Lebanon Economy Profile - Doing Business 2019
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Doing Business 2019 Lebanon
Economy Profile
Lebanon
Page 1
Doing Business 2019 Lebanon
Economy Profile of Lebanon
Doing Business 2019 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 safety mechanisms 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 the transparency 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 post-filing processes
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 for insolvency
Labor market regulation Flexibility in employment regulation and aspects of job quality
Page 2Doing Business 2019 Lebanon
About Doing Business
The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected
cities at the subnational and regional level.
The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying
to them through their life cycle.
Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative
indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit,
protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also
measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market
regulation indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does
present the data for these indicators.
By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time,
Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves
as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy.
In addition, Doing Business offers detailed subnational reports, which exhaustively cover business regulation and reform in different cities and
regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve
performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region
and with the 190 economies that Doing Business has ranked.
The first Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets
and 190 economies. Most indicator 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 Doing Business also collected data for 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 from feedback from
governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving
the regulatory environment for business around the world.
More about Doing Business (PDF, 5MB)
Page 3Doing Business 2019 Lebanon
Ease of Doing Business in DB 2019 Rank
Region Middle East & North Africa
190 1
Lebanon
Income Category Upper middle income 142
DB 2019 Ease of doing business score
Population 6,082,357
0 100
City Covered Beirut 54.04
DB 2019 Ease of Doing Business Score
0 100
63.50: Saudi Arabia (Rank: 92)
60.98: Jordan (Rank: 104)
58.56: Egypt, Arab Rep. (Rank: 120)
58.30: Regional Average (Middle East & North Africa)
54.04: Lebanon (Rank: 142)
41.57: Syrian Arab Republic (Rank: 179)
Note: The ease of doing business score captures the gap of each economy from the best regulatory performance observed on each of the indicators across all economies
in the Doing Business sample since 2005. An economy’s ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100
represents the best performance. The ease of doing business ranking ranges from 1 to 190.
Rankings on Doing Business topics - Lebanon
1
28
55
82
Rank
105
109 113
124 124
135
136 140
146 150 151
163 170
190
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Ease of Doing Business Score on Doing Business topics - Lebanon
100
78.63
80
67.94
62.75
59.44 57.90
Score
60
52.69
49.85
40.00 41.67
40
29.55
20
0
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Page 4Doing Business 2019 Lebanon
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 and formally operate in each economy’s largest business city.
To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has
start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10
and 50 people one month after the commencement of operations, 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 one company 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 their scores for starting a
business. These scores are the simple average of the scores for each of the component indicators.
The most recent round of data collection for the project was completed in May 2018. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally start and formally operate To make the data comparable across economies, several assumptions about the
a company (number) business and the procedures are used. It is assumed that any required information is
readily available and that the entrepreneur will pay no bribes.
• Preregistration (for example, name verification or
reservation, notarization)
The business:
• Registration in the economy’s largest business - Is a limited liability company (or its legal equivalent). If there is more than one type
city
of limited liability company in the economy, the most common among domestic firms
• Postregistration (for example, social security is chosen. Information on the most common form is obtained from incorporation
registration, company seal) lawyers or the statistical office.
- Operates in the economy’s largest business city. For 11 economies the data are
• Obtaining approval from spouse to start a
business or to leave the home to register the also collected for the second largest business city.
company - The entire office space is approximately 929 square meters (10,000 square feet).
- Is 100% domestically owned and has five owners, none of whom is a legal entity;
• Obtaining any gender specific document for has a start-up capital of 10 times income per capita and has a turnover of at least
company registration and operation or national 100 times income per capita.
identification card
- Performs general industrial or commercial activities, such as the production or sale
of goods or services to the public. The business does not perform foreign trade
Time required to complete each procedure
activities and does not handle products subject to a special tax regime, for example,
(calendar days)
liquor or tobacco. It does not use heavily polluting production processes.
• Does not include time spent gathering - Leases the commercial plant or offices and is not a proprietor of real estate and the
information amount of the annual lease for the office space is equivalent to the income per
capita.
• Each procedure starts on a separate day (2
procedures cannot start on the same day) - Does not qualify for investment incentives or any special benefits.
- Has at least 10 and up to 50 employees one month after the commencement of
• Procedures fully completed online are recorded operations, all of whom are domestic nationals.
as ½ day - Has a company deed that is 10 pages long.
• Procedure is considered completed once final
document is received The owners:
• No prior contact with officials - Have reached the legal age of majority. If there is no legal age of majority, they are
assumed to be 30 years old.
Cost required to complete each procedure (% of - Are sane, competent, in good health and have no criminal record.
income per capita) - Are married and the marriage is monogamous and registered with the authorities.
- Where the answer differs according to the legal system applicable to the woman or
• Official costs only, no bribes man in question (as may be the case in economies where there is legal plurality), the
• No professional fees unless services required by answer used will be the one that applies to the majority of the population.
law or commonly used in practice
Paid-in minimum capital (% of income per
capita)
• Funds deposited in a bank or with third party
before registration or up to 3 months after
incorporation
Page 5Doing Business 2019 Lebanon
Starting a Business - Lebanon
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 & OECD high Best Regulatory
North Africa income Performance
Procedure – Men (number) 8 7.2 4.9 1 (New Zealand)
Time – Men (days) 15 20.5 9.3 0.5 (New Zealand)
Cost – Men (% of income per capita) 40.0 22.6 3.1 0.0 (Slovenia)
Procedure – Women (number) 8 7.9 4.9 1 (New Zealand)
Time – Women (days) 15 21.2 9.3 0.5 (New Zealand)
Cost – Women (% of income per capita) 40.0 22.6 3.1 0.0 (Slovenia)
Paid-in min. capital (% of income per capita) 38.9 8.1 8.6 0.0 (117 Economies)
Figure – Starting a Business in Lebanon and comparator economies – Ranking and Score
DB 2019 Starting a Business Score
0 100
84.43: Jordan (Rank: 106)
84.11: Egypt, Arab Rep. (Rank: 109)
82.00: Regional Average (Middle East & North Africa)
80.99: Syrian Arab Republic (Rank: 136)
80.07: Saudi Arabia (Rank: 141)
78.63: Lebanon (Rank: 146)
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 of the scores for each of the component indicators.
Page 6Doing Business 2019 Lebanon
Figure – Starting a Business in Lebanon – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
30
14
Cost (% of income per capita)
25
12
10 20
Time (days)
8
15
6
10
4
5
2
0 0
1 2 3 4 5 6 *7 *8
Procedures (number)
* 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 the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 7Doing Business 2019 Lebanon
Details – Starting a Business in Lebanon – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Designate a Lebanese lawyer 1 day LBP 3,000,000
Agency : Lawyer (attorney startup
Each newly formed company must retain and pay an attorney on an annual fees) + LBP 150,000
basis. On April 26 2012, the Beirut Bar Association increased the minimum
(Legalization of the
annual retainer to LBP 9,000,000 effective as of January 2013. This retainer can
Power of Attorney
be paid by the company during the year. Startup fees are set by the Beirut Bar
before the Bar
Association at LBP 3,000,000.
Association)
2 Deposit the capital in a bank 2 days no charge
Agency : Bank
This procedure can be carried out on the basis of a signed and notarized copy of
the articles of association.
3 Register at the Company Registry 2 days see comments
Agency : Commercial Register
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 its activities
Fee schedule for company registration:
• Tax for the magistrates’ mutual fund: LBP 375,000 lump tax + 0.15% of the
capital+ LBP 1,000 flat registration fee + LBP 500 application fee + LBP 1,000
certified copy + LBP 500 commercial publication fee
• Stamp duty: equal to 0.4% of capital + LBP 750,000 lump sum stamp duty +
LBP 2,000 flat registration 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.
4 Notify the Ministry of Finance of commencement of business operations 2 days no charge
Agency : Ministry of Finance
Within 2 months of registration, the company must submit a notification of
commencement of business activities to the Ministry of Finance in order to
register for income tax and VAT.
5 Register at the National Social Security Fund (NSSF) 1 day no charge
Agency : National Social Security Fund
This procedure has two functions: “Registration” of a new employee and
“Confirmation” by the system.
The “Registration” function entails submitting a file for each new employee at the
NSSF regional office closest to the company premises and obtaining a file
reference number (or a receipt acknowledging the registration) immediately upon
the submission. Once this “Registration” function is completed, the business is
considered to have fulfilled its legal obligations with the NSSF. The benefits to
the newly registered employees, under NSSF rules, will also become
immediately effective. The Time to complete this procedure is 1 day at no cost to
the employer or the employee.
The “Confirmation” function consists of issuing a hard copy document (printed on
a special size sheet) in the name of the registered employee along with his/her
unique NSSF ID. Due to the lack of printing equipment at NSSF, the confirmation
documents are printed in batches every few days or so. Therefore, it could take
up to 30 days for a confirmation sheet to be received by the newly registered
employee.
6 File internal labor regulations (règlement intérieur) with the Ministry of 1 day no charge
Labor
Agency : Ministry of Labor
When the number of employees at a company reaches 15 then the company will
have to file internal labor regulations (règlement intérieur) with the Ministry of
Labor according to Art. 66 of the Labor Code.
Page 8Doing Business 2019 Lebanon
7 Register for VAT one week no charge
Agency : VAT Department (simultaneous with
Registration for VAT is done at the VAT Department. To obtain a VAT certificate previous procedure)
of registration, it may 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 both departments is free of charge.
8 Obtain a company seal 1 day (simultaneous LBP 20,000-35,000
Agency : Seal maker with previous
Although not mandated by law, the majority of companies prefer to have procedure)
company stamps.
they can be order at any seal-making company.
Takes place simultaneously with previous procedure.
Page 9Doing Business 2019 Lebanon
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 building quality control index, evaluating the quality of building regulations, the strength of
quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of
data collection was completed in May 2018. See the methodology for more information
What the indicators measure Case study assumptions
Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the
(number) construction company, the warehouse project and the utility connections are used.
• Submitting all relevant documents and obtaining The construction company (BuildCo):
all necessary clearances, licenses, permits and
certificates - Is a limited liability company (or its legal equivalent) and operates in the economy’s
largest business city. For 11 economies the data are also collected for the second
• Submitting all required notifications and receiving largest business city.
all necessary inspections
- Is 100% domestically and privately owned; has five owners, none of whom is a
• Obtaining utility connections for water and legal entity. Has a licensed architect and a licensed engineer, both registered with
sewerage the local association of architects or engineers. BuildCo is not assumed to have any
other employees who are technical or licensed experts, such as geological or
• Registering and selling the warehouse after its
completion topographical experts.
- Owns the land on which the warehouse will be built and will sell the warehouse
Time required to complete each procedure upon its completion.
(calendar days)
The warehouse:
• Does not include time spent gathering
information - 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
• Each procedure starts on a separate day— approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3
though procedures that can be fully completed
meters (9 feet, 10 inches) high and will be located on a land plot of approximately
online are an exception to this rule
929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the
• Procedure is considered completed once final warehouse is valued at 50 times income per capita.
document is received - Will have complete architectural and technical plans prepared by a licensed
architect. If preparation of the plans requires such steps as obtaining further
• No prior contact with officials
documentation or getting prior approvals from external agencies, these are counted
Cost required to complete each procedure (% of as procedures.
income per capita) - Will take 30 weeks to construct (excluding all delays due to administrative and
regulatory requirements).
• Official costs only, no bribes
The water and sewerage connections:
Building quality control index (0-15)
- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there
• Quality of building regulations (0-2) is no water delivery infrastructure in the economy, a borehole will be dug. If there is
• Quality control before construction (0-1) no sewerage infrastructure, a septic tank in the smallest size available will be
installed or built.
• Quality control during construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average
• Quality control after construction (0-3) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of
1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300
• Liability and insurance regimes (0-2) gallons) a day.
• Professional certifications (0-4) - Will have a constant level of water demand and wastewater flow throughout the
year; will be 1 inch in diameter for the water connection and 4 inches in diameter for
the sewerage connection.
Page 10Doing Business 2019 Lebanon
Dealing with Construction Permits - Lebanon
Standardized Warehouse
Estimated value of warehouse LBP 643,352,551.10
City Covered Beirut
Indicator Lebanon Middle East & OECD high Best Regulatory
North Africa income Performance
Procedures (number) 22 16.6 12.7 None in 2017/18
Time (days) 277 137.4 153.1 None in 2017/18
Cost (% of warehouse value) 7.1 4.7 1.5 None in 2017/18
Building quality control index (0-15) 13.0 12.1 11.5 15.0 (3 Economies)
Figure – Dealing with Construction Permits in Lebanon and comparator economies – Ranking and Score
DB 2019 Dealing with Construction Permits Score
0 100
75.71: Saudi Arabia (Rank: 36)
71.77: Egypt, Arab Rep. (Rank: 68)
60.47: Jordan (Rank: 139)
59.17: Regional Average (Middle East & North Africa)
52.69: Lebanon (Rank: 170)
0.00: Syrian Arab Republic (Rank: 186)
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 scores are the simple average of the scores for each of the component indicators.
Figure – Dealing with Construction Permits in Lebanon – Procedure, Time and Cost
Time (days) Cost (% of warehouse value)
2
250 Cost (% of warehouse value)
1.5
200
Time (days)
150
1
100
0.5
50
0 0
1 *2 *3 4 5 *6 7 8 9 10 11 12 13 * 14 15 16 17 18 * 19 * 20 21 22
Procedures (number)
* 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 the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 11Doing Business 2019 Lebanon
Figure – Dealing with Construction Permits in Lebanon and comparator economies – Measure of Quality
15 14.0
13.0
12.0 12.1
11.0
Index score
10
5
0
No Practice
Lebanon Egypt, Arab Rep. Jordan Saudi Arabia Syrian Arab Republic Middle East & North Africa
Details – Dealing with Construction Permits in Lebanon – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain a geotechnical study / soil test 15 days USD 2,225
Agency : Geotechnical engineer
BuildCo will request a soil test for the structural calculations for the foundation.
While the soil test is not required by law, it is done in practice as it is used for the
structural calculations for the foundation.
2 Obtain a recent planning certificate 10 days LBP 24,600
Agency : Directorate General of Urban Planning (DGU)
BuildCo must submit a recent planning certificate (they are usually valid for 3
months) among the necessary documents to request a building permit. BuildCo
must have a receipt from the municipality and should pay the value of the stamps
for this procedure.
The cost is as follows:
1- Land certificate stating the dimension and the content of the land: LBP 10,500
2- Cadastral plan showing the positioning of the land: LBP 10,000
3- Receipt from the municipality of the planning certificate: LBP 4,100
3 Obtain a topographic study 7 days USD 500
Agency : Topographic engineer
BuildCo needs to obtain a topographic study at the beginning of the construction
in order to have accurate details about the levels and limitations of the land plot.
This study is required for the construction permit application.
4 Hire a technical auditor and obtain approval of drawings 3 days USD 5,000
Agency : Technical Auditor
Based on Decision No. 1/1192 dated November 23, 2012, companies must hire a
technical auditor accredited by the government who must review 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
construction phase, the auditors must also ensure that construction works are
duly performed through inspections at different stages of the construction. And
upon completion of the works, they must attest that the construction work was
carried out properly.
5 Obtain approval of file by Order of Engineers (where engineer is registered) 4 days LBP 1,950,900
and pay duties to Order
Agency : Beirut Order of Engineers
The file must be submitted to the Order of Engineers if the engineer is registered
(Beirut Order of Engineers or Tripoli Order of Engineers). The file should include
the following:
• A construction permit application signed by that same civil engineer or architect
jointly with the real estate owner,
• The design plans,
• An agreement between the property owner and the architect or engineer
responsible for the project described.
In order to be submitted as part of the application for a building permit, the file
must bear the seal and registration number of the relevant Order of Engineers.
The Order of Engineers meets twice a week.
A fee schedule for the permit to start construction works from the Order of
Architects and Engineers has been implemented in Beirut since 2010:
• For the area between 1 and 3,000 sq. m., the cost is de LBP 1,500.00 per sq.
m.
• For the area between 3,001 and 6,000 sq. m., the fee is LBP 3,000.00 per sq.
m.
• For the area between 6,001 and 9,000 sq. m., the fee is LBP 4,500.00 per sq.
m.
• Above 9,001sq. m., the fee is LBP 6,000.00 per sq. m.
Page 12
The cost is LBP 1,950,900.00.Doing Business 2019 Lebanon
6 Request and receive inspection from Électricité du Liban for approval 15 days no charge
Agency : 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 a document that shows the parcel’s value as they will
need this to issue the approval, then you must go to the Electricity company to
see if Electricite du Liban will be able to supply electricity
Before submitting the building permit application, Electricité du Liban has to verify
if the construction site can be connected to an electrical post or transformer.
7 Submit building permit application to Urban Development Department 1 day no charge
Agency : Urban Development Department, Directorat Général d'Urbanisme
(DGU)
BuildCo must submit the file described in the previous procedure to the Urban
Development Department. In Beirut and Tripoli, the file is referred to the
municipal engineering departments. The process takes up to 6 months. The
Urban Development Department is a subdivision of the Directorate General of
Urbanism.
8 Request and receive pre–approval inspection from Urban Development 40 days no charge
Department
Agency : Urban Development Department, Directorat Général d'Urbanisme
(DGU)
The Urban Development Department inspects the property and the plans to
ensure that they are consistent with the construction laws and regulations, and
then issues its clearance for the issuance of the building permit and calculates
the building permit taxes. The inspection itself is completed in a day, but it takes
a while from the date BuildCo requests the inspection until the date the inspector
arrives.
9 Pay building permit taxes to the municipality 1 day LBP 10,316,123
Agency : Municipality
The Urban Development Department refers the file to the relevant municipality (in
the case of the city of Beirut, to the Administrator of the City of Beirut). The
municipality collects the construction permit taxes and issues the construction
permit in the name of the property owner. Payment is made at the municipality.
According to Decree No. 60 of 1988 on Municipal Taxes, the building permit
taxes paid to the Municipality are a certain value per square meter of the
building. However, this value per square meter is calculated based on the value
of 1 square meter of construction as follows:
- From the value of LBP 1 - 25,000: 1.5% of the construction value of 1 square
meter
- From the value between LBP 25,000 - 100,000: 2% of the construction value of
1 square meter
- From the value greater than LBP 100,000: 1% of the construction value of 1
square meter
In the case of Doing Business, the value of 1 square meter of construction is the
total construction value / 1,300.6 sq. m.
Therefore, the value per square meter without taxes to be paid is calculated as
follows: (1.5% * 25,000) + (2% * 75,000) + (1% * [total construction value -
100,000]).
Then a 15% municipal tax is added to the value above + 0.05% of the
construction value of 1 square meter to obtain the total value to be paid per sq.
m. as a municipal contribution.
A second tax of 12% of the value above must be paid per square meter as a
national tax.
A contribution of 5% of the value above must be paid per square meter to the
Order of Engineers and Architects.
Therefore, the above values would all be added to obtain the total cost per
square meter paid to the municipality for all building permit fees, which is then
multiplied by 1,300.6 sq. m. for the purposes of the Doing Business case study.
10 Obtain building permit 120 days no charge
Agency : Municipality
By law, construction work can start if no decision about the building permit
application has been made 15 days after the submission date. In practice,
however, this is not applied, and people wait 4 months on average.
11 Obtain starting order permit from Order of Engineers 3 days LBP 200,000
Agency : Beirut Order of Engineers
To start construction the engineer and/or architect must pay the dossier fee
according to the number of professionals involved in the construction work (civil
engineer, mechanic engineer, electrical engineer, geotechnical engineer, among Page 13
others). The fee should not exceed LBP 200,000.00Doing Business 2019 Lebanon
13 Request and receive inspection from the Water of Beirut and Mount 10 days no charge
Lebanon for water connection
Agency : Water of Beirut and Mount Lebanon
With follow-up, it takes 10 days from the time an inspection is requested until an
inspection begins. Without follow-up, however, the inspection might never take
place.
Request and receive inspection from the Municipality of Beirut for sewage 10 days no charge
14 Agency : Municipality of Beirut
While the inspection for water connection is done by the Water of Beirut and
Mount Lebanon agency, the inspection for sewage connection is done by the
Municipality of Beirut. Both inspections can be done simultaneously.
With follow-up, it takes 10 days from the time an inspection is requested until an
inspection begins. Without follow-up, however, the inspection might never take
place.
15 Submit application and receive approval for an occupancy permit from the 4 days LBP 300,000
Order of Engineers
Agency : Beirut Order of Engineers
Following completion of construction, an application for approval of an occupancy
permit must be submitted to the Order of Engineers. The Order must give a
written and stamped approval first.
16 Submit application and receive approval for an occupancy permit from the 1 day no charge
Directorate General of Urban Planning (DGU)
Agency : Urban Development Department, Directorate General of Urban
Planning (DGU)
Once construction has been completed, an application for approval of an
occupancy permit must be submitted to the Urban Development Department.
The Urban Development Department performs an on-site inspection of the
building to ensure that it is in compliance with the construction permit and
approved plans.
The application for an occupancy permit must be accompanied by the plans
related to the completed construction, signed by the engineer in charge, and
stamped by the Order of Engineers. Following the clearance from the Urban
Development Department, the file is forwarded to the relevant municipality (in the
case of Beirut, to the Administrator of the City of Beirut) that will issue the
occupancy permit in the name of the property owner. According to the law, the
occupancy permit must be issued within a month. However, this time limit is not
enforced in practice.
17 Receive on-site inspection from the Directorate General of Urban Planning 1 day no charge
(DGU)
Agency : Urban Development Department, Directorate General of Urban
Planning (DGU)
It takes about a week to schedule the inspection.
18 Obtain occupancy permit 45 days LBP 25,000
Agency : Urban Development Department, Directorate General of Urban
Planning (DGU)
By law, the time limit for the procedure is 30 days, but in practice, it takes much
longer to obtain the occupancy permit -- about 45 days with follow-up.
Obtain water connection 14 days LBP 2,260,000
19 Agency : Water of Beirut and Mount Lebanon
BuildCo must submit an application for water connection accompanied by various
documents.
Obtain sewage connection 14 days USD 7,500
20 Agency : Municipality
21 Receive onsite inspection from the Ministry of Finance and obtain estimate 1 day LBP 5,000
of leasing value of the warehouse
Agency : Ministry of Finance
Once the occupancy permit is issued, an inspector from the Ministry of Finance
visits the site to prepare an estimate of the leasing value of the warehouse. This
estimate is necessary to register the building.
22 Register the building with the Real Estate Registry 14 days LBP 7,122,702
Agency : Real Estate Registry
According to Tables 1 and 2 attached to the Decree Law No. 148 dated
12/6/1959 and its amendments, the registration fees consist of: (i) 1% of the
leasing value of the warehouse (ii) minor taxes such as topography tax
(approximately LBP 250,000) and deed and contract taxes (approximately LBP
100,000). There is an additional Municipality tax (5% of the total taxes in the
aforementioned costs above), provided in Article 90 of the Law of the Municipality
Duties and Taxes No. 60/88 dated 12/8/1988 and its amendments.
Page 14
Takes place simultaneously with previous procedure.Doing Business 2019 Lebanon
Details – Dealing with Construction Permits in Lebanon – Measure of Quality
Answer Score
Building quality control index (0-15) 13.0
Quality of building regulations index (0-2) 2.0
How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0
Free of charge.
Which requirements for obtaining a building permit are clearly specified in the building List of required 1.0
regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees
to be paid;
Required
preapprovals.
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 Licensed 1.0
compliance with existing building regulations? (0-1) architect;
Licensed
engineer; Private
firm.
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? Inspections by 1.0
(0-2) external engineer
or firm;
Unscheduled
inspections;
Inspections at
various phases.
Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0
inspections are
always done in
practice.
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 Yes, final 2.0
with the approved plans and regulations? (0-2) inspection is
done by
government
agency; Yes,
external engineer
submits report for
final inspection.
Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0
always occurs in
practice.
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 Architect or 1.0
once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer;
Professional in
charge of the
supervision;
Construction
company; Owner
or investor.
Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 1.0
structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law
or Decennial Insurance)? (0-1) to obtain
insurance ;
Owner or
investor;
Insurance is
commonly taken
in practice.
Professional certifications index (0-4) 3.0
Page 15Doing Business 2019 Lebanon
What are the qualification requirements for the professional responsible for verifying that the Minimum number 2.0
architectural plans or drawings are in compliance with existing building regulations? (0-2) of years of
experience;
University degree
in architecture or
engineering;
Being a
registered
architect or
engineer.
What are the qualification requirements for the professional who supervises the construction University degree 1.0
on the ground? (0-2) in engineering,
construction or
construction
management;
Being a
registered
architect or
engineer.
Page 16Doing Business 2019 Lebanon
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 data collection for the project was completed in May 2018. See the methodology
for more information.
What the indicators measure Case study assumptions
Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions about the
(number) warehouse, the electricity connection and the monthly consumption are used.
• Submitting all relevant documents and obtaining The warehouse:
all necessary clearances and permits
- Is owned by a local entrepreneur and is used for storage of goods.
• Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the data are
receiving all necessary inspections
also collected for the second largest business city.
• Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is in an
purchasing material for these works area with no physical constraints. For example, the property is not near a railway.
- Is a new construction and is being connected to electricity for the first time.
• Concluding any necessary supply contract and
- Has two stories with a total surface area of approximately 1,300.6 square meters
obtaining final supply
(14,000 square feet). The plot of land on which it is built is 929 square meters
Time required to complete each procedure (10,000 square feet).
(calendar days)
The electricity connection:
• Is at least 1 calendar day
- Is a permanent one with a three-phase, four-wire Y connection with a subscribed
• Each procedure starts on a separate day capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1
• Does not include time spent gathering kilowatt (kW).
information - Has a length of 150 meters. The connection is to either the low- or medium-voltage
distribution network and is either overhead or underground, whichever is more
• Reflects the time spent in practice, with little common in the area where the warehouse is located and requires works that involve
follow-up and no prior contact with officials
the crossing of a 10-meter road (such as by excavation or overhead lines) but are all
Cost required to complete each procedure (% of carried out on public land. There is no crossing of other owners’ private property
because the warehouse has access to a road.
income per capita)
- Does not require work to install the internal wiring of the warehouse. This has
• Official costs only, no bribes already been completed up to and including the customer’s service panel or
• Value added tax excluded switchboard and the meter base.
The reliability of supply and transparency of The monthly consumption:
tariffs index (0-8)
- It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00
• Duration and frequency of power outages (0–3) p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that
• Tools to monitor power outages (0–1) 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.
• Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest
• Regulatory monitoring of utilities’ performance supplier.
(0–1) - Tariffs effective in January of the current year are used for calculation of the price of
electricity for the warehouse. Although January has 31 days, for calculation
• Financial deterrents limiting outages (0–1) purposes only 30 days are used.
• Transparency and accessibility of tariffs (0–1)
Price of electricity (cents per kilowatt-hour)*
• Price based on monthly bill for commercial
warehouse in case study
*Note: Doing Business measures the price of
electricity, but it is not included in the ease of doing
business score nor the ranking on the ease of
getting electricity.
Page 17Doing Business 2019 Lebanon
Getting Electricity - Lebanon
Standardized Connection
Price of electricity (US cents per kWh) 13.2
Name of utility Electricité du Liban (EDL)
City Covered Beirut
Indicator Lebanon Middle East & OECD high Best Regulatory
North Africa income Performance
Procedures (number) 4 4.7 4.5 3 (25 Economies)
Time (days) 89 72.4 77.2 18 (3 Economies)
Cost (% of income per capita) 119.4 479.9 64.2 0.0 (3 Economies)
Reliability of supply and transparency of tariff 0 4.2 7.5 8.0 (27 Economies)
index (0-8)
Figure – Getting Electricity in Lebanon and comparator economies – Ranking and Score
DB 2019 Getting Electricity Score
0 100
80.49: Jordan (Rank: 62)
79.89: Saudi Arabia (Rank: 64)
71.41: Egypt, Arab Rep. (Rank: 96)
69.45: Regional Average (Middle East & North Africa)
62.75: Lebanon (Rank: 124)
52.07: Syrian Arab Republic (Rank: 158)
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 the scores for all the component indicators except the price of electricity.
Page 18Doing Business 2019 Lebanon
Figure – Getting Electricity in Lebanon – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
140
80
120
Cost (% of income per capita)
70
100
60
Time (days)
50 80
40
60
30
40
20
20
10
0 0
1 2 *3 4
Procedures (number)
* 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 the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Figure – Getting Electricity in Lebanon and comparator economies – Measure of Quality
8
7
6 6
6
Index score
5
4.2
4
3
3
2
1
0 0
0
Lebanon Egypt, Arab Rep. Jordan Saudi Arabia Syrian Arab Republic Middle East & North Africa
Page 19Doing Business 2019 Lebanon
Details – Getting Electricity in Lebanon – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain neighbor's electricity bill (for address of closest building) 1 calendar day LBP 0
Agency : Neighbor
The customer needs to obtain an electricity bill from their neighbor or the
identification number of the neighbor’s meter box (showing the address of the
closest building. This is needed when applying for electricity connection because
it allows the electricity company, Electricité du Liban, locate the construction.
2 Submit application to EDL and await estimate 18 calendar days LBP 11,000
Agency : Electricité du Liban (EDL), Beirut
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
3 Receive external inspection by EDL 1 calendar day LBP 451,143.69
Agency : Electricité du Liban (EDL), Beirut
The application is forwarded to the relevant department at the utility for review. A
site inspection is usually carried out to determine the details of the connection.
The inspector then prepares a report with the specifics of the connection and
awaits clearance from 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 is then given the approved file back along with a
“C23” card (with the number of connections and the temporary meter, if needed).
4 Await and receive external works and meter installation from EDL’s service 70 calendar days LBP 14,907,000
provider
Agency : Electricité du Liban (EDL), Beirut
External works start after the client has paid the connection fees. For a
connection of 3x200A, if the warehouse is less than 200 meters away from the
closest distribution substation, the works will consist of laying out an underground
cable from the building to that substation. Otherwise, a substation would be
needed.
Any permits needed for the works are obtained by the utility directly. The utility
picks a contractor to do the external works, and possibly install the meter and
turn the electricity on too. The utility however, always supervises the works.
No inspection of the entire internal wiring is done during the process.
Takes place simultaneously with previous procedure.
Page 20Doing Business 2019 Lebanon
Details – Getting Electricity in Lebanon – Measure of Quality
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 No
supply?
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 No
exceed a certain cap?
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/
ABOUTEDL.htm
Are customers notified of a change in tariff ahead of the billing cycle? Yes
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.
Page 21Doing Business 2019 Lebanon
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 a building 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 quality of land administration index has five dimensions: reliability of infrastructure, transparency
of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for
the project was completed in May 2018. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally transfer title on To make the data comparable across economies, several assumptions about the
immovable property (number) parties to the transaction, the property and the procedures are used.
• Preregistration procedures (for example, The parties (buyer and seller):
checking for liens, notarizing sales agreement,
paying property transfer taxes) - Are limited liability companies (or the legal equivalent).
- Are located in the periurban area of the economy’s largest business city. For 11
• Registration procedures in the economy's largest economies the data are also collected for the second largest business city.
business city.
- Are 100% domestically and privately owned.
• Postregistration procedures (for example, filling - Have 50 employees each, all of whom are nationals.
title with municipality) - Perform general commercial activities.
Time required to complete each procedure The property (fully owned by the seller):
(calendar days)
- Has a value of 50 times income per capita, which equals the sale price.
• Does not include time spent gathering - Is fully owned by the seller.
information - Has no mortgages attached and has been under the same ownership for the past
• Each procedure starts on a separate day - 10 years.
though procedures that can be fully completed - Is registered in the land registry or cadastre, or both, and is free of title disputes.
online are an exception to this rule - Is located in a periurban commercial zone, and no rezoning is required.
- Consists of land and a building. The land area is 557.4 square meters (6,000
• Procedure is considered completed once final square feet). A two-story warehouse of 929 square meters (10,000 square feet) is
document is received
located on the land. The warehouse is 10 years old, is in good condition, has no
• No prior contact with officials heating system and complies with all safety standards, building codes and legal
requirements. The property, consisting of land and building, will be transferred in its
Cost required to complete each procedure (% of entirety.
property value) - Will not be subject to renovations or additional construction following the purchase.
- Has no trees, natural water sources, natural reserves or historical monuments of
• Official costs only (such as administrative fees,
duties and taxes). any kind.
- Will not be used for special purposes, and no special permits, such as for
• Value Added Tax, Capital Gains Tax and illicit residential use, industrial plants, waste storage or certain types of agricultural
payments are excluded activities, are required.
- Has no occupants, and no other party holds a legal interest in it.
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)
Page 22Doing Business 2019 Lebanon
Registering Property - Lebanon
Indicator Lebanon Middle East & OECD high Best Regulatory
North Africa income Performance
Procedures (number) 8 5.6 4.7 1 (4 Economies)
Time (days) 37 29.7 20.1 1 (New Zealand)
Cost (% of property value) 6.0 5.7 4.2 0.0 (Saudi Arabia)
Quality of the land administration index (0-30) 16.0 14.2 23.0 None in 2017/18
Figure – Registering Property in Lebanon and comparator economies – Ranking and Score
DB 2019 Registering Property Score
0 100
81.61: Saudi Arabia (Rank: 24)
66.40: Jordan (Rank: 72)
62.11: Regional Average (Middle East & North Africa)
59.44: Lebanon (Rank: 105)
55.00: Egypt, Arab Rep. (Rank: 125)
46.88: Syrian Arab Republic (Rank: 157)
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 of the scores for each of the component indicators.
Figure – Registering Property in Lebanon – Procedure, Time and Cost
Time (days) Cost (% of property value)
7
35
6
30
Cost (% of property value)
5
25
Time (days)
4
20
3
15
10 2
5 1
0 0
1 2 3 *4 5 6 7 8
Procedures (number)
* 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 the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 23Doing Business 2019 Lebanon
Figure – Registering Property in Lebanon and comparator economies – Measure of Quality
30
25 22.5
Index score
20
16.0
15 14.2
10.5 10.5
10 9.0
5
0
Lebanon Egypt, Arab Rep. Jordan Saudi Arabia Syrian Arab Republic Middle East & North Africa
Details – Registering Property in Lebanon – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain a copy of the ownership deed from the Land Registry 1 day LBP 10,000
Agency : Land Registry
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 or pending legal cases. Importantly there is a
compulsory government order on the property or, for example, whether any
roads are planned through the area.
The procedure to obtain the Real Estate Certificate is a straight forward one
which only requires submission of the request, and the certificate is immediately
issued thereafter. Starting in 2016, there is a possibility to obtain the certificate
online by going to http://www.lrc.gov.lb/en/content/viewing-title-register.
2 Obtain an official cadastral map and a location map of the property 1 day LBP 20,000
Agency : Cadastre Administration (Da'irat al Massaha)
If the area is not specified in the real estate certificate and in the title deed, which
is often the case, an official cadastral map and a location map of the property
must be obtained from the cadastre administration (in Arabic “Dairat al
Massaha”).
3 Obtain an urban plan certificate from the Urban Planning Authority and the 10 days LBP 6,000
Municipality
Agency : Urban Planning Authority and Municipality
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 make sure that no special easement or expropriation is
planned on the property that he intends to purchase.
4 Obtain a Municipal Tax Clearance (Bara’et Zimma) 3 days LBP 8,000
Agency : Municipality
Obtain clearance from the Municipality to make sure that municipal taxes prior to
the sale agreement have been paid. This is not required by law, but it is usually
requested by the buyer.
5 Preparation of the sale agreement by a lawyer 2 days LBP 1,500,000; (LBP
Agency : Lawyer 1,500,000 (minimum
An attorney prepares the sale agreement on an official form. The participation of set by the Beirut Bar
a lawyer is not mandatory, but it is preferred to avoid any mistakes. The sale
Association))
contract is often drafted by the notary public or by a qualified facilitator.
However, for complex and delicate real estate transactions where either or both
parties need to protect 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 LBP 1,500,000 for the drafting of a contract. Such minimum fee shall be
subject to an increase taking into consideration the contract's value and
importance.
6 Obtain an official estimate of the property rental value from the Tax 10 days LBP 5,000
Authority
Agency : Ministry of Finance
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 a controller to obtain an official estimate of the
rental value of the property. A copy of the sale agreement should be submitted to
the Ministry of Finance to obtain the official estimate of the rental value.
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