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Investment Projects


Definition
Incentives
Criteria
Steps
Application Form

Definition

With respect to the Investment Development Law, IDAL identifies investment projects with regard to their geographical locations, sectors covered, investment cost and other criteria.

The sectors covered are:
   - Industry;
   - Agriculture;
   - Agro-industry;
   - Tourism;
   - IT / Technology / Telecommunication / Media;

Incentives

The new Investment Development Law 360 dated 16/8/2001 classified Lebanon into three investment zones (A, B and C). The incentives for investment projects will be based on the classification of the project within one particular investment zone.

The incentives are as follows:

Zone A:

Projects classified within Zone A will benefit from the following exemptions, reductions and facilities:
- Work permits for various categories, exclusively needed for the project, provided that at least two Lebanese nationals are employed for each foreigner. All employees should be registered with the National Social Security Fund.
- Exemption from income tax for two years (from the day of listing the shares thereof on the Beirut Stock Exchange), provided that the effective negotiable shares are no less than 40% of the capital of the company.

Zone B:

Projects classified within Zone B will benefit from the following exemptions, reductions and facilities:
- Work permits for various categories, exclusively needed for the project, provided that at least two Lebanese nationals are employed for each foreigner. All employees should be registered in the National Social Security Fund.
- Exemption from income tax for two years (from the day of listing the shares thereof on the Beirut Stock Exchange), provided that the effective negotiable shares are no less than 40% of the capital of the company.
This exemption period shall be added to any other exemption period enjoyed by the company.
- A 50% reduction in income taxes and taxes on project dividends, for a period of five years. Reduction shall apply from the date of the commencement of exploitation of the projects governed by the provisions of this law. In the events that the investor benefits for the aforementioned exemptions related to the listing of the shares at the Beirut Stock Exchange, reduction shall apply after the lapse of that exemption period.

Zone C:

Projects classified within Zone C (areas which the government intends to develop) will benefit from the following exemptions, reductions and facilities:
- Work permits for various categories, exclusively needed for the project, provided that at least two Lebanese nationals are employed for each foreigner. All employees should be registered in the National Social Security Fund.
- Exemption from income tax for two years (from the day of listing the shares thereof on the Beirut Stock Exchange), provided that the effective negotiable shares are no less than 40% of the capital of the company.This exemption period shall be added to any other exemption period enjoyed by the company.
- A full exemption of 10 years from income taxes and taxes on project dividends. Reduction shall apply from the date of the commencement of exploitation of the projects governed by the provisions of this law. If the investor benefits for the aforementioned exemptions related to the listing of the shares at the Beirut Stock Exchange, reduction shall apply after the lapse of that exemption period.

Criteria

1. Investment Cost

1.1 Cost Determination

The following four elements determine the cost of an investment:

a- Land Value
The purchase amount as registered at the Real Estate Directorate as well as the cost of registration fees, expenses related to the purchase operation and the Deed of Ownership. It may also include demolition expenses of existing structures.

b- Land Improvement
All expenditures needed to build secondary roads within the project site or to construct car parks or other infrastructure works required for the project.

c- Building (Construction)
All costs of construction, including those of shops, offices, plants, and warehouses. If a standing structure is purchased as part of the land deal, incidental costs such as registration fees at the Real Estate Directorate and the expenses related to the purchase operation and the Real Estate Deed are included. Expenditures for rehabilitating and refurbishing of buildings to prepare it for its intended use are also added to the cost of construction.

d- Machinery & Equipment

The cost of machinery and equipment includes the actual purchase price, taxes (excluding VAT), freight charges and insurance. It would also include expenditures required for assembling, installing and testing. All types of vehicles are eligible for inclusion in the category of machinery and equipment costs, excluding the insurance on vehicles.

1.2 Minimum Investment  Required to Qualify

2. Other Criteria

The following criteria will also be taken into consideration by IDAL's board of directors when evaluating an application to qualify for incentives granted by Law 360:
- Economic and social impact
- Targeted sectors
- Environmental impact
- The Investment zone of the project (A, B or C)
- The impact of the investment project on local job creation
- Preservation of natural resources  
- Providing for the local market and/or export oriented
- Transfer of technology and provision of technical training
- Impact of the investment on similar industrial projects and on consumers
- The accordance of the investment project with government priorities and development policies
- The establishment of Research and Development centers
- The value for software and hardware for ICT projects

Steps

Application Form

Please click here to download the Investment Projects application form.