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Definition

The Package Deal Contract is a package of special incentives, exemptions and reductions offered to investment projects bound by a contract stipulating the specific terms, rights, and obligations of both IDAL and the investor. 

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

Incentives

Projects benefiting from the package deal will be granted, at maximum, the following incentives:
- Full exemption of profits from income tax for a period of 10 years from the commencement date of the project;
- Work permits of all categories provided that the project benefiting of the incentive package deal preserves the interests of the local labor force through employing at least two Lebanese nationals for each foreign employee, and registering them in the National Social Security Fund;
- A 50% fee reduction for work and residence permits of foreign labor (regardless of category and depending on the number of permits required), as well as a reduction by half the value of the certificate of deposit entrusted to the Housing Bank;
- Exemption of joint-stock companies aiming at implementing and/or managing an investment project from the obligation of having Lebanese nationals or members of the legal profession on their board of directors;
- Up to 50% fee reduction on construction permits required for the building of facilities necessary for the execution of projects;
- Full exemption from fees related to land registration at the Land Registry and from fees related to annexation, sub-division, mortgage and registration of lease contracts at the Registry for the estates on which projects will be built, provided that the execution of the project shall take place within five years from the date of registration of the land at the Land Registry. Should the investor default in implementing the project, he will be liable to pay a penalty equivalent to three times the fees that were originally due;

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 any 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 also includes expenditures required for assembling, installing and testing.
All types of vehicles are eligible for inclusion in the category of Machinery and Equipment costs. Expenditure on insurance cover for the vehicles is excluded.

1.2 Minimum Investment 
Each project should have a minimum investment to qualify for a Package Deal Contract. 

2. Employment

The following job opportunities should be created within a period of four consecutive years from the commencement date of the project:

- All employees should be registered with the National Social Security Fund (NSSF)
- The number of employees may be reduced by a maximum of 20%, if 25% of the project's employees undergo vocational training that is directly related to the scope of work of the investment project
- The vocational training must be validated by IDAL's board of directors
- The investment project should employ a local labor force

3. Other Criteria

The following criteria will also be taken into consideration by IDAL's board of directors when evaluating an application for a Package Deal Contract:

- Economic impact
- Environmental impact
- Preservation of natural resources  
- Transfer of technology
- Impact of the investment on similar projects
- Government priorities and development policies

Steps

Application Form

Please click here to download the Package Deal Contract application form.