Schemes in Securities and Other Financial Instruments: A Lifeline for Lebanon’s Economy

In an effort to stimulate economic growth and attract capital, the Lebanese government has implemented a series of laws and regulations aimed at simplifying tax procedures, combating financial crimes, and promoting transparency.

Simplified Tax Procedures

Law No. 44, passed in 2008, unified and simplified tax procedures, making it easier for individuals and businesses to navigate the tax system. This law was later amended by Laws No. 60/2016 and No. 106/2017, further streamlining tax processes.

Combating Financial Crimes

Law No. 160, passed in 2011, prohibits insider trading based on material non-public information, promoting transparency and fairness in the financial markets.

• The law also strengthens measures to prevent money laundering while preserving banking secrecy.
• Lebanon has joined international efforts to combat terrorism financing, with Law No. 53 of 2015 authorizing the government to join the International Convention for the Suppression of the Financing of Terrorism signed in New York in 1999.

Promoting Tax Cooperation and Transparency

Lebanon has implemented laws aimed at promoting tax cooperation and transparency, including:

• Law No. 55 of 2016, as amended by Decree No. 1022 of 2017, provides for the automatic exchange of information for tax purposes with foreign authorities.
• Law No. 74 of 2016 defines tax obligations for individuals carrying out trustee activities.
• Law No. 75 of 2016 abolished bearer shares and promissory notes.

Encouraging Investment

To promote economic growth, the government has implemented laws aimed at encouraging investment, including:

• Law No. 48 of 2017 regulates partnerships between the public and private sectors in key industries such as electricity, telecommunications, and air transport.
• Article 15 of Law No. 64 of 2017 increased the corporate income tax rate for limited companies from 15% to 17%.
• Article 17 of the same law raised the tax rate on interest and revenue of all bank liabilities from 5% to 7%.

Stimulating Economic Activity

Law No. 66 of 2017 allowed companies to carry out an exceptional revaluation of their fixed assets to correct the effects of monetary inflation, aimed at stimulating economic activity and promoting investment.

Regulating Electronic Transactions and Personal Data

The government has also taken steps to regulate electronic transactions and personal data, including:

• Law No. 81 of 2018 governs electronic commerce, contracts, and payment transactions.
• The law protects personal data confidentiality and ensures the security of online transactions.

These schemes are expected to have a positive impact on Lebanon’s economy by promoting transparency, combating financial crimes, and encouraging investment and economic growth.