ABOUT LEBANON

 Amongst all the countries in Western Asia, Lebanon, officially the Lebanese Republic, is a small yet historically rich country located on the Eastern Mediterranean coast. It is renowned for its ancient Phoenician roots, its diverse mosaic of religious communities, its strategic crossroads location, and its vibrant cultural heritage. However, since late 2019, Lebanon has been experiencing a profound and multifaceted economic, financial, and political crisis, significantly impacting its stability and prosperity. The capital of Lebanon is Beirut, which is its largest and most populated city, serving as the country’s primary administrative, economic, and cultural hub, though it is grappling with significant reconstruction needs following the 2020 port explosion. According to the World Bank, Lebanon is currently classified as a Lower-Middle Income Economy, but it is enduring one of the most severe financial crises in modern history, leading to widespread poverty and contraction.

The currency of Lebanon is the Lebanese Pound (LBP). The country is suffering from severe hyperinflation and a collapse of its currency, resulting in multiple exchange rates (official, Sayrafa, and parallel market). The economy has become heavily dollarized. As of today’s parallel market rates (June 2025), 1 Indian Rupee is approximately 1,700 Lebanese Pounds (note: this rate is highly volatile and indicative of the parallel market). The population of Lebanon is estimated at approximately 5.4 million in 2024, including a significant refugee population. Its neighboring countries are Syria to the north and east, and Israel to the south. Lebanon has an extensive coastline along the Mediterranean Sea, which is vital for its trade and maritime activities. The official language of the country is Arabic. English and French are very widely spoken and understood, particularly in urban centers, business, and among the educated population, reflecting historical ties. Lebanon officially has no state religion, operating under a unique sectarian power-sharing system that includes various Christian, Muslim (Sunni and Shia), and Druze communities. Lebanon’s main international airport is Beirut-Rafic Hariri International Airport (BEY). Its main commercial seaports include Beirut Port (currently undergoing reconstruction), Tripoli Port, and Sidon Port, all crucial for the country’s limited trade.

The standard corporate income tax rate in Lebanon is generally 17% for most businesses. However, the practical application and effectiveness of tax incentives are severely hampered by the ongoing economic crisis. Historically, the Investment Development Authority of Lebanon (IDAL) has offered incentives under Investment Law No. 360 (2001), which could include corporate income tax exemptions for up to 10 years for qualifying projects, reductions in customs duties, and exemptions from building permits. While these laws remain on the books, the current macroeconomic instability, banking restrictions, and political uncertainty present immense challenges for new investments. Opesh Group of companies will be helping you in completing the Due Diligence process which includes financial planning, registration process, business options, and if required, even helping you find a Rental property for your office.

Establishing a business in Lebanon is currently highly challenging due to the severe economic and financial crisis, which has led to banking sector paralysis, currency collapse, hyperinflation, and political instability. The Investment Development Authority of Lebanon (IDAL) is the official body for investment promotion, but its capacity is significantly impacted. For foreign investors, common legal forms for business registration include a Société à Responsabilité Limitée (SARL – Limited Liability Company), a Société Anonyme Libanaise (SAL – Lebanese Joint Stock Company), or establishing a Branch Office or Representative Office. While 100% foreign ownership is technically permitted in most sectors, practical hurdles, including access to foreign currency, capital controls, and an unpredictable operating environment, pose significant risks for foreign investment.

In case an investor is planning to establish an LLC or a corporate business setup in Lebanon, Opesh Group will be helping you in taking the right decision for setting up your business in Lebanon and we will also guide you about how to follow the procedure while formulating your company in Lebanon.

Types of Business which can be started in Lebanon (with high risk/long-term recovery potential):

• Agro-Food Industry: Focus on local production and value-added processing of agricultural goods (fruits, vegetables, olives), contributing to food security and potential niche exports.
• Pharmaceuticals & Medical Supplies: Opportunities in local manufacturing to reduce dependency on imports, especially for essential medicines.
• Knowledge-Based Services: Leveraging the existing talent pool in IT, education, and healthcare, though talent retention is a major challenge.
• Renewable Energy: Small-scale solar installations and other renewable projects, driven by severe power shortages.
• Reconstruction & Basic Infrastructure: Long-term potential in rebuilding infrastructure, housing, and public services once stability and funding return.
• Niche Exports: Small-scale production of high-value, unique Lebanese products for export markets.

Advantages of Starting Business in Lebanon (primarily long-term/post-crisis):

• Strategic Location: Gateway to the Middle East, with historical trade routes.
• Highly Skilled Workforce: Historically known for its educated and multilingual workforce.
• Entrepreneurial Culture: A resilient and dynamic private sector.
• Strong Diaspora Network: A large and influential Lebanese diaspora that could play a role in future recovery.
• Reconstruction Potential: Massive opportunities for investment and development once stability is restored.

Business Opportunities for Indians in Lebanon: There are highly limited immediate business opportunities in Lebanon for new investors due to the severe ongoing crisis. However, for Indian companies with a long-term strategic view and a high-risk tolerance, specific opportunities could emerge during a potential recovery phase. Historical ties and India’s growing economic footprint in the region might facilitate future engagement. Potential areas, though currently fraught with challenges, might include:

• Pharmaceuticals: Export of essential Indian pharmaceutical products, and potentially future investment in local manufacturing if conditions stabilize.
• Agro-Food: Supply of essential foodstuffs from India and potential long-term collaboration in food processing for local markets.
• Reconstruction Efforts: Involvement in future infrastructure projects and rebuilding efforts, once financing and political stability are established.
• IT Services: Opportunities for remote IT services or limited local presence if the business environment improves and talent can be retained. Currently, trade remains significantly impacted, and new large-scale direct Indian investments are largely on hold due to the high risks.

Imports & Exports: Both imports and exports in Lebanon have been severely impacted by the economic crisis, leading to sharp declines in volumes. Imports are constrained by a severe shortage of foreign currency, while exports face challenges related to production costs, logistics, and access to international markets.

Major items which are exported from Lebanon:

• Jewellery
• Prepared foodstuffs
• Chemical products
• Base metals
• Machinery
• Agricultural products (e.g., fruits, vegetables)

Major items which are imported in Lebanon:

• Mineral fuels and oils (highly dependent on imports)
• Machinery and electrical equipment
• Foodstuffs (cereals, meat, dairy)
• Pharmaceutical products
• Vehicles
• Chemicals

Major items traded between Lebanon and India (as of 2023-2025 data, volumes significantly reduced):

• Exports from Lebanon to India: Primarily scrap metals, some chemicals, and limited agricultural products.
• Imports in Lebanon from India: Pharmaceutical products, textiles and apparel, basmati rice, tea, machinery, and various chemicals.

Manufacturing: Manufacturing in Lebanon is a small sector that has been severely hit by the economic crisis, power shortages, and difficulty in importing raw materials. It primarily comprises light industries such as food and beverage processing, pharmaceuticals, chemicals, cement, and textiles. Production is often geared towards the domestic market, but challenges have led to significant closures and reduced output.

Mining: Mining activity in Lebanon is very limited and primarily involves the extraction of non-metallic minerals used in construction, such as limestone, sand, gravel, and clay. Salt is also extracted. There are no significant metallic mineral mining operations. Offshore natural gas exploration has identified potential reserves, but development is hindered by political and economic instability, as well as border disputes.

• GDP = ~$15-20 billion (nominal, 2024 est. – highly uncertain and severely contracted due to crisis)
• GDP Growth = High uncertainty, likely continued contraction or stagnation (2024-2025 forecast by IMF/World Bank indicates continued severe challenges).
• Ease of doing business rank = The World Bank’s ‘Doing Business’ report has been discontinued. Lebanon’s business environment is currently characterized by extreme difficulties, including hyperinflation, capital controls, severe banking restrictions, and political instability, posing immense challenges for investors.
• GDP per Capita = ~$2,800 (nominal, 2024 est. – highly uncertain and severely contracted due to crisis)

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