BRANCH OF A FOREIGN COMPANY / REPRESENTATIVE OFFICE
A Foreign company wanting to do business in Lebanon can establish a branch which should have the same object as the mother company. The branch must first be registered with the Ministry of Economy and Trade followed by a second registration at the Trade Registry. A director for the local branch needs to be appointed and as well as a lawyer with yearly fees.
The foreign company may opt to establish a Representative Office in Lebanon.
However, the representative office’s activity is restricted and limited to the promotion of the head office’s services and products. Hence, a representative office may not engage in trade activities of any kind in Lebanon.
To set up a branch office / representative office, the foreign company’s Board of Directors must issue a proxy/power of attorney in favor of a Lebanese lawyer granting him the authority to register the company in Lebanon, to represent it, and to sign documents and do all the necessary measures on its behalf.
The documents needed are :
- The foreign Company’s By-laws and articles of incorporation (if applicable).
- The foreign company’s Certificate of Incorporation.
- The Corporate resolution of the foreign company, resolving to (i) set up the Branch in Lebanon, (ii) appoint a specific person as manager of the Branch and determine his powers, and (iii) appoint a Lebanese legal Counsel / Attorney to the Branch.
- A copy of the manager’s identification papers or passport as well as a copy of the lawyer’s “bar association” card (where applicable).
- Once the above original and legalized documents are sent to Beirut, they must be certified at the Ministry of Foreign Affairs and submitted for translation into Arabic by a competent translator.
What is the difference between a representative office and a local branch?
A representative office is an office that offers technical assistance in the market and handles public relations.
By law, This kind of office can not perform any commercial activity which could generate any business or profit. Therefore costs and expenses are to be borne by the outside foreign head office. Because of its nature, the representative office is not subject to corporate income tax.
A branch office can undertake in general any commercial activity, except that which by law requires a certain legal form or conditions and/or that which is exclusively reserved for Lebanese nationals and/or companies.
For these reasons, a branch office is subject to corporate tax.