Discusses distribution network from how products enter to final destination, including reliability of distribution systems, distribution centers, ports, etc.
Major shopping malls and department stores in Lebanon include ABC Malls, Beirut City Center, CityMall, and Le Mall. The main supermarket chains include Carrefour, Le Charcutier Aoun, Fahed Supermarket, Metro Superstore, Monoprix, and Spinneys.
Using an Agent or Distributor
U.S. companies generally work with a Lebanese agent or distributor when doing business in Lebanon. The agent may take the form of a partnership, a sole proprietorship, a joint-stock company, or a limited liability company. The agent may act on behalf of the U.S. company to bid on government contracts and to market its products. The U.S. Commercial Service can assist U.S. companies with finding reliable agents through the Gold Key Service (GKS) and the International Partner Search (IPS).
Establishing an Office
A foreigner who would like to establish a business branch in Lebanon must first apply for a residency permit from the Directorate of General Security (Sûreté Générale in French) and a work permit from the Ministry of Labor. Foreign companies also require a license to operate from the Ministry of Economy and Trade. U.S. companies may operate through local branches, provided they obtain a “receipt of acknowledgement” from the Ministry of Economy and Trade and register in a local commercial court. For trade activity, the company must register at one of the four regional chambers of commerce and industry (Chamber of Commerce Industry and Agriculture of Beirut and Mount Lebanon, Chamber of Commerce Industry and Agriculture of Zahle and Bekka, Chamber of Commerce Industry and Agriculture of Tripoli and North Lebanon, Chamber of Commerce Industry and Agriculture in Sidon and South Lebanon).
The Investment Development Authority of Lebanon (IDAL) has a one-stop shop service to issue permits and licenses in investors for all the key sectors.
Franchising in Lebanon has experienced notable growth since the late 1990s with the successful establishment of international brand names across the country. According to the Lebanese Franchise Association (LAF), the franchising sector employed nearly 99,000 employees, an estimated four percent of total workers in the country, before the economic crisis. However, as a result of the crisis, the franchising sector has experienced a major decrease in its workforce, dropping to nearly 35,000 employees, constituting approximately two percent of Lebanon’s total labor force. The remaining workers are concentrated in the hospitality and retail sectors.
Before the crisis, there were approximately 1,105 companies in the franchising sector in Lebanon constituting around 6 percent of total companies operating in Lebanon. The industry contributed close to $2.5 billion to the national economy, or about 4.75 percent of 2019 GDP. At that time, approximately 44 percent of franchises in Lebanon originated from Europe, 38 percent from the United States and Canada, and 13 percent from local Lebanese franchisors. However, LAF estimated that 60 percent of companies operating in the franchising industry have since closed.
Franchising opportunities are extensive in the food service industry. Major U.S. brands present in Lebanon include Burger King, Chili’s, Domino’s Pizza, Dunkin Donuts, Kentucky Fried Chicken (KFC), McDonald’s, Popeye’s, and Starbucks. Lebanese consumers value U.S. brand-names in clothing and professional service companies. These include Berlitz Languages, Florsheim, Century 21 Real Estate, Coldwell Banker, Hertz, Avis, New Horizons, RE/MAX International, Ziebart, and Regus.
Before the crisis, hotel franchises have witnessed growth in Lebanon. Many local hotels partnered with international chains to the benefit of local proprietors who capitalized on the chains’ name recognition and international reservation networks. U.S. brands Hilton and Sheraton compete in Lebanon with major international chains, such as Movenpick and Crowne Plaza. However, the hotel industry has witnessed a slowdown since 2019. Moreover, international chains, including the Four Seasons and Intercontinental, have closed their operations in Beirut after Beirut Port explosion in August 2020. Still, the sector is expected to enjoy its usual summer tourism boom. The Syndicate of Hotels in Lebanon expects occupancy to exceed 80 percent in four and five-star hotels during summer 2022.
The Lebanese Franchise Association (LFA) was established in 2006 in response to the needs of a fast-growing franchise industry, with the mission to develop franchising in Lebanon, and to promote Lebanese franchises worldwide. LFA hosts the annual Beirut International Franchise Forum (BIFEX), which offers significant opportunities for U.S. businesses to meet franchisors and potential franchisees from around the Middle East. More information is available on LFA’s website.
Lebanon’s annual advertising expenditures consistently rank among the highest in the region. After having peaked in 2010 at $161.4 million, advertising spending slumped in the following years as Lebanon’s economic situation worsened. However, a gradual recovery occurred in 2014 when annual advertising expenditures rose to $160.1 million. Now, given the economic crisis, experts predict a major decrease in advertising expenditures in the coming few years. Television advertising represents the largest share of total advertising with a value up to $25 million annually. Outdoor advertising represents the second largest share of total advertising estimated at $15 million annually. Digital advertising is estimated at $15 million annually and is expected to grow because many advertisers are taking advantage of the discounted prices in Lebanon to cover the region. Newspaper and magazine advertising is estimated at $2 million annually. Total radio advertising is also estimated at $2 million annually.
Joint ventures in Lebanon are established through the following six steps:
1 - Completion of preliminary legal tasks
2 - Payment of share capital
3 - Registration at the Trade Register
4 - Registration at the Bar Association
5 - Payment of duties at the Ministry of Finance
6 - Release of capital
Please find detailed information at IDAL‘s website.
Local and international express delivery companies are common and reliable in Lebanon. LibanPost provides national postal service.
There are several local and international freight service companies such as Expeditors, FedEx, Beirut Cargo Center, UPS, Aramex, TNT, and DHL that provide air, ocean, and ground transportation shipments to and from Lebanon. Air shipping time from the United States to Lebanon is estimated to be between one to three days, whereas ocean shipping time from the U.S. to Lebanon is in the range of 25 to 45 days.
U.S. firms should conduct due diligence on potential business partners in Lebanon. To verify the bona fides of Lebanese companies, U.S. firms may request the U.S. Commercial Service International Company Profile (ICP) service. The ICP report includes factual data on the Lebanese firm’s management, business activities, product lines, financial condition, creditworthiness, trading experience, market coverage, and business connections in the country, as well as an embassy evaluation to help U.S. firms assess risks, reliability, and capability.