights index (0-6)

: Governancesafeguards protecting shareholders from undue board controland entrenchment

• Extent of ownership and control index (0-7)

: Corporatetransparency on ownership stakes, compensation, audits andfinancial prospects

• Extent of corporate transparency index (0-7)

: Sum of theextent of shareholders rights, extent of ownership and controland extent of corporate transparency indices

• Extent of shareholder governance index (0–20)

: Sumof the extent of conflict of interest regulation and extent ofshareholder governance indices

• Strength of minority investor protection index (0–50)


To make the data comparable across economies, a case study uses several assumptions aboutthe business and the transaction.

- Is a publicly traded corporation listed on the economy’s most important stock exchange.- Has a board of directors and a chief executive officer (CEO) who may legally act on behalf ofBuyer where permitted, even if this is not specifically required by law.- Has a supervisory board in economies with a two-tier board system on which Mr. Jamesappointed 60% of the shareholder-elected members.- Has not adopted bylaws or articles of association that go beyond the minimum requirements.Does not follow codes, principles, recommendations or guidelines that are not mandatory.- Is a manufacturing company with its own distribution network.

The business (Buyer):

- Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors toBuyer’s five-member board.- Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores.Seller recently closed a large number of its stores.- Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Buyer’sdistribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% ofBuyer’s assets and is higher than the market value.- The proposed transaction is part of the company’s principal activity and is not outside theauthority of the company.- Buyer enters into the transaction. All required approvals are obtained, and all required disclosuresmade—that is, the transaction was not entered into fraudulently.- The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives anddirectors that approved the transaction.

The transaction involves the following details:


Page 36

http://www.doingbusiness.org/en/methodology/protecting-minority-investors

Protecting Minority Investors - Lebanon

Figure – Protecting Minority in Lebanon – Score

Score - Protecting Minority Investors

44.0

Figure – Protecting Minority Investors in Lebanon and comparator economies – Ranking and Score

DB 2020 Protecting Minority Investors Score

0 100







Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores arethe simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index.

Stock exchange information

Stock exchange Beirut Stock Exchange

Stock exchange URL http://www.bse.com.lb

Listed firms with equity securities 10

City Covered Beirut


OECD highincome


Extent of disclosure index (0-10) 9.0 6.4 6.5 10 (13 Economies)

Extent of director liability index (0-10) 1.0 4.8 5.3 10 (3 Economies)

Ease of shareholder suits index (0-10) 5.0 4.7 7.3 10 (Djibouti)

Extent of shareholder rights index (0-6) 3.0 3.2 4.7 6 (19 Economies)

Extent of ownership and control index (0-7) 1.0 3.6 4.5 7 (9 Economies)

Extent of corporate transparency index (0-7) 3.0 3.5 5.7 7 (13 Economies)


Page 37

Figure – Protecting Minority Investors in Lebanon and comparator economies – Measure of Quality

Lebanon

Egypt, Arab Rep.

Jordan

Saudi Arabia

Turkey

OECD high income

Middle East & North Africa

0 5 10 15 20 25 30 35 40 45Sub-Indicator Score

3 1 9 1 3 5

6 3 8 6 6 3

6 4 4 6 2 3

7 9 9 6 5 7

6 5 9 6 6 6

5.6 5.6 6.6 4.3 4.5 7.4

3.5 4.8 6.4 3.6 3.2 4.7

Extent of corporate transparency index (0-7) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-7)Extent of shareholder rights index (0-6) Ease of shareholder suits index (0-10)


Page 38

Details – Protecting Minority Investors in Lebanon – Measure of Quality

Answer Score

Extent of conflict of interest regulation index (0-30)

Extent of disclosure index (0-10) 9.0

Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3) Shareholdersexcluding interestedparties

3.0

Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0

Must Mr. James disclose his conflict of interest to the board of directors? (0-2) Existence of a conflictwithout any specifics

1.0

Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) Disclosure on thetransaction and onthe conflict of interest

2.0

Must Buyer immediately disclose the transaction to the public? (0-2) Disclosure on thetransaction and onthe conflict of interest

2.0

Extent of director liability index (0-10) 1.0

Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused toBuyer? (0-1)

Yes 1.0

Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2) Not liable 0.0

Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2) Not liable 0.0

Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1) No 0.0

Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1) No 0.0

Is Mr. James disqualified upon a successful claim by shareholders? (0-1) No 0.0

Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of fraudor bad faith

0.0

Ease of shareholder suits index (0-10) 5.0

Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents?(0-1)

Yes 1.0

Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Any relevantdocument

3.0

Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1) No 0.0

Can the plaintiff directly question the defendant and witnesses at trial? (0-2) No 0.0

Is the level of proof required for civil suits lower than that of criminal cases? (0-1) No 0.0

Can shareholder plaintiffs recover their legal expenses from the company? (0-2) Yes if successful 1.0

Extent of shareholder governance index (0-20)

Extent of shareholder rights index (0-6) 3.0

Does the sale of 51% of Buyer's assets require shareholder approval? No 0.0

Can shareholders representing 10% of Buyer's share capital call for a meeting of shareholders? No 0.0

Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0

Do shareholders automatically receive preemption rights every time Buyer issues new shares? No 0.0

Do shareholders elect and dismiss the external auditor? Yes 1.0

Are changes to the rights of a class of shares only possible if the holders of the affected shares approve? Yes 1.0

Extent of ownership and control index (0-7) 1.0

Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors? No 0.0


Page 39

Must the board of directors include independent and nonexecutive board members? No 0.0

Can shareholders remove members of the board of directors without cause before the end of their term? Yes 1.0

Must the board of directors include a separate audit committee exclusively comprising board members? No 0.0

Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer? No 0.0

Must Buyer pay declared dividends within a maximum period set by law? No 0.0

Is a subsidiary prohibited from acquiring shares issued by its parent company? No 0.0

Extent of corporate transparency index (0-7) 3.0

Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? Yes 1.0

Must Buyer disclose information about board members’ primary employment and directorships in othercompanies?

No 0.0

Must Buyer disclose the compensation of individual managers? No 0.0

Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0

Can shareholders representing 5% of Buyer’s share capital put items on the general meeting agenda? No 0.0

Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0

Must Buyer disclose its audit reports to the public? Yes 1.0


Page 40

Paying Taxes

This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden ofpaying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project wascompleted in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information.


Tax payments for a manufacturing company in 2018 (numberper year adjusted for electronic and joint filing and payment)

Total number of taxes and contributions paid or withheld,including consumption taxes (value added tax, sales tax orgoods and service tax)

•

Method and frequency of filing and payment•Time required to comply with 3 major taxes (hours per year)

Collecting information, computing tax payable•Preparing separate tax accounting books, if required•Completing tax return, filing with agencies•Arranging payment or withholding•

Total tax and contribution rate (% of commercial profits)

Profit or corporate income tax•Social contributions, labor taxes paid by employer•Property and property transfer taxes•Dividend, capital gains, financial transactions taxes•Waste collection, vehicle, road and other taxes•

Postfiling Index

Time to comply with VAT refund (hours)•Time to obtain VAT refund (weeks)•Time to comply with a corporate income tax correction (hours)•Time to complete a corporate income tax correction (weeks)•


Using a case scenario, records taxes and mandatory contributions a medium sizecompany must pay in a year, and measures the administrative burden of paying taxes,contributions and dealing with postfiling processes. Information is also compiled on frequency offiling and payments, time taken to comply with tax laws, time taken to comply with therequirements of postfiling processes and time waiting.

Doing Business

To make data comparable across economies, several assumptions are used:- TaxpayerCo is a medium-size business that started operations on January 1, 2017. It producesceramic flowerpots and sells them at retail.

Taxes and mandatory contributions are measuredat all levels of government.

- In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 timesincome per capita of the economy. Sales are equally spread per month (1,050 times income percapita divided by 12) and cost of goods sold are equally expensed per month (875 times incomeper capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurredin June will be fully recovered after four consecutive months if the VAT rate is the same for inputs,sales and the machine and the tax reporting period is every month. Input VAT will exceed OutputVAT in June 2018.

All taxes and contributions recorded are paid in thesecond year of operation (calendar year 2018).

The VAT refund process:

- An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates,or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and acorporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified thetax authority. The value of the underpaid income tax liability is 5% of the corporate income taxliability due. TaxpayerCo. submits corrected information after the deadline for submitting the annualtax return, but within the tax assessment period.

The corporate income tax audit process:


Page 41

http://www.doingbusiness.org/en/methodology/paying-taxes

Paying Taxes - Lebanon

Figure – Paying Taxes in Lebanon – Score

Payments

71.7

Time

79.6

Total tax and contribution rate

91.4

Postfiling index

27.5

Figure – Paying Taxes in Lebanon and comparator economies – Ranking and Score

DB 2020 Paying Taxes Score

0 100







Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores foreach of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. Thethreshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including DoingBusiness 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold.


OECD highincome


Payments (number per year) 20 16.5 10.3 3 (2 Economies)

Time (hours per year) 181 202.6 158.8 49 (3 Economies)

Total tax and contribution rate (% of profit) 32.2 32.5 39.9 26.1 (33 Economies)

Postfiling index (0-100) 27.5 53.3 86.7 None in 2018/19


Page 42

Figure – Paying Taxes in Lebanon and comparator economies – Measure of Quality


Jordan SaudiArabia

Turkey MiddleEast

&NorthAfrica

020406080

100120

Inde

x sc

ore

27.5 36.3 35.7 32.2

100

53.3


Page 43

Details – Paying Taxes in Lebanon

Tax ormandatorycontribution

Payments(number)

Notes onPayments

Time (hours) Statutory taxrate

Tax base Total tax andcontributionrate (% ofprofit)

Notes on TTCR

Social securitycontributions

12.0 100.0 22.5% gross salaries 24.88

Corporateincome tax

1.0 40.0 17% taxable profit 6.17

Capital gains tax 0.0 jointly 15% capital gains 0.76

Municipality tax 1.0 8.5% property value 0.41

Value added tax(VAT)

4.0 41.0 11% value added 0.00 not included

Vehicle tax 1.0 various rates 0.00 small amount

Social securitycontributions onemployee

0.0 jointly 3% gross salaries 0.00 withheld

Stamp duty 1.0 0.4% contract value 0.00 small amount

Totals 20 181 32.2


Page 44

Details – Paying Taxes in Lebanon – Tax by Type

Taxes by type Answer

Profit tax (% of profit) 6.9

Labor tax and contributions (% of profit) 24.9

Other taxes (% of profit) 0.4


Page 45

Details – Paying Taxes in Lebanon – Measure of Quality

Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table.The hours for VAT include all the VAT and sales taxes applicable.The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correctionand time to complete a corporate income tax correction.N/A = Not applicable.

Notes:

Answer Score

Postfiling index (0-100) 27.5

VAT refunds

Does VAT exist? Yes

Does a VAT refund process exist per the case study? Yes

Restrictions on VAT refund process none

Percentage of cases exposed to a VAT audit (%) 75% - 100%

Is there a mandatory carry forward period? No

Time to comply with VAT refund (hours) 47.0 6.0

Time to obtain VAT refund (weeks) 44.0 21.9

Corporate income tax audits

Does corporate income tax exist? Yes

Percentage of cases exposed to a corporate income tax audit (%) 25% - 49%

Time to comply with a corporate income tax correction (hours) 23.0 60.6

Time to complete a corporate income tax correction (weeks) 25.1 21.4


Page 46

Trading across Borders

records the time and cost associated with the logistical process of exporting and importing goods. measures the time and cost (excludingtariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting orimporting a shipment of goods. The most recent round of data collection for the project was completed in May 2019. .

Doing Business Doing Business

See the methodology for more information


Documentary compliance

Obtaining, preparing and submitting documents duringtransport, clearance, inspections and port or border handling inorigin economy

•

Obtaining, preparing and submitting documents required bydestination economy and any transit economies

•

Covers all documents required by law and in practice, includingelectronic submissions of information

•

Border compliance

Customs clearance and inspections•Inspections by other agencies (if applied to more than 20% ofshipments)

•

Handling and inspections that take place at the economy’s portor border

•

Domestic transport

Loading or unloading of the shipment at the warehouse orport/border

•

Transport between warehouse and port/border•Traffic delays and road police checks while shipment is enroute

•


To make the data comparable across economies, a few assumptions are made about the tradedgoods and the transactions:

Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively,suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight andcan be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as24 hours because the actual procedure took 24 hours.

Time:

Insurance cost and informal payments for which no receipt is issued are excluded from thecosts recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currencyinto U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire.Contributors are private sector experts in international trade logistics and are informed aboutexchange rates.

Cost:

- For all 190 economies covered by , it is assumed a shipment is in a warehouse inthe largest business city of the exporting economy and travels to a warehouse in the largestbusiness city of the importing economy.- It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) fromits natural import partner—the economy from which it imports the largest value (price timesquantity) of auto parts. It is assumed each economy exports the product of its comparativeadvantage (defined by the largest export value) to its natural export partner—the economy that isthe largest purchaser of this product. Shipment value is assumed to be $50,000.- The mode of transport is the one most widely used for the chosen export or import product andthe trading partner, as is the seaport or land border crossing.- All electronic information submissions requested by any government agency in connection withthe shipment are considered to be documents obtained, prepared and submitted during the exportor import process.- A port or border is a place (seaport or land border crossing) where merchandise can enter orleave an economy.- Relevant government agencies include customs, port authorities, road police, border guards,standardization agencies, ministries or departments of agriculture or industry, national securityagencies and any other government authorities.

Assumptions of the case study:Doing Business


Page 47

http://www.doingbusiness.org/en/methodology/trading-across-borders

Trading across Borders - Lebanon

Figure – Trading across Borders in Lebanon – Score

Timeto

export:Border

compliance

40.3

Costto

export:Border

compliance

54.7

Timeto

export:Documentarycompliance

72.2

Costto

export:Documentarycompliance

75.0

Timeto

import:Border

compliance

35.8

Costto

import:Border

compliance

34.2

Timeto

import:Documentarycompliance

70.3

Costto

import:Documentarycompliance

80.7

Figure – Trading across Borders in Lebanon and comparator economies – Ranking and Score

DB 2020 Trading Across Borders Score

0 100







Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simpleaverage of the scores for the time and cost for documentary compliance and border compliance to export and import.


OECD highincome


Time to export: Border compliance (hours) 96 52.5 12.7 1 (19 Economies)

Cost to export: Border compliance (USD) 480 441.8 136.8 0 (19 Economies)

Time to export: Documentary compliance (hours) 48 66.4 2.3 1 (26 Economies)

Cost to export: Documentary compliance (USD) 100 240.7 33.4 0 (20 Economies)

Time to import: Border compliance (hours) 180 94.2 8.5 1 (25 Economies)

Cost to import: Border compliance (USD) 790 512.5 98.1 0 (28 Economies)

Time to import: Documentary compliance (hours) 72 72.5 3.4 1 (30 Economies)

Cost to import: Documentary compliance (USD) 135 262.6 23.5 0 (30 Economies)


Page 48

Figure – Trading across Borders in Lebanon – Time and Cost

Export-

BorderCompliance

Export-

DocumentaryCompliance

Import-

BorderCompliance

Import-

DocumentaryCompliance

0

50

100

150

200

Tim

e (h

ours

)

0100200300400500600700800900

Cost

(USD

)

96 480

48100

180 790

72

135

Time (hours) Cost (USD)


Page 49

Details – Trading across Borders in Lebanon

Characteristics Export Import

Product HS 85 : Electrical machinery and equipment andparts thereof; sound recorders and reproducers,television image and sound recorders andreproducers, and parts and accessories of sucharticles

HS 8708: Parts and accessories of motor vehicles

Trade partner United Arab Emirates Germany

Border Beirut port Beirut port

Distance (km) 14 14

Domestic transport time (hours) 3 2

Domestic transport cost (USD) 250 250

Details – Trading across Borders in Lebanon – Components of Border Compliance

Time to Complete (hours) Associated Costs (USD)

Export: Clearance and inspections required bycustoms authorities

48.0 300.0

Export: Clearance and inspections required byagencies other than customs

0.0 0.0

Export: Port or border handling 96.0 180.0

Import: Clearance and inspections required bycustoms authorities

84.0 300.0

Import: Clearance and inspections required byagencies other than customs

84.0 165.0

Import: Port or border handling 180.0 325.0


Page 50

Details – Trading across Borders in Lebanon – Trade Documents

Export Import

Bill of lading Bill of lading

Commercial invoice Commercial invoice

Customs export declaration Customs import declaration

Packing list Packing list

Customs inspection report Certificate of origin

SOLAS certificate Cargo release order/Exit permit

Certificate of origin Technical standards certificate

SOLAS certificate

Delivery order


Page 51

Enforcing Contracts

.

The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processesindex, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of datacollection was completed in May 2019. See the methodology for more information


Time required to enforce a contract through the courts(calendar days)

Time to file and serve the case•Time for trial and to obtain the judgment•Time to enforce the judgment•

Cost required to enforce a contract through the courts (% ofclaim value)

Average attorney fees•Court costs•Enforcement costs•

Quality of judicial processes index (0-18)

Court structure and proceedings (-1-5)•Case management (0-6)•Court automation (0-4)•Alternative dispute resolution (0-3)•


The dispute in the case study involves the breach of a sales contract between two domesticbusinesses. The case study assumes that the court hears an expert on the quality of the goods indispute. This distinguishes the case from simple debt enforcement.

To make the data on the time and comparable across economies, several assumptions about thecase are used:- The dispute concerns a lawful transaction between two businesses (Seller and Buyer), bothlocated in the economy’s largest business city. For 11 economies the data are also collected for thesecond largest business city.- The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not ofadequate quality.- The value of the dispute is 200% of the income per capita or the equivalent in local currency ofUSD 5,000, whichever is greater.- The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% ofincome per capita or $5,000 whichever is greater.- The Seller requests the pretrial attachment of the defendant’s movable assets to secure theclaim.- The claim is disputed on the merits because of Buyer’s allegation that the quality of the goodswas not adequate.- The judge decides in favor of the seller; there is no appeal.- The Seller enforces the judgment through a public sale of the Buyer’s movable assets.


Page 52

http://www.doingbusiness.org/en/methodology/enforcing-contracts

Enforcing Contracts - Lebanon

Figure – Enforcing Contracts in Lebanon – Score

Time

50.7

Cost

65.5

Quality of judicial processes index

36.1

Figure – Enforcing Contracts in Lebanon and comparator economies – Ranking and Score

DB 2020 Enforcing Contracts Score

0 100







Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average ofthe scores for each of the component indicators.

Standardized Case

Claim value LBP 25,734,102

Court name Sole judge hearing commercial matters at the Beirut First Instance Tribunal

City Covered Beirut


OECD highincome


Time (days) 721 622.0 589.6 120 (Singapore)

Cost (% of claim value) 30.8 24.7 21.5 0.1 (Bhutan)

Quality of judicial processes index (0-18) 6.5 6.6 11.7 None in 2018/19


Page 53

Figure – Enforcing Contracts in Lebanon – Time and Cost

Egypt,ArabRep.

Jordan Lebanon MiddleEast

&NorthAfrica

OECDhigh

income

SaudiArabia

Turkey

0

200

400

600

800

1000

1200

Tim

e (d

ays)

05101520253035

Cost

(% o

f cla

im v

alue

)

101026.2

642

31.2

721

30.8

622.0

24.7

589.621.5

575

27.5

623

24.9

Time (days) Cost (% of claim value)


Page 54

Figure – Enforcing Contracts in Lebanon and comparator economies – Measure of Quality

Lebanon

Egypt, Arab Rep.

Jordan

Saudi Arabia

Turkey

OECD high income


0 2 4 6 8 10 12 14 16Sub-Indicator Score

2 0.5 0 4

2 00 2

3 2 1 2

2 3.5 2 4

2.5 5 4 3.5

2.5 3.2 2.4 3.6

2.2 1.1 0.5 2.9

Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5)

Details – Enforcing Contracts in Lebanon

Indicator

Time (days) 721

Filing and service 15

Trial and judgment 556

Enforcement of judgment 150

Cost (% of claim value) 30.8

Attorney fees 24.8

Court fees 3

Enforcement fees 3

Quality of judicial processes index (0-18) 6.5

Court structure and proceedings (-1-5) 4.0

Case management (0-6) 0.5

Court automation (0-4) 0.0

Alternative dispute resolution (0-3) 2.0


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Details – Enforcing Contracts in Lebanon – Measure of Quality

Answer Score

Quality of judicial processes index (0-18) 6.5

Court structure and proceedings (-1-5) 4.0

1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5

2. Small claims court 1.5

2.a. Is there a small claims court or a fast-track procedure for small claims? Yes

2.b. If yes, is self-representation allowed? Yes

3. Is pretrial attachment available? Yes 1.0

4. Are new cases assigned randomly to judges? No 0.0

5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0

Case management (0-6) 0.5

1. Time standards 0.5

1.a. Are there laws setting overall time standards for key court events in a civil case? Yes

1.b. If yes, are the time standards set for at least three court events? Yes

1.c. Are these time standards respected in more than 50% of cases? No

2. Adjournments 0.0

2.a. Does the law regulate the maximum number of adjournments that can be granted? No

2.b. Are adjournments limited to unforeseen and exceptional circumstances? No

2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a.

3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii)clearance rate report; (iii) age of pending cases report; and (iv) single case progress report?

No 0.0

4. Is a pretrial conference among the case management techniques used before the competent court? No 0.0

5. Are there any electronic case management tools in place within the competent court for use by judges? No 0.0

6. Are there any electronic case management tools in place within the competent court for use by lawyers? No 0.0

Court automation (0-4) 0.0

1. Can the initial complaint be filed electronically through a dedicated platform within the competent court? No 0.0

2. Is it possible to carry out service of process electronically for claims filed before the competent court? No 0.0

3. Can court fees be paid electronically within the competent court? No 0.0

4. Publication of judgments 0.0

4.a Are judgments rendered in commercial cases at all levels made available to the general publicthrough publication in official gazettes, in newspapers or on the internet or court website?

No

4.b. Are judgments rendered in commercial cases at the appellate and supreme court level madeavailable to the general public through publication in official gazettes, in newspapers or on the internetor court website?

No

Alternative dispute resolution (0-3) 2.0

1. Arbitration 1.0

1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter orsection of the applicable code of civil procedure encompassing substantially all its aspects?

Yes

1.b. Are there any commercial disputes—aside from those that deal with public order or public policy—that cannot be submitted to arbitration?

Yes

1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes


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2. Mediation/Conciliation 1.0

2.a. Is voluntary mediation or conciliation available? Yes

2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter orsection of the applicable code of civil procedure encompassing substantially all their aspects (forexample, definition, aim and scope of application, desig

Yes

2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation orconciliation is successful, a refund of court filing fees, income tax credits or the like)?

No


Page 57

Resolving Insolvency

studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate,which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings.To determine the present value of the amount recovered by creditors, uses the lending rates from the International Monetary Fund, supplemented withdata from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019.

.

Doing Business

Doing BusinessSee the methodology for more

information


Time required to recover debt (years)

Measured in calendar years•Appeals and requests for extension are included•

Cost required to recover debt (% of debtor’s estate)

Measured as percentage of estate value•Court fees•Fees of insolvency administrators•Lawyers’ fees•Assessors’ and auctioneers’ fees•Other related fees•

Outcome

Whether business continues operating as a going concern orbusiness assets are sold piecemeal

•

Recovery rate for creditors

Measures the cents on the dollar recovered by securedcreditors

•

Outcome for the business (survival or not) determines themaximum value that can be recovered

•

Official costs of the insolvency proceedings are deducted•Depreciation of furniture is taken into account•Present value of debt recovered•

Strength of insolvency framework index (0- 16)

Sum of the scores of four component indices:•Commencement of proceedings index (0-3)•Management of debtor’s assets index (0-6)•Reorganization proceedings index (0-3)•Creditor participation index (0-4)•


To make the data on the time, cost and outcome comparable across economies, severalassumptions about the business and the case are used:

- A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotelexperiences financial difficulties.- The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD200,000, whichever is greater.- The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate.The hotel cannot pay back the loan, but makes enough money to operate otherwise.

In addition, evaluates the quality of legal framework applicable to judicialliquidation and reorganization proceedings and the extent to which best insolvency practices havebeen implemented in each economy covered.

Doing Business


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http://www.doingbusiness.org/en/methodology/resolving-insolvency

http://www.doingbusiness.org/en/methodology/resolving-insolvency

Resolving Insolvency - Lebanon

Figure – Resolving Insolvency in Lebanon – Score

Recovery rate

33.2

Strength of insolvency framework index

25.0

Figure – Resolving Insolvency in Lebanon and comparator economies – Ranking and Score

DB 2020 Resolving Insolvency Score

0 100







Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple averageof the scores for the recovery rate and the strength of insolvency framework index.


OECD highincome


Recovery rate (cents on the dollar) 30.8 27.3 70.2 92.9 (Norway)

Time (years) 3.0 2.7 1.7 0.4 (Ireland)

Cost (% of estate) 15.0 14.0 9.3 1.0 (Norway)

Outcome (0 as piecemeal sale and 1 as going concern) 0 .. .. ..

Strength of insolvency framework index (0-16) 4.0 6.3 11.9 None in 2018/19


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Figure – Resolving Insolvency in Lebanon – Time and Cost

Egypt,ArabRep.

Jordan Lebanon MiddleEast

&NorthAfrica

OECDhigh

income

NoPracticeSaudiArabia

Turkey

0

1

2

3

4

5

6

Tim

e (y

ears

)

0

5

10

15

20

25

Cost

(% o

f est

ate)

2.5

22.0

3.0

20.0

3.015.0

2.714.0

1.79.3

5.0

14.5

Time (years) Cost (% of estate)


Page 60

Figure – Resolving Insolvency in Lebanon and comparator economies – Measure of Quality

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for thestrength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Lebanon

Egypt, Arab Rep.

Jordan

Saudi Arabia

Turkey

OECD high income


0 2 4 6 8 10 12 14Sub-Indicator Score

2 2 00

4 2.5 2 1

4 2.5 1 0.5

3.5 3 2 2

3 3 3 1.5

5.3 2.8 2.1 1.9

3.7 2.3 1.3 0.6

Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3)

Figure – Resolving Insolvency in Lebanon and comparator economies – Recovery Rate

Lebanon Egypt, Arab Rep. Jordan Saudi Arabia Turkey Middle East & North Africa

0

5

10

15

20

25

30

35

Reco

very

rate

(cen

ts o

n th

e do

llar)

30.8

23.327.3

No Practice

10.5

27.3


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Details – Resolving Insolvency in Lebanon

Indicator Answer Score

Proceeding foreclosure BizBank will initiate foreclosure proceedings (saisie exécutoire), because it is faster and less costly than liquidationproceedings and allows BizBank to obtain the totality of its dues independently of other debtors. If Miragemanagement or other creditors commence insolvency proceedings, BizBank's enforcement claim will not be affected,except that a syndic may be appointed, who will represent the debtor in foreclosure proceedings.

Outcome piecemeal sale The hotel is not likely to continue operating at the end of the foreclosure proceedings as the assets will be sold duringBizBank's enforcement proceedings.

Time (in years) 3.0 BizBank will file for "saisie exécutoire", which normally involves a simple enforcement of security right without review ofthe merits. However, it is likely that hotel management will try to dispute the validity of BizBank's security, which meansthat the proceedings will become more complex and will take longer than straightforward enforcement proceedings.After disputes over the validity of the debt are settled, the court will issue an execution order, which will be enforced bycourt clerks (huissiers), who will seize and attach the assets secured by the loan agreement. Prior to selling the assetsin a public auction, the public auction is published in newspapers.

Cost (% of estate) 15.0 Main expenses will include attorneys' fees (5-10%) and court fees, including the cost of publication and notification (4-7%), as well as other smaller expenses, including fees of other professionals that may be involved in the foreclosureproceedings, such as accountants.

Recovery rate(cents on the dollar)

30.8


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Details – Resolving Insolvency in Lebanon – Measure of Quality

Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for thestrength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”Note:

Answer Score

Strength of insolvency framework index (0-16) 4.0

Commencement of proceedings index (0-3) 2.0

What procedures are available to a DEBTOR when commencing insolvency proceedings? (b) Debtor may file forliquidation only

0.5

Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (b) Yes, but a creditormay file for liquidationonly

0.5

What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a)Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the valueof its assets

(a) Debtor isgenerally unable topay its debts as theymature

1.0

Management of debtor's assets index (0-6) 2.0

Does the insolvency framework allow the continuation of contracts supplying essential goods and services to thedebtor?

No 0.0

Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? No 0.0

Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0

Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0

Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement ofinsolvency proceedings?

No 0.0

Does the insolvency framework assign priority to post-commencement credit? (c) No priority isassigned to post-commencementcreditors

0.0

Reorganization proceedings index (0-3) 0.0

Which creditors vote on the proposed reorganization plan? N/A 0.0

Does the insolvency framework require that dissenting creditors in reorganization receive at least as much aswhat they would obtain in a liquidation?

No 0.0

Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class voteseparately and are creditors in the same class treated equally?

No 0.0

Creditor participation index (0-4) 0.0

Does the insolvency framework require approval by the creditors for selection or appointment of the insolvencyrepresentative?

No 0.0

Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? No 0.0

Does the insolvency framework provide that a creditor has the right to request information from the insolvencyrepresentative?

No 0.0

Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejectingcreditors' claims?

No 0.0


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Employing Workers

presents detailed data for the employing workers indicators on the website ( ). The study does not presentrankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business.Doing Business Doing Business http://www.doingbusiness.org

The most recent round of data collection was completed in May 2019. .See the methodology for more information


(i) whether fixed-term contracts are prohibited for permanenttasks; (ii) maximum cumulative duration of fixed-term contracts;(iii) length of the maximum probationary period; (iv) minimumwage;(v) ratio of minimum wage to the average value added perworker.

Hiring

(i) maximum number of working days allowed per week; (ii)premiums for work: at night, on a weekly rest day and overtime;(iii) whether there are restrictions on work at night, work on aweekly rest day and for overtime work; (iv) length of paid annualleave.

Working hours

(i) whether redundancy can be basis for terminating workers; (ii)whether employer needs to notify and/or get approval from thirdparty to terminate 1 redundant worker and a group of 9 redundantworkers; (iii) whether the law requires employer to reassign orretrain a worker before making worker redundant; (iv) whetherpriority rules apply for redundancies and reemployment.

Redundancy rules

(i) notice period for redundancy dismissal; (ii) severancepayments, and (iii) penalties due when terminating a redundantworker. Data on the availability of unemployment protection for aworker with one year of employment is also collected.

Redundancy cost


To make the data comparable across economies, several assumptions about the worker and thebusiness are used.

- Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.- Is a full-time employee.- Is not a member of the labor union, unless membership is mandatory.

The worker:

- Is a limited liability company (or the equivalent in the economy).- Operates a supermarket or grocery store in the economy’s largest business city. For 11economies the data are also collected for the second largest business city.- Has 60 employees.- Is subject to collective bargaining agreements if such agreements cover more than 50% of thefood retail sector and they apply even to firms that are not party to them.- Abides by every law and regulation but does not grant workers more benefits than thosemandated by law, regulation or (if applicable) collective bargaining agreements.

The business:


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http://www.doingbusiness.org/

http://www.doingbusiness.org/en/methodology/labor-market-regulation

Employing Workers - Lebanon

Details – Employing Workers in Lebanon

Answer

Hiring

Fixed-term contracts prohibited for permanent tasks? No

Maximum length of a single fixed-term contract (months) 24.0

Maximum length of fixed-term contracts, including renewals (months) 24.0

Minimum wage applicable to the worker assumed in the case study (US$/month) 431.2

Ratio of minimum wage to value added per worker 0.5

Maximum length of probationary period (months) 3.0

Working hours

Standard workday 8.0

Maximum number of working days per week 5.5

Premium for night work (% of hourly pay) 0.0

Premium for work on weekly rest day (% of hourly pay) 50.0

Premium for overtime work (% of hourly pay) 50.0

Restrictions on night work? No

Restrictions on weekly holiday? No

Restrictions on overtime work? Yes

Paid annual leave for a worker with 1 year of tenure (working days) 15.0

Paid annual leave for a worker with 5 years of tenure (working days) 15.0

Paid annual leave for a worker with 10 years of tenure (working days) 15.0

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 15.0

Redundancy rules

Dismissal due to redundancy allowed by law? Yes

Third-party notification if one worker is dismissed? Yes

Third-party approval if one worker is dismissed? No

Third-party notification if nine workers are dismissed? Yes

Third-party approval if nine workers are dismissed? No

Retraining or reassignment obligation before redundancy? No

Priority rules for redundancies? Yes

Priority rules for reemployment? Yes

Redundancy cost

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.3

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 8.7

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 13.0

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 8.7

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 0.0

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 0.0


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Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 0.0

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 0.0

Unemployment protection after one year of employment? No


Page 66

Business Reforms in Lebanon

From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired byhave been implemented by economies in all regions. The following are reforms implemented since 2008.Doing Business Doing Business

DB2020

Enforcing Contracts: Lebanon made enforcing contracts easier by adopting a law that regulates all aspects of mediation as an alternative dispute resolutionmechanism.

DB2016

Registering Property: Lebanon made transferring property more complex by increasing the time required for property registration.

DB2012

Getting Electricity: Lebanon made getting electricity less costly by reducing the application fees and security deposit for a new connection.

DB2011

Starting a Business: Lebanon increased the cost of starting a business.

Getting Credit: Lebanon improved its credit information system by allowing banks online access to the public credit registry’s reports.

DB2010

Starting a Business: Lebanon made starting a business easier by eliminating the requirement to have company books stamped—though it also made it more difficultby reversing a previous reform combining tax and company registration at LibanPost.

Paying Taxes: Lebanon made paying taxes easier for companies by eliminating the requirement to obtain permission to use accelerated depreciation and by introducingelectronic payment.

DB2009

Starting a Business: Lebanon reduced the time required to start a business by streamlining the business registration process.

= reform making it easier to do business. = Change making it more difficult to do business.Doing Business


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