Lebanon Market Entry

Lebanon Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

Imports are carried out by larger trading companies, which sell goods not only to wholesalers, but also to retail distributors. The country has an extensive network of supermarkets and hypermarkets with a very wide assortment, especially in food and consumer goods.

In the Lebanese market, it is recommended to act through a reliable representative well acquainted with the product being sold, it is necessary to visit the market regularly and familiarize yourself with its development and requirements. It is advisable to pay attention to the selection of a representative (especially an exclusive one) (e.g. through the commercial register, some global agencies such as Dun & Bradstreet or the Lebanese branch of the Kompass agency), it is also advisable to use the services of a reliable local law office.

When looking for a business partner, you can use business associations both in the Czech Republic and in the territory, as well as local regional chambers of commerce, industry and agriculture. You can also advertise in the local press or contact the Embassy of the Czech Republic in Beirut. Participation in specialized trade fairs is also a suitable option.

According to cheeroutdoor.com, Lebanon is a classic country of free trade, especially the middle and upper classes here traditionally prefer branded products that are brought to the market by exclusive representatives. In recent years, the share of goods imported from Asian countries (China, Korea) has also been growing.

Import customs procedures in Lebanon:

Each customs declaration must contain the following documents:

  • original invoice
  • detailed list of items / products
  • a copy of the bill of lading or other document that replaces it
  • certificate of origin in accordance with customs regulations or bilateral or multilateral agreements

The customs system is the harmonized system of Brussels. Tariffs range from 0% to 70%. More than three-quarters of imported goods are subject to a five percent or lower duty (varies depending on the nature of the goods and their origin). Import surcharges may be applied to certain products (eg textiles, alcoholic beverages, motor vehicles).

Duties are payable in cash. Information on other documents or procedures required by other authorities, such as import bans, import licenses, certificates, etc., can be found on the Lebanon Customs website.

Forms and conditions of operation on the market

Foreign companies can open a branch or representative office in Lebanon.

Lebanese law covers various forms of business activity in the country for both Lebanese and foreign companies.

More information is available on the website of the Investment Development Agency of Lebanon (IDAL). Here you can also consult specific procedures for dealing with formalities associated with any investment, including registration of an office, representative office or joint venture. Cooperation with a specialized legal office is always appropriate. More information can also be obtained at www.mideastlaw.com.

Marketing and communication

Especially in the area of ​​food and consumer goods, thanks to the well-stocked market and demanding customers (mainly from higher income groups), success with new products cannot be relied upon without quality promotion.

The most important advertising agency is BBDO, H&C Leo Burnett, Gray Worldwide, Publicis Graphics, Fortune Promoseven, TMI/JWT, Saatchi & Saatchi Beirut, Memac Ogilvy, TBWA/Rizk and Team Young & Rubicam are also important.

One of the many TV channels, radio or print media can still be used for wide-reaching promotion. For promotion, large-scale posters (billboards), advertising shots in cinemas before the main program, exhibitions and fairs, national days, public holiday celebrations, etc. the product alerts.

The most watched TV station that can be used for advertising is probably LBCI, when considering radio advertising then Radio Sawt Al-Ghad. The most read daily is An-Nahar. The main professional business magazines that can be used for promotion are the English Lebanon Opportunities, Executive Magazine and Arab Ad, the French Le Commerce du Levant and the Arabic Al-Iktissad Wal Amal.

Issues of intellectual property protection

Although Lebanon has adopted sufficient legislation to protect intellectual property rights, in recent years it has been regularly criticized by the international community (mainly the US, but also the UK and France) for its lack of protection in the areas of software, audiovisual production or the pharmaceutical industry. Criticism mainly concerns the low awareness of judges about the harmful effects of violating the relevant rights and the related insufficiently prohibitive punishment.

Although Lebanon is not a member of the WTO, its legislation on intellectual property rights is generally in line with TRIPS (Trade-Related Intellectual Property Rights). Enforcement of intellectual property rights is weak. The Office for Intellectual Property Protection (under the Ministry of Economy and Trade) has led efforts to improve the intellectual property protection regime, but suffers from limited financial and human resources and insufficient political support. The Lebanese Internal Security Forces (ISF) and Customs play a role in enforcement. The understanding of intellectual property rights within the Lebanese judiciary has improved somewhat in recent years, but gaps remain in terms of the negative economic impact that intellectual property rights violations have on the economy.

Existing intellectual property rights laws cover copyright, patents, trademarks and geographical features. Lebanon’s Copyright Law of 1999 is largely in line with WTO regulations and requires only minor modifications to make it fully compatible. Copyright registration in Lebanon is not mandatory and copyright protection is provided without the need for registration. The Ministry of Economy and Trade launched an online trademark registration service at https://portal.economy.gov.lb/ in January 2013. This service has simplified the registration process and trademark registrations are now online. Due to the complexity of copyright and patents, registration is still accepted in person at the Ministry and payment must also be made in person. The transition from a deposit system to a trademark opposition system also remains on hold due to the need for parliamentary approval. However, the system of objections is implemented in practice.

The Lebanese Parliament ratified the World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO Performances and Phonograms Treaty (WPPT) in February 2010. However, ratification documents have not yet been deposited with WIPO, as this would also require changes to copyright law. A modern TRIPS-compatible patent law, passed in 2000, provides general protection for semiconductor chip layout designs and plant varieties. Data protection and undisclosed information fall under Article 47 of the Patent Act, but the current provisions on drug registration are subject to interpretation. Generic manufacturers in Lebanon are not prohibited from using the original data to register competing products that are identical to the original products. For patent registrations, the Lebanese legal regime does not require examination of novelty, utility and innovation. The Homeland Security (ISF) Cybercrime and Intellectual Property Unit under the ISF Judicial Police Directorate focuses its efforts on online counterfeiting and copyright infringement, while the Money Laundering and Financial Crimes Unit investigates trademark infringement related to counterfeit physical goods. Lebanese Customs also plays a direct role in enforcing intellectual property rights by confiscating counterfeits, and an indirect role in its anti-smuggling efforts.

As far as industrial property is concerned, importers and distributors of Czech products are recommended to register the relevant trademark in the country as soon as possible. The Embassy of the Czech Republic in Beirut registered cases where a Lebanese entity without any connection to the Czech manufacturer (and probably also its product) took advantage of the fact that the product did not enjoy protection in Lebanon, registered it with the competent authority and subsequently prevented the legitimate importer from carrying out its regular business activities. The possibilities of the embassy are very limited in these cases, solutions are usually only possible through the courts. The Ministry of Economy and Trade of Lebanon launched a portal for online copyright and trademark registration in January 2013 at portal.economy.gov.lb. This tool has simplified the registration process so much that that today 80% of all registrations take place electronically. The transition from the deposit system to the objection system in the case of trademarks has not yet been enacted, but it is already being implemented in practice.

Public procurement market

Although Lebanon has adopted sufficient legislation to protect intellectual property rights, in recent years it has been regularly criticized by the international community (mainly the US, but also the UK and France) for its lack of protection in the areas of software, audiovisual production or the pharmaceutical industry. Criticism concerns, in particular, the low awareness of judges about the harmful effects of violating the relevant rights and the related insufficiently prohibitive punishment.

As far as industrial property is concerned, importers and distributors of Czech products are recommended to register the relevant trademark in the country as soon as possible. The Embassy of the Czech Republic in Beirut registers cases where a Lebanese entity without any connection to the Czech manufacturer (and probably also its product) took advantage of the fact that this product did not enjoy protection in Lebanon, registered it with the competent authority and subsequently prevented the legitimate importer from carrying out its regular business activities. The possibilities of the embassy are very limited in these cases, solutions are usually only possible through the courts. The Ministry of Economy and Trade launched a portal for online copyright and trademark registration at portal.economy.gov.lb in January 2013. This tool has simplified the registration process so much that that today already 80% of all registrations take place electronically. The transition from the deposit system to the objection system in the case of trademarks has not yet been enacted, but it is already being implemented in practice.

Most public contracts are channeled through the Council for Development and Reconstruction (CDR), which is the government’s executive office responsible for awarding important projects, procuring their financing and exercising administrative supervision. Important projects in the field of transport, energy, telecommunications, education, waste, commissioned by CDR in coordination with the relevant ministries, can be found here.

The tenders planned for the respective year are published in the first issue of the weekly Journal Officiel (in Arabic), its subsequent issues contain information on newly approved tenders. On an ongoing basis, public contracts are published mainly in the Arabic and French daily press (only rarely in English) and can also be found on the Lebanon Opportunities website.

The detailed conditions of each tender and the technical requirements can be studied on site directly at the CDR headquarters and then purchased at the relevant CDR departments or at individual ministries and other departments (also, for example, at the headquarters of the EDL energy company). The so-called Tender-books (Conditions) cost on the order of USD 500-5000 and are often issued relatively shortly before the tender deadline, which in practice may not be enough to study the conditions and process a larger offer.

The embassy can provide logistical assistance with the purchase of tender conditions, but the most suitable is cooperation with local representatives with interests in the relevant sectors, who are appropriately pre-registered for tenders, monitor their listing, purchase documentation and prepare an offer in cooperation with the supplier. It is necessary to count on lengthy approval of contracts by the government. Due to the long-term complex domestic political situation, processes are not always transparent and tenders are often postponed, repeated or cancelled.

Some large projects assume the participation of the supplier on the basis of a long-term investment in the BOT (Build – Operate – Transfer) system, or BOOT (Build – Operate – Own – Transfer), or DBOT (Design – Built – Operate – Transfer), which brings higher returns for the investor risks. Even in cases where the project is financed directly by the relevant Lebanese ministry, CDR or financial institution (World Bank, European Investment Bank, Arab Investment Fund or other entity from the Gulf), a higher financial guarantee is required and cash-flow is sometimes delayed, which prevents smooth implementation of projects. Czech companies may therefore prefer the less daring option of participating in already awarded contracts in the form of subcontracting.

Bids for tenders are submitted according to the prescribed procedure in sealed envelopes, usually the technical part and the price part separately. Bids are evaluated by expert committees, which usually announce the result on the day of the closing date and the opening of the envelopes.

Community tenders for EuropeAid

Czech companies and non-governmental non-profit organizations are also recommended to regularly monitor EU tenders.

If the eligibility conditions are too demanding for a smaller company, it is possible to enter the tender as part of a consortium (the criteria apply to the consortium as a whole, not to its individual members) or with the guarantee of an economic operator.

Payment terms, payment ethics and resolution of commercial disputes

It is not possible to develop an exact model for the resolution of commercial disputes, however, taking into account the slow functioning of local courts (disputed court proceedings in commercial matters last 5 to 6 years, enforcement of a court decision another 6 months to 2 years) it is generally recommended to use alternative/conciliatory forms of their settlement.

Lebanon is a member of the International Center for Settlement of Capital Disputes (ICSID) and a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The obligations of these conventions are sufficiently reflected in Lebanese law.

Economic organizations incl. Chambers of Commerce, Industry and Agriculture created the Lebanese Center for Arbitration in 1995, which takes over the resolution of disputes between market participants in trade and investment matters. The procedural rules of its conciliation and arbitration proceedings are practically identical to those of the International Chamber of Commerce in Paris.

Recommendations for Czech companies:

  • Thoroughly study contractual documents (especially general terms and conditions and provisions on applicable law – the importance of asserting the jurisdiction of the Czech court);
  • Due to the permanently tense security situation in the country and the region, insure investments against non-commercial risks;
  • For exports from the Czech Republic to Lebanon, a payment system based on simple payment in advance or against a bank guarantee issued by a bank other than a Lebanese one is suitable;
  • the most suitable delivery condition for Czech exporters is EXW, which does not result in any additional obligations for the supplier;
  • for imports from Lebanon, on the other hand, it is appropriate to condition payment on delivery of the goods to the importer or on crossing the border of the Czech Republic.

Visas, fees, specific conditions for traveling to the territory

There is a visa requirement between the two countries. From 21 December 2007, holders of Lebanese travel documents can use a Schengen visa issued by the Embassy of the Czech Republic in Beirut for short-term trips to the Czech Republic of up to 90 days (applications can be made through VFS Global Beirut), or a valid Schengen visa issued by another state of the Schengen Convention can be used.

Czech citizens can apply for a visa either at the Embassy of the Republic of Lebanon in the Czech Republic or at the international airport in Beirut, where the visa is issued against a valid travel document. We recommend consulting the Embassy of Lebanon in Prague with the current conditions for granting an entry visa and the fees set for its granting before your trip. Registration is not required for short-term stays.

A Lebanese visa can only be obtained in a passport that does not contain an Israeli entry or exit stamp. Airlines may refuse to transport to Lebanon foreigners whose passports are valid for less than 3 months from the expected end of their stay in Lebanon. Even if such a person is transported, for the same reason an entry visa may not be granted by the Lebanese authorities directly at the Beirut airport.

Other types of visas, i.e. long-term ones, must always be applied for through the embassy or consulate of Lebanon abroad. Useful information in English, French and Arabic is also available on the website of the Lebanese General Security, section “Entry Visas”.

Contact the Czech Embassy in Lebanon, see chapter 6.1.

Contact the embassy of the Republic of Lebanon in the Czech Republic:

Embassy of the Republic of Lebanon

Lazarská 6 120 00 Prague 2 Tel.: +420 224 930 495, + 420 224 930 029 Fax: +420 224 934 534

Employment of citizens from the Czech Republic

EU citizens can hold any position in a private company, but the conditions for obtaining a work permit in individual professions are very different and often administratively demanding. The completion of the formalities must therefore be left to the employer.

Fairs and events

Project Lebanon is the most important Lebanese fair with a significant influence on other countries in the region. Exhibition items usually include everything related to construction in the broadest sense of the word, construction technologies, building materials, home construction equipment (sanitary products, kitchens, tiling, floors, swimming pools), lighting, and ecological and water management technologies. Since 2013, the fair has been held at one location in parallel with another fair, Energy Lebanon. Another important trade fair focused on hotel and catering is Horeca Lebanon. The Lebanon Waste Management Exhibition and Conference is also held annually in Lebanon, focusing on waste management, recycling and the environment.

Other important fairs are Smartex Lebanon – an information and telecommunications technology fair and Travel Lebanon – a fair focused on travel and tourism.

Lebanon Market Entry