CCG Lebanon 2018

CCG Lebanon 2018 1 Table of Contents Doing Business in Lebanon ____________________________________________ 5 Market Overview ______________________________________________________________ 5 Market Challenges ____________________________________________________________ 6 Market Opportunities __________________________________________________________ 6 Market Entry Strategy _________________________________________________________ 7 Political Environment __________________________________________________ 8 Political Environment _________________________________________________________ 8 Selling U.S. Products & Services ________________________________________ 9 Using an Agent to Sell U.S. Products and Services _________________________________ 9 Establishing an Office _________________________________________________________ 9 Franchising __________________________________________________________________ 9 Direct Marketing ______________________________________________________________ 9 Joint Ventures/Licensing _____________________________________________________ 10 Selling to the Government ____________________________________________________ 10 Distribution & Sales Channels _________________________________________________ 11 Express Delivery ____________________________________________________________ 11 Selling Factors & Techniques __________________________________________________ 11 eCommerce _________________________________________________________________ 11 Trade Promotion & Advertising ________________________________________________ 11 Pricing _____________________________________________________________________ 12 Sales Service/Customer Support _______________________________________________ 12 Protecting Intellectual Property ________________________________________________ 12 Due Diligence _______________________________________________________________ 13 Local Professional Services ___________________________________________________ 13 Principle Business Associations _______________________________________________ 13 Limitations on Selling U.S. Products and Services ________________________________ 14 Web Resources _____________________________________________________________ 14 Leading Sectors for U.S. Exports & Investments __________________________ 15 Apparel ____________________________________________________________________ 15 Automotive _________________________________________________________________ 16 Medical Equipment __________________________________________________________ 17 Pharmaceuticals _____________________________________________________________ 18 Agricultural Sector ___________________________________________________________ 20 2 Customs, Regulations & Standards _____________________________________ 21 Trade Barriers _______________________________________________________________ 21 Import Tariff ________________________________________________________________ 21 Import Requirements & Documentation _________________________________________ 21 Labeling/Marking Requirements _______________________________________________ 22 U.S. Export Controls _________________________________________________________ 22 Temporary Entry ____________________________________________________________ 23 Prohibited & Restricted Imports ________________________________________________ 23 Customs Regulations ________________________________________________________ 24 Standards for Trade __________________________________________________________ 24 Trade Agreements ___________________________________________________________ 26 Licensing Requirements for Professional Services ________________________________ 27 Web Resources _____________________________________________________________ 27 Investment Climate Statement _________________________________________ 28 Executive Summary __________________________________________________________ 28 Openness to and Restrictions upon Foreign Investment ___________________________ 29 Bilateral Investment Agreements and Taxation Treaties ____________________________ 31 Legal Regime _______________________________________________________________ 32 Industrial Policies ___________________________________________________________ 35 Protection of Property Rights __________________________________________________ 37 Financial Sector _____________________________________________________________ 38 State-Owned Enterprises _____________________________________________________ 40 Responsible Business Conduct ________________________________________________ 41 Corruption __________________________________________________________________ 42 Political and Security Environment _____________________________________________ 43 Labor Policies and Practices __________________________________________________ 43 OPIC and Other Investment Insurance Programs _________________________________ 44 Foreign Direct Investment and Foreign Portfolio Investment Statistics _______________ 44 Contact for More Information on the Investment Climate Statement __________________ 46 Trade & Project Financing _____________________________________________ 47 Methods of Payment _________________________________________________________ 47 Banking Systems ____________________________________________________________ 47 Foreign Exchange Controls ___________________________________________________ 47 U.S. Banks & Local Correspondent Banks _______________________________________ 47 Project Financing ____________________________________________________________ 51 3 Multilateral Development Banks ________________________________________________ 51 Financing Web Resources ____________________________________________________ 52 Business Travel _____________________________________________________ 52 Business Customs ___________________________________________________________ 52 Travel Advisory _____________________________________________________________ 52 Visa Requirements ___________________________________________________________ 52 Currency ___________________________________________________________________ 53 Telecommunications/Electronics _______________________________________________ 53 Transportation ______________________________________________________________ 53 Language __________________________________________________________________ 53 Health _____________________________________________________________________ 54 Local Time, Business Hours and Holidays _______________________________________ 54 Temporary Entry of Materials or Personal Belongings _____________________________ 54 Travel Related Web Resources ________________________________________________ 55 INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2018. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES. 4 Doing Business in Lebanon Market Overview Lebanon was the 70th largest market for U.S. exports in 2017. The Lebanese Customs Administration reported that Lebanon’s total imports in 2017 reached USD 19.582 billion, of which $1.442 billion or 7 percent were purchased from the United States. In 2017, the United States ranked as Lebanon’s third largest trading partner behind China and Italy. According to Lebanese Customs statistics, the major U.S. exports to Lebanon were mineral fuel and oil ($452 million), vehicles ($362 million), chemical industrial products ($199 million), machinery and electrical instruments ($112 million), prepared foodstuffs, beverages and tobacco ($56 million), and vegetable products ($56 million). The International Monetary Fund (IMF) estimated that Lebanon's growth will be below potential in the near term, hovering around 1.2-1.5 percent for 2017 and 2018. Growth is projected to increase gradually towards three percent in the medium term. Inflation rose to five percent in 2017, and the IMF forecasts it will remain below five percent in 2018. Lebanon is a free market and highly dollarized economy. The average exchange rate is pegged at 1,507.5 Lebanese Pounds (LBP) to one U.S Dollar. The country has no restrictions on the movement of capital, capital gains, remittances, dividends, or the inflow and outflow of funds. The Lebanese government’s intervention in foreign trade is minimal. Lebanon faces major fiscal policy challenges, notably a high deficit and a high level of public debt which rose to 153 percent of GDP in 2017. Debt service dampens government investment in vital public services such as power generation, roads, bridges, dams, and waste management. The business climate will remain sensitive to domestic and regional political and security developments. In particular,the Syrian crisis has negatively impacted the Lebanese economy, straining further its weak infrastructure and poor service delivery, and cutting off one of the country's major markets and principal transport corridor to the East and the Gulf. The U.S. government has neither a bilateral investment treaty (BIT) with Lebanon, nor an agreement on the avoidance of double taxation. The U.S. government signed a Trade and Investment Framework Agreement (TIFA) with Lebanon in 2006. Since 1999, Lebanon has had observer status at the World Trade Organization (WTO) but has yet to accede to the organization. In 2002, Lebanon signed an association agreement with the European Union that entered into force in 2006. Lebanon announced its intention to join the Extractive Industries Transparency Initiative (EITI), a global standard to promote transparency and good governance in the oil, gas, and mineral sectors. The government is currently

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