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Commercial enterprises in Lebanon operate under several legal forms, each tailored to a particular combination of purpose, business activity, capitalization, and number of participants. Four corporate forms account for the vast majority of organizational decisions: the SAL (Société Anonyme Libanaise) — Lebanon’s principal joint-stock vehicle; the Holding Company — an SAL operating under a special regime restricted to managing investments and equity participations; the Offshore Company — an SAL operating under a special regime restricted to activity outside Lebanese territory; and the SARL (Société à Responsabilité Limitée) — Lebanon’s limited-liability vehicle, designed for small- and medium-sized businesses, family enterprises, and ventures with a closed group of partners.

These four forms intersect and diverge across the disciplines of incorporation, governance, taxation, and administrative obligations. This comparative table aggregates the most consequential practical differences, working from the governing statutes as applied today following Law No. 126 dated 29 March 2019 (amending the Lebanese Code of Commerce) and the Annual Budget Law for 2022 (Law No. 10 dated 15 November 2022, enforceable sub silentio) — which substantially reworked the holding-company and offshore regimes.

A note on legislative context: The holding and offshore regimes were enacted as two Legislative Decrees issued on 24 June 1983 — predating the 2019 amendments to the Code of Commerce by thirty-six years. Because these two regimes cross-reference numerous numbered articles of the Code of Commerce (Article 101, Article 172, Article 173, Article 154, and so on), some of the “special exemptions” set forth in the two regimes’ texts have lost much of their practical force following the 2019 amendments to the general rules in the Code of Commerce. We highlight this transparently where it arises.

Other ancillary statutes form part of the same regulatory landscape — in particular the Income Tax Law (Article 32 imposing a 17% rate on the profits of capital companies; Article 45 on capital gains; Article 72 imposing a general 10% rate on revenues from movable capital; and Article 72 bis subjecting distributions by Lebanese capital companies to the same 10% rate “in all cases”); the Tax Procedures Law (Law No. 44 dated 11 November 2008); and the Law Regulating the Legal Profession (Article 62, on mandatory legal representation for SALs).

For deeper treatment of each form, see the related cluster posts:

• The Joint Stock Company — Part 1: Formation, Documents, and Securities (Articles 77–143)
• The Joint Stock Company — Part 2: Operations, Dissolution, and Mergers (Articles 144–225 + Book IX)
• Convertible Bonds — SAL Supplement (Legislative Decree 54/1977)
• The Limited Liability Company (SARL) — Legislative Decree 35/1967
• Holding Companies — Legislative Decree 45/1983
• Offshore Companies — Legislative Decree 46/1983

The Arabic original of this comparative table is available at: جدول مقارن لأبرز خصائص الشركة المغفلة والقابضة (هولدنغ) والأوف شور والمحدودة المسؤولية في القانون اللبناني.

I. The Governing Legislative Frameworks

Before turning to the operational details, a quick map of the governing texts for each of the four forms:

II. Incorporation

The four forms share the basic obligation to register with the Commercial Register, but they diverge on the minimum share capital, the minimum number of partners, and the place of registration (the general register or the special register for holding or offshore companies).

Note: The nominal monetary amounts of registration fees vary under subsequent fiscal legislation and fluctuate with the actual value of the currency. We therefore reference only the categories of fees that apply, not specific numerical amounts. Parties undertaking incorporation should consult a qualified accountant or licensed attorney to obtain the current applicable amounts at the time of formation.

III. Partners and Shareholders

The four forms share the foundational capital-company principle: liability limited to the contribution. They diverge, however, on rights of inspection before the general assembly, transferability conditions, and rights of pre-emption.

Note: The fundamental distinction in transferability between SARL quotas and the shares of the three share-based forms stems from the nature of the SARL quota itself: it is not a negotiable instrument like a share. The statute therefore imposes the collective consent threshold (3/4) + mandatory pre-emption as a safeguard for the stability of the personal composition of the company. This personal character of the SARL is legislatively intentional and distinguishes the form from the SAL, which is built around capital more than around the identity of its participants.

IV. Nature of Shares and Quotas

Note: The absence of negotiability of SARL quotas explains why the statute requires 3/4 capital approval for transfer to non-partners, and the prohibition on public subscription. By contrast, in the three other forms, shares are flexible financing instruments; the holding and offshore forms in particular have specialized regimes for issuing debt securities matched to the nature of their activity.

V. Management

The four forms diverge significantly on management structure, particularly after the 2019 amendments to the Code of Commerce, which substantially restructured SAL governance: introducing the possibility of separating board chairmanship from general management, easing the Lebanese-nationality requirement for board members, and permitting remote board meetings via electronic communication.

Note: The cumulative effect of the 2019 amendments on SAL governance was transformative. Three notable shifts: (1) the Lebanese-nationality threshold was reduced from a majority to one-third (Article 144); (2) board membership was opened to non-shareholders (Article 147); (3) the relationship between chairmanship and general management was restructured (Article 153). Each of these narrows the practical gap that previously distinguished the classical SAL from the holding and offshore forms in the area of nationality requirements.

VI. The Statutory Auditor

Prior to 2019, the SAL Statutory Auditor regime rested on a primary auditor (appointed for a one-year renewable term) plus an additional auditor (appointed mandatorily by the President of the First-Instance Chamber upon application by the Board of Directors). The 2019 amendments to Articles 172 and 173 of the Code of Commerce recalibrated this system — which in turn affects the exemptions previously enjoyed by holding and offshore companies under their special-regime statutes.

Note: Before the 2019 amendments, the central difference in audit between the ordinary SAL and the holding/offshore forms lay in the exemption from the additional auditor (which was mandatory in the ordinary SAL). After the 2019 amendments, the additional auditor became optional in the ordinary SAL (appointed only on application by shareholders holding 10% of capital), so this exemption in the holding and offshore forms has become less substantive than it once was. The exceptions that remain meaningful in the holding and offshore forms are the Lebanese-nationality + residency requirement on the primary auditor plus the ability to extend the auditor’s term to three years (versus one year renewable in the ordinary SAL).

A note on SARL: A meaningful distinction must be drawn between the legal rule and the administrative reality for SARL audit. The statute (Article 30 of Legislative Decree 35/1967) imposes a Statutory Auditor only in the three cases identified in the table. However, the Ministry of Finance’s requirements for the annual tax declaration make audit a near-universal practical reality in most SARLs, including those that fall outside any of the three statutory triggers. This distinction between statutory requirement and administrative practice should be taken into account when planning the formation budget and annual operating cost of a new SARL — relying on the statutory minimum alone is rarely sufficient.

VII. Accounting and Publication

The 2019 amendments to Article 101 brought a substantial simplification to SAL publication obligations, eliminating the prior requirement to publish in the Official Gazette, in the economic press, and in local daily newspapers — replaced by a deposit at the competent Commercial Register. This simplification made some of the publication exemptions previously enjoyed by holding and offshore companies less distinctive on the ground.

Note: The area most affected by the 2019 amendments is the simplification of SAL public-publication obligations. Before amendment, the Board of Directors had to publish annually — in the Official Gazette + one economic newspaper + one local daily newspaper — the fiscal-year balance sheet + names of board members + names of auditors (Article 101 as originally drafted). After amendment, deposit at the Commercial Register suffices for all SALs. The “simplification” that the holding and offshore forms previously enjoyed under Articles 5(6) and 3(8) of Legislative Decrees 45/1983 and 46/1983 has therefore become the general rule for all SALs today.

VIII. Tax Regime

The tax regime is the most substantively differentiating area among the four forms. The Annual Budget Law for 2022 (Law No. 10 dated 15 November 2022, enforceable sub silentio) introduced substantial amendments to the flat tax in both the holding and offshore regimes, raising the cap to LBP 50 million in each and unifying the two regimes. We note that these successive tax amendments (1991, 1995, 2022) were enacted through three successive Annual Budget Laws — a familiar Lebanese legislative pattern when special tax regimes are involved.

A note on the legislative pattern of tax amendments: Of four substantive amendments to the holding-company regime and six to the offshore regime, three holding-company amendments and three offshore amendments were enacted as provisions embedded within annual Budget Laws (1991, 1995, 2022). Lebanese constitutional doctrine designates such embedded amendments as budget law riders (فرسان الموازنة — les cavaliers budgétaires): provisions that “fall outside the constitutional scope of an annual budget law and are nevertheless inserted into its text.” The Lebanese Constitutional Council has held that this practice contravenes Article 83 of the Constitution and has annulled riders on that basis (e.g. Decision 23/2019 dated 12 September 2019). Riders that pass without timely constitutional challenge, however, remain legally in force. The 2022 amendment unifying the flat tax for holding and offshore companies at LBP 50 million per annum is, in this light, a notable step toward harmonizing the tax treatment of the two regimes.

IX. Other Obligations

The four forms differ on several secondary but practically consequential administrative obligations — most notably mandatory legal counsel, work permits for foreign employees, and value-added tax.

X. Choosing the Form by Need

No form is “best” in absolute terms; the choice depends on the nature of the activity, the available share capital, the number of investors, and the desired tax regime.

Conclusion

The major legislative reforms Lebanon has undergone in commercial company law in recent years — particularly Law No. 126 dated 29 March 2019 amending the Code of Commerce, and Law No. 10 dated 15 November 2022 (the 2022 Annual Budget Law, enforceable sub silentio) amending the holding and offshore regimes — have narrowed some traditional differences between the four forms and widened others. Three methodological observations should inform any selection among the forms:

1. The four forms are not equally up-to-date legislatively. The SAL and SARL are governed by texts updated by Law 126/2019; the holding and offshore regimes are governed by 1983 Legislative Decrees amended piecemeal, most recently by the 2022 Budget Law. When applying a provision of a holding or offshore special regime, it is therefore worth verifying whether the Code of Commerce article it cross-references has itself been amended in 2019 — as this may reduce some of the regime’s “special exemptions” relative to the picture at the time the original Legislative Decrees were enacted.
2. The Lebanese legislative pattern of enacting tax amendments through Annual Budget Laws is known in constitutional doctrine as budget law riders (فرسان الموازنة — les cavaliers budgétaires). It is a familiar phenomenon in Lebanese legislative practice and should not be conflated with separately enacted standalone amendment statutes. Amendments embedded within a Budget Law retain their legal force as amending provisions once the Budget Law takes effect, unless they are challenged before the Constitutional Council within the constitutional time limits and annulled for violation of Article 83 of the Constitution.
3. Choosing a form requires balancing several factors — available capital, number of investors, nature of activity (domestic vs. foreign), forward-looking investor appetite, and desired tax regime. There is no universally correct answer; consultation with a qualified Lebanese lawyer or experienced accountant is recommended before any final decision.

Closing note: This comparative table is intended to render legal information accessible to a general readership and is not a substitute for specialized legal advice in any specific case. Legislative provisions may be amended after the publication date of this article; readers are encouraged to verify the current state of the law at the time of any practical application.

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Authoritative text: Arabic is the authoritative language of Lebanese statutory law. This English version is provided for guidance only; in any matter of legal application, reference must be made to the Arabic text of the governing statute.