International Securities Law and Regulation - 2nd Edition - Looseleaf
International Securities Law and Regulation - 2nd Edition - Electronic
Mohamed Y Alem
Alem & Associates, Barristers & Solicitors
The Beirut Stock Exchange was established in 1920 immediately afterWorldWar I. The
Beirut Stock Exchange was the first in the Middle East and, thus, it attracted investments
from the entire region as well as from European countries, mainly France, of which
Lebanon was a protectorate until 1946.
Trading on the Beirut Stock Exchange prospered in the 1950s and 1960s. However, it
slowed with the beginning of the war in 1975. In 1983, the Stock Exchange Commission
suspended its activities, as the whole economic activity in Lebanon was seriously disrupted.
In September 1995, the Beirut Stock Exchange was officially reopened, and it
began trading in January 1996.
Lebanon offers the most liberal investment climate in the Middle East, with no significant
restrictions on investment, liberal trade, clear foreign investment policies, local investment
guarantee coverage, bank secrecy and a free currency exchange regime with no
control on capital flows, low taxes with a flat 15 per cent corporate tax, 10 per cent tax on
dividends, and 7.5 per cent withholding tax, well-defined legal rights for property, business
legal frameworks with different types of companies and legal structures, and a
generally efficient and reliable judicial system operating on a clear set of rules pertaining
to integrity and impartiality.
Foreign investors can virtually invest in any sector, except for certain areas related to
national security.There are also certain restrictions on real estate ownership by non-Lebanese
as well as on the ownership and management of public utilities.
In an effort to attract foreign direct investment, the government is currently considering
privatising some of the public services and has resorted in many cases to BOT-type
contracts. The government is also issuing dollar-denominated Euro bonds and, recently,
for the first time, issuedGermanmark-denominatedEuro bonds to financemajor projects.
In 2004, Lebanese Government Eurobonds were introduced on the stock exchange.