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Offshore Companies (شركة أوف شور) occupy a distinct regime in Lebanese commercial law, governed by Legislative Decree No. 46 of 24 June 1983 — a special statute whose 13 articles override the general SAL (Société Anonyme Libanaise) rules whenever they conflict, while leaving the SAL framework as the gap-filler for everything else. An Offshore is incorporated in SAL form and remains subject to all SAL provisions of the Code of Commerce except where the Decree itself carves out a different rule. The legislator’s design objective was to make Lebanon a regional hub for cross-border trade and service operations directed at markets outside the country, paired with a privileged tax regime that exempts the Offshore from ordinary income tax on profits in favour of a fixed annual lump-sum tax.

Legislative Decree No. 46/1983 was issued under the same legislative-delegation authority that produced the Holding Companies regime on the same day — namely Law No. 36/82 of 17/11/1982 (which authorised the government to issue legislative decrees, extended by Law No. 10/83 of 21/5/1983). The Offshore regime is therefore a sibling instrument to the Holding regime, sharing the same constitutional origin but addressing a distinct policy objective: where the Holding vehicle is built around equity ownership in other companies, the Offshore vehicle is built around export-oriented trade, service operations, and intra-group management activities directed at non-Lebanese markets.

The 13-article text has seen six amendment waves over 39 years (1991–2022) — denser than the Holding regime’s four waves — three of which were enacted through annual Budget Laws rather than dedicated reform statutes. Lebanese constitutional scholarship calls this drafting practice “budget riders” (les cavaliers budgétaires, فرسان الموازنة) — substantive provisions inserted into the annual Budget Law that fall outside the constitutional definition of a budget. The Lebanese Constitutional Council has repeatedly held that such riders violate Article 83 of the Constitution and has struck down several on that basis (see, e.g., Constitutional Council Decision No. 23/2019 of 12/9/2019). Provisions that passed without timely constitutional challenge, however, remain in force as a matter of positive law — which is the case for all three Budget-Law amendments to the Offshore regime (1991, 1995, 2022).

Amendment chronology:

• Law No. 89 of 7/9/1991 (the 1991 Budget Law, amending Articles 3 and 4 of Decree 46/1983) — adjusted the SAL carve-outs in Article 3 and revised Article 4 tax provisions.
• Law No. 409 of 7/2/1995 (the 1995 Budget Law, amending Article 1) — added a fourth paragraph permitting banking and financial services performed outside Lebanon.
• Law No. 253 of 30/12/2000 (a dedicated amendment statute) — repealed the 1995 fourth paragraph, restoring the Offshore activity perimeter to its pre-1995 scope on that point.
• Law No. 19 of 5/9/2008 (a dedicated amendment statute and the most substantial of the six waves) — rewrote Articles 1, 2, 3, 5, and 6 almost in their entirety, expanded the permitted-activities list to ten paragraphs, introduced the “sole shareholder” concept for the Offshore regime, and recalibrated administrative and tax obligations.
• Law No. 85 of 10/10/2018 (a dedicated amendment statute) — further expanded the permitted-activities list in Article 1 and refined the corporate-governance carve-outs in Article 3.
• Law No. 10 of 15/11/2022 (the 2022 Budget Law, amending Articles 4, 9, and 10) — raised the fixed annual lump-sum tax from LBP 1 million to LBP 50 million, and recalibrated the penalty regime by reference to the Tax Procedures Law.

I. Permitted Activities — The Ten Categories

The activities an Offshore may engage in are exhaustively restricted to ten categories, following amendments in 1995, 2000, 2008, and 2018 (Article 1 of Legislative Decree No. 46 of 24/6/1983):

Article 1 (as amended by Law No. 409 of 7/2/1995, Law No. 253 of 30/12/2000, Law No. 19 of 5/9/2008, and Law No. 85 of 10/10/2018) — Subject to this Law are Lebanese SALs, whether multi-shareholder or composed of a sole shareholder, which exclusively engage in the following activities:

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1) Negotiating and signing contracts and agreements relating to operations and transactions executed outside Lebanese territory, concerning assets located abroad or in free customs zones.

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2) Managing companies and entities whose activity is restricted to outside Lebanon, from Lebanon, and exporting professional, administrative, and organisational services, and information-technology services and programmes of all kinds, to entities resident outside Lebanon, upon request from those entities.

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3) Triangular and multi-party foreign-trade operations conducted outside Lebanon. To that end, Offshore companies may negotiate, sign contracts, ship goods, and re-issue invoices for transactions executed outside Lebanon, or from and to the Lebanese free customs zones — including the use of the facilities available in the Lebanese free customs zones to store imported goods for the purpose of re-export.

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4) Carrying out maritime transport operations and activities.

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5) Owning shares, interests, securities, and participations in non-resident foreign entities and companies, and lending to non-resident entities in which the Offshore owns more than 20% of capital.

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6) Owning and/or benefiting from rights attached to agencies for materials and goods and from representation rights for foreign companies in foreign markets.

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7) Opening branches and representative offices abroad.

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8) Building, exploiting, managing, and owning all economic projects, except for the prohibitions set out in Article 2 of this Law.

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9) Opening credit lines and borrowing to finance the operations and activities referred to above, from banks and financial institutions resident in Lebanon or abroad.

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10) Leasing offices in Lebanon and owning the real estate necessary for its activity, subject to the law governing the acquisition of immovable rights in Lebanon by non-Lebanese persons.

The ten-category enumeration is exhaustive — any activity outside these paragraphs triggers the sanction in Article 10 (re-characterisation for tax purposes and a 50% penalty, examined below). The path from the original 1983 text (only three categories) to the current ten-category list ran through three substantive stages:

1. Original 1983 text — restricted activity to three categories: (i) negotiating and contracting for transactions executed outside Lebanon; (ii) free-customs-zone storage and leasing of offices in Lebanon; (iii) studies and consultancy for outside-Lebanon clients.
2. Law No. 409/1995 — added a fourth paragraph permitting banking and financial services and brokerage performed outside Lebanese territory. The addition was significant: it would have meaningfully expanded the Offshore’s role as a regional financial front-office. Law No. 253/2000, however, repealed this paragraph five years later — likely to preserve the Banque du Liban’s regulatory perimeter over financial activities and to prevent overlap between Offshore companies and licensed banks.
3. Law No. 19/2008 — rebuilt Article 1 from scratch into the current ten paragraphs covering negotiating, management-from-Lebanon services, triangular trade, maritime transport, equity participations in foreign entities, agency rights, branches abroad, economic projects, credit operations, and office leasing. The expansion of the management-from-Lebanon category in paragraph 2 to encompass information-technology services positioned Lebanon to compete with regional hubs hosting regional-management offices for multinational groups.
4. Law No. 85/2018 — added further refinements to paragraph 1 and opened the door to incorporation in sole-shareholder form.

II. Prohibitions and the External-Activity Perimeter

The Offshore is barred from a closed list of activities and from earning profits inside Lebanon, with two narrow carve-outs (Article 2 of Legislative Decree No. 46 of 24/6/1983):

Article 2 (as amended by Law No. 19 of 5/9/2008) — The companies covered by this Legislative Decree are prohibited from engaging in insurance operations of any kind and from the operations and activities carried out by banks, financial institutions, and all institutions subject to the oversight of Banque du Liban. They are likewise prohibited from carrying out in Lebanon any activities other than those referred to in Article 1 of this Law. They are also prohibited from deriving any profit, revenue, or income from movable or immovable assets located in Lebanon, or from providing services to entities resident in Lebanon, except for income from their bank accounts and income from subscribing to and trading in Lebanese Treasury bonds.

The prohibitions operate on three levels:

1. Absolutely prohibited: insurance of every kind, banking activities, and the activities of any institution subject to the oversight of Banque du Liban (BDL). The prohibition preserves the boundary between the Offshore regime and the licensed banking and insurance regimes.
2. Prohibited inside Lebanon: any commercial activity conducted inside Lebanon other than the activities exclusively enumerated in Article 1.
3. Prohibited in profits and income: any profit, revenue, or income from assets located in Lebanon (movable or immovable) or from services provided to entities resident in Lebanon.

The rule has two explicit carve-outs: income from bank accounts held by the company in Lebanese banks, and income from subscribing to and trading in Lebanese Treasury bonds. The carve-outs reflect a legislative trade-off: the Offshore may benefit from the Lebanese banking system as a depositor and may support the Lebanese Treasury by subscribing to its bonds, but may not itself perform banking activities.

III. SAL Form with Ten Statutory Carve-outs

The procedural backbone of the Offshore regime sits in Article 3: an Offshore is incorporated in SAL form and remains subject to SAL law for everything not addressed in the Decree, with ten specific carve-outs (after the 2008 amendment, which raised the count from five to ten, and the 2018 amendment, which added further refinements) (Article 3 of Legislative Decree No. 46 of 24/6/1983):

Article 3 (as amended by Law No. 89 of 7/9/1991, Law No. 19 of 5/9/2008, and Law No. 85 of 10/10/2018) — These companies are subject to the rules applicable to SALs in all matters not in conflict with the provisions of this Legislative Decree.

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1) The company’s bylaws must provide that the company may not engage in any activity other than those provided in Article 1 of this Legislative Decree.

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2) All bank accounts of these companies are subject to the provisions of the law promulgated by Decree No. 9976 of 1/4/1975 (the Banking Secrecy Law) and the regulatory texts issued pursuant to it. The accounts may be kept in Lebanese pounds.

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3) The company’s capital may be denominated in foreign currency, and the accounts may be kept in the same foreign currency. In the case of a sole shareholder, the company is not deemed validly incorporated until its capital is divided into equal portions represented by registered shares fully subscribed and paid up, and the amounts paid are deposited in a bank account opened in the company’s name.

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4) The members of the board of directors or the sole shareholder may be non-Lebanese, and the chairman of the board, the sole shareholder, or the person authorised to sign on behalf of the company does not require a work permit if he is a non-Lebanese non-resident. The chairmanship and membership of the board are exempt from the cap set out in Article 154 of the Code of Commerce.

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Foreign employees working in Lebanon are exempt from the work-permit requirement, provided that the company’s annual budget is not less than one billion Lebanese pounds, on pain of forfeiting this exemption.

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5) The company is not subject to the requirement set out in Article 62 of the Law on the Regulation of the Legal Profession, except where its capital exceeds fifty million Lebanese pounds or where its aggregate annual budgets exceed the equivalent of five hundred thousand US dollars.

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6) The company must appoint at least one principal auditor who is resident in Lebanon and a Lebanese national, whose appointment may be for three years. The company is exempt from the requirement of appointing a supplementary auditor.

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7) The company is registered in the General Commercial Register under the Code of Commerce, and a Special Register for the companies covered by this Legislative Decree is kept at the Beirut Court of First Instance.

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8) Notwithstanding Article 101 of the Code of Commerce, the company may limit its publications to the balance sheet of the fiscal year and the names of board members or the sole shareholder and auditors in the Special Register.

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9) The company is subject to the obligation to keep accounting records, prepare annual financial statements, file returns, and pay the taxes due to the competent income-tax authority. The company is subject to a fine of fifty thousand Lebanese pounds per month if it is late in filing the statutory return.

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10) The bylaws may provide that one person may incorporate the company, in which case that shareholder is called the “sole shareholder”. The sole shareholder may be a natural or juridical person, takes over the management of the company, exercises all the powers and responsibilities vested in the board of directors and in the ordinary and extraordinary general assembly, and signs alone all decisions taken in that capacity, provided that they are registered and published in accordance with the procedures applicable under this Law. The sole shareholder may appoint one or more managers to run the company in accordance with legal procedures.

The ten carve-outs deserve detailed examination — several were introduced for the first time in the 2008 amendment and did not exist in the 1983 original.

1. Activity Restriction in the Bylaws

The company’s bylaws must expressly state that the company may not engage in any activity outside Article 1. The declaratory obligation means a breach, if it occurs, attaches not only to the company’s actual conduct but also to the foundational text of the bylaws themselves (Article 3 §1).

2. Bank Accounts and Banking Secrecy

The Offshore’s accounts are subject to the Banking Secrecy Law (Decree No. 9976 of 1/4/1975) and its implementing regulations. The accounts may also be denominated in Lebanese pounds (not only foreign currency). The framework allows the Offshore to benefit from the statutory protection of confidentiality on financial information — a substantive element in the regime’s commercial appeal (Article 3 §2).

3. Foreign-Currency Capital and the Sole-Shareholder Rule

As in the Holding regime, the Offshore’s capital may be denominated in a foreign currency and its accounts kept in the same currency. Beyond that, the post-2018 text adds an important rule in the sole-shareholder case: a sole-shareholder Offshore is not deemed validly incorporated until its capital is divided into equal portions represented by fully subscribed and paid-up registered shares, with the paid-up amounts deposited in a bank account opened in the company’s name. The deposit requirement ensures that incorporation by a single shareholder does not collapse into a paper exercise but rests on capital that has actually been paid in and verified by banking record (Article 3 §3).

4. Exemption from the Lebanese-Director and Work-Permit Requirements

No Lebanese is required either on the board or in the sole-shareholder position. The chairman of the board, the sole shareholder, or the signatory on behalf of the company does not require a work permit if he is a non-Lebanese non-resident. The chairmanship and membership of the board are also exempt from the multiple-directorships cap set out in Article 154 of the Code of Commerce.

The provision goes further: foreign employees working in Lebanon at the Offshore are exempt from the work-permit requirement, provided that the company’s annual budget is not less than one billion Lebanese pounds. The rule makes the Offshore a practical vehicle for attracting foreign personnel to Lebanon to service regional or international operations, conditioned on the company having a meaningful economic footprint (Article 3 §4).

5. Exemption from the In-House Lawyer Requirement

Article 62 of the Law on the Regulation of the Legal Profession requires SALs to retain a permanent legal counsel in their legal relations. The Offshore is exempt from this requirement except where its capital exceeds LBP 50 million or its aggregate annual budgets exceed the equivalent of USD 500,000. The exemption reduces compliance overhead on smaller and mid-sized Offshore companies during their formation and early-operating phases (Article 3 §5).

6. Single Lebanese Auditor

The same rule applies here as in the Holding regime: the principal auditor must be a Lebanese national resident in Lebanon, with a term of three years. Both conditions are specific to the Offshore regime and are not imposed by the Code of Commerce on the ordinary SAL — which, since the amendment of Article 172 of the Code of Commerce by Law No. 126 of 29/3/2019, has a one-year renewable term capped at five consecutive years.

Limiting the appointment to a single principal auditor is now aligned with the post-2019 default rule for SALs (Article 172, current text: “an auditor or several auditors”). The Offshore is also exempt from the requirement to appoint a supplementary auditor — although this exemption has lost much of its practical meaning since the amendment of Article 173 of the Code of Commerce by Law No. 126/2019, which made the appointment of a supplementary auditor discretionary at the request of a 10% minority shareholder, rather than mandatory as under the prior text (Article 3 §6).

7-8. Special Register and Simplified Publication

A Special Register for Offshore Companies is kept at the Beirut Court of First Instance (separate from both the Holding Register and the General Commercial Register), and the mandatory publication of annual balance sheets, board members or the sole shareholder, and auditors takes place in that Special Register — rather than in the form required by Article 101 of the Code of Commerce for an ordinary SAL. The simplified-publication regime reduces compliance costs and concentrates Offshore filings in a single dedicated locus (Article 3 §§7-8).

9. Accounting Obligations and the Monthly Late-Filing Penalty

The accounting recordkeeping requirement, the annual financial-statement preparation, the return-filing duty, and the tax-payment duty all remain in force, and the late-filing penalty is fixed at LBP 50,000 per month. The amount is low in nominal terms today, but the principle of a monthly penalty for non-compliance with the filing obligation remains in force (Article 3 §9).

10. The Sole Shareholder — Full Articulation

The provision added in 2008 expressly enshrines the sole shareholder concept in the Offshore regime: the bylaws may provide that a single person (natural or juridical) may incorporate the company, and that shareholder takes over the management of the company and exercises all the powers and responsibilities vested in the board of directors and in the ordinary and extraordinary general assembly. The sole shareholder may also appoint one or more managers to run the company under standard legal procedures. The framework parallels what is available to ordinary SARLs and SALs in sole-shareholder form, making the Offshore a flexible vehicle for individual investment directed at non-Lebanese markets (Article 3 §10).

IV. Tax Regime

The tax regime is the core of the Offshore’s commercial appeal. It operates on three levels: exemption from income tax on profits, specific exemptions on movable capital revenue and other items, and a fixed annual lump-sum tax (Articles 4–6 of Legislative Decree No. 46 of 24/6/1983, with carve-outs in Articles 7 and 8).

1. Income Tax Exemption and the Fixed Annual Lump-Sum Tax

Article 4 (as amended by Law No. 89 of 7/9/1991 and by Law No. 10 of 15/11/2022) — The company is exempt from income tax on its profits and is instead subject to an annual lump-sum tax of fifty million Lebanese pounds (LBP 50,000,000), applied from the company’s first fiscal year regardless of its duration. This provision applies as of fiscal year 2022.

The historical evolution of the lump-sum tax is as follows:

• Original 1983 text — fixed annual tax of LBP 1 million, paid directly to the competent tax authority.
• Law No. 10 of 15/11/2022 — raised the tax to LBP 50 million, applicable from fiscal year 2022.

The 2022 Budget-Law amendment puts the Offshore lump-sum tax on a par with the Holding lump-sum tax, which was raised to the same LBP 50 million ceiling in the same legislative movement — unifying the two regimes’ annual flat-tax burden (Article 4).

2. Exemption from Stamp Duty

Article 5 (as amended by Law No. 19 of 5/9/2008) — Contracts and all documents signed by the company in Lebanon and relating to its activities outside Lebanon are exempt from stamp duty.

The 2008 expansion reached all documents, not only contracts as in the original 1983 text. The broadening is practically meaningful: Offshore operations typically generate a wide range of documents (bills of lading, invoices, certificates, agency contracts, and the like) — and the comprehensive stamp-duty exemption materially lowers the operating cost of cross-border transactions (Article 5).

3. Exemption from Movable Capital Revenue Tax and from Transfer and Inheritance Taxes

Article 6 (as amended by Law No. 19 of 5/9/2008) — Dividends distributed by the companies are exempt from tax on movable capital revenue. The companies are exempt from tax on movable capital revenue on their income and earnings from the investment of their funds outside Lebanon and on the interest they pay to juridical or natural persons resident abroad. The companies are also exempt from tax on amounts paid to juridical or natural persons outside Lebanon for services performed abroad, and exempt from tax on salaries and wages of employees working abroad. The company’s shares and shareholders are exempt from all transfer and inheritance taxes and from any related fees of any kind.

The 2008 expansion is substantial: what was confined under the original text to dividend distributions only is now extended to seven categories of exemption (Article 6, post-2008 text):

1. Dividend distributions to shareholders (exemption from Movable Capital Revenue Tax)
2. Income from the investment of funds outside Lebanon (exemption from Chapter III tax)
3. Interest paid to non-residents (exemption from Chapter III tax)
4. Amounts paid to non-residents for services performed outside Lebanon (exemption from outbound-payment taxes)
5. Salaries and wages of employees working abroad (exemption from Chapter II tax)
6. Company shares from transfer taxes
7. Inheritance taxes on shareholders (the shares are not subject to estate transfer duty)

This combined package of six post-2008 exemptions has made the Offshore a practical instrument for attracting foreign investment and for structuring regional family wealth.

4. Limits on the Exemption — Three Express Carve-outs

Three express carve-outs limit the general exemption (Articles 7 and 8 of Legislative Decree No. 46 of 24/6/1983):

Article 7 — Capital gains realised on the disposal by the company of its fixed assets located in Lebanon are subject to the tax set out in Article 45 of the Income Tax Law.

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Article 8 — Salaries and wages of employees working at the company are subject to the Chapter II tax of the Income Tax Law. Thirty percent of the basic salary of foreign employees working at the company is treated as a representation allowance not subject to the tax on salaries and wages.

The three limits are:

• Capital gains on the disposal of fixed assets located in Lebanon (offices, real estate where any) are subject to the tax under Article 45 of the Income Tax Law.
• Salaries and wages of employees working at the company in Lebanon are subject to Chapter II tax (salaries and wages tax).
• The 30% representation allowance for foreign employees: 30% of the basic salary is treated as a non-taxable representation allowance under Chapter II, meaning only 70% of a foreign employee’s basic salary is taxed. The rule reduces the tax burden on expatriate personnel and complements the work-permit exemption in Article 3 §4.

V. Practical Application and Procedural Controls

1. Tax Penalties

Article 9 (as amended by Law No. 10 of 15/11/2022) — The taxes due from the company are paid in a single instalment upon the filing of the return and within the deadline set for it. In the event of breach of the company’s tax obligations, the penalties set out in Law No. 44 of 11/11/2008 (the Tax Procedures Law) apply.

The 2022 amendment’s reference to the Tax Procedures Law (Law No. 44/2008) harmonised the Offshore’s penalty regime with the regime applicable to all other Lebanese companies. The original text imposed a self-contained penalty of half-per-thousand for each day of delay; the 2022 amendment abandoned that bespoke penalty and incorporated by reference the graduated penalty schedule of the Tax Procedures Law, which calibrates the penalty by reference to the nature and duration of the breach (Article 9).

2. Penalty for Breach of the Prohibitions

Article 10 (as amended by Law No. 10 of 15/11/2022) — In the event the company breaches the provisions of Article 2 of this Legislative Decree, the company becomes subject, for the fiscal year in which the breach occurred, to the income tax applicable to capital companies operating in Lebanon on the full net annual profits derived from all its activities, plus a penalty of 50% of the tax due.

The penalty mirrors the equivalent penalty in the Holding regime for breach of the company object (Article 7 of Decree 45/1983): the “Offshore” status falls away for tax purposes in the fiscal year of the breach, the company is taxed as an ordinary capital company on the full year’s profits, and a 50% penalty is added on top of the tax (Article 10).

3. Integration with the Broader Legal Framework

• Decree 46/1983 functions as a special-law regime that prevails over the general SAL rules on every point it addresses, while the general rules of the SAL, the Code of Commerce, the Income Tax Law, and the Tax Procedures Law fill any gap not covered by the Decree (Article 11).
• The executive branch is authorised to issue implementing decrees on the proposal of the Minister of Finance. An implementing decree was in fact issued in 2009 and another in 2012 to give effect to the amendments brought by Law No. 19/2008 (Article 12).

Integration with Other Laws

In addition to Legislative Decree No. 46/1983, the following components of the Lebanese legal framework apply to Offshore companies:

1. The Code of Commerce — all SAL provisions in Book II, particularly those relating to incorporation, capital, shares, the board of directors, the general assembly, financial statements, dissolution, and liquidation. The sole-shareholder rules introduced by Law No. 126/2019 to the Code of Commerce also apply, complementing the Offshore-specific sole-shareholder provisions in Article 3 of the Decree. See further 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), and The Limited Liability Company (SARL) — Legislative Decree 35/1967.
2. The Banking Secrecy Law (Decree No. 9976 of 1/4/1975) — applicable to the company’s bank accounts under Article 3 §2 of the Decree.
3. The Income Tax Law and the Tax Procedures Law (Law No. 44 of 11/11/2008).
4. The Law on the Regulation of the Legal Profession — Article 62, subject to the carve-out in Article 3 §5 of the Decree.
5. The law governing the acquisition of immovable rights in Lebanon by non-Lebanese persons — relevant to any immovable assets owned by the Offshore for its activities.
6. Law No. 75 of 27/10/2016 (as amended by Law No. 144 of 16/10/2019 and Law No. 260 of 5/8/2022) — abolished bearer and order shares for Lebanese SALs, requiring nominative form only. Since an Offshore is incorporated as an SAL, all Offshore shares must be nominative. Non-compliance carries a fine of 50% of capital, suspension of all shareholder rights for one year, and — after two years of non-conversion — transfer of the shares to the Lebanese State.

Conclusion

The Offshore Company regime, established by Legislative Decree No. 46 of 24 June 1983, is a legal framework designed to make Lebanon a regional hub for cross-border trade and service operations directed at non-Lebanese markets, paired with a substantive tax advantage: full exemption from income tax on profits, exemption from movable capital revenue tax on dividend distributions and on interest paid to non-residents, exemption from stamp duty, exemption from transfer and inheritance taxes on shares, and a 30% representation allowance for foreign-employee salaries. In return, the company is subject to a unified annual lump-sum tax of LBP 50 million (after the 2022 amendment).

The permitted activities are exhaustively restricted to ten categories under Article 1 (following the 2008 rewrite and the 2018 refinements), and cover negotiating and contracting for transactions executed outside Lebanon, management of Offshore companies and exporting professional and information-technology services, triangular foreign trade, maritime transport, participation in foreign companies, international agencies, opening branches abroad, economic projects, credit operations, and the leasing of offices in Lebanon. Any activity outside this enumeration strips the Offshore status for tax purposes in the fiscal year of the breach, with a 50% penalty on top of the ordinary tax otherwise due.

The Offshore’s administrative structure materially eases the ordinary SAL obligations: no Lebanese is required on the board or in the sole-shareholder position; no work permit is required for a non-resident foreign chairman; a partial exemption from the in-house lawyer requirement applies; a single Lebanese auditor suffices; a Special Register kept at the Beirut Court of First Instance handles registration and simplified publication of annual balance sheets. Since 2008, the Offshore may also be incorporated by a sole shareholder, natural or juridical, with full payment of capital and bank deposit of the paid-up amount — opening a flexible legal form for individual investment directed at non-Lebanese markets. The benefit of Lebanese banking secrecy completes the framework as a tool for confidentiality in regional operations.

The legislative pattern that has accompanied the Offshore regime since 1983 is marked by a density of amendment activity: six amendment waves over 39 years, three of which (1991, 1995, 2022) were enacted through annual Budget Laws, while the other three (2000, 2008, 2018) were enacted through dedicated amendment statutes. The most substantial amendment was Law No. 19/2008, which rewrote Articles 1, 2, 3, 5, and 6 and introduced the sole-shareholder concept for the first time, followed by Law No. 85/2018 which further expanded the permitted-activities list and refined the corporate-governance carve-outs. Finally, the 2022 Budget Law (Law No. 10 of 15/11/2022) raised the lump-sum tax from LBP 1 million to LBP 50 million and harmonised the penalty regime with the Tax Procedures Law.

Related Posts in This Cluster

Part of the Practical Guide to Lebanese Commercial Law — corporate forms series:

• Comparative Table: SAL, Holding, Offshore, and SARL Companies under Lebanese Law
• 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

Arabic original: الشركات المحصور نشاطها خارج لبنان (الأوف شور) في القانون اللبناني — المرسوم الاشتراعي رقم 46 تاريخ 24/6/1983