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02 May | Doing Business in Lebanon: Getting Help from International Banks

Bordering the Mediterranean Sea and lying between Israel and Syria, Lebanon has a population of 4.259 million and a GDP of USD 40.09 billion in 2011, according to World Bank figures. Lebanon is situated in a strategic geographic location, at the crossroads between three continents (Africa, Asia and Europe), where trade routes converge. It is one of the non-oil producing Arab states in the Middle East and North Africa (MENA). Here we will explore why Lebanon is considered an attractive destination for investors looking to start a business and how international banks can assist.

Investment Climate

Lebanon has one of the most liberal investment climates in the Middle East and North Africa (MENA). The government has long supported a free-market economy, for example, they abolished exchange control and permitted non-residents to operate freely in the banking sector. Lebanon has a sophisticated and developed financial sector and there are a range of banking and financial institutions and markets to aid you when you are expanding your business, including commercial banking, investment banking, international banks and insurance protection. In addition to the banking sector, there are a large number of investment opportunities in other sectors as well, such as construction, transportation, telecommunications, healthcare, education, tourism, oil and gas, energy, and information technology. To meet the World Trade Organisation (WTO) membership requirements, the Lebanese government approved a customs law in 2,000 that facilitates the import and export of goods in Lebanon. This resulted in streamlining of paperwork on cargo clearance, clamping down on smuggling, speeding-up port clearance and formalising payment methods. Furthermore, Lebanon has a well-educated and skilled workforce.

Advice about Banking for Entrepreneurs

Starting your business in Lebanon will definitely require forming partnerships with international banks. You should get help from these institutions because they have experience in facilitating financial transactions across multiple borders. International banks offer a range of investment advice plus support and services. If your current bank has a presence in Lebanon, you can open a Lebanese bank account and operate in Lebanon pounds. Some international banks offer a foreign currency account, which is an account held in your home country and operated in Lebanon pounds. International banks also offer a variety of international credit cards. You can choose to use a business credit card if you want to separate your personal expenses from business purchases. A corporate card, on the other hand, enables you to keep control of business costs by setting transaction limits for each cardholder. If you are exporting goods overseas, you can secure a loan from an international bank to bridge the cash flow gaps between the time you pay your suppliers and obtain receipt of your sales proceeds.

If you intend to create stock options and make them available for trade on the Beirut Stock Exchange, you can also seek advice from international banks. Employees can buy stocks in the company that they work for and this acts as a form of incentive. Other services offered by these banks include cross-border payment collection, access to working capital finance and special lines of credit for foreign exchange transactions. Additionally these institutions can provide expertise such as risk management and project management. If you require a marketing consultant or trade specialist for your business, your bank may be able to connect you with relevant professionals as well.

Although Lebanon’s political situation has been unstable, the current government has implemented a series of structural reforms to boost Lebanon’s economy and restore investors’ confidence. According to the Daily Star, Lebanese Central Bank Governor Raid Salameh said that a stimulus plan, which included housing plans, and loans to specific sectors, will stimulate economic growth that is expected to surpass 2% in 2013. Many international banks offer political risk insurance to alleviate your concerns and safeguard your assets.

Do your research before you embark upon an entrepreneurial endeavour in Lebanon and make sure you look into the services provided by your current bank, if it has an overseas presence.

Staff Writer