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Selling U.S. Products and Services

Using an Agent or Distributor

U.S. companies are advised to establish a branch or rely on a Lebanese agent when doing business in Lebanon. The agent may be a partnership, a sole proprietorship, a joint-stock company or a limited liability company. The agent can act on behalf of the U.S. company to bid for government tenders and best market its products.

The U.S. Commercial Service can help U.S. companies find reliable Lebanese agents through the International Partner Search (IPS) service. IPS is a customized search for qualified Lebanese representatives, agents or distributors for U.S. firms. More information on IPS can be found at http://www.buyusa.gov/lebanon/en/internationalpartnersearch.html .

Branch offices may undertake any business activity permitted by Lebanese law with no minimum capital or performance requirements. A foreigner who wishes to establish a branch in Lebanon must have a residence permit from the Sûreté Générale and a work permit from the Ministry of Labor. Foreign companies need 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 be registered at any of the four regional Chambers of Commerce and Industry.

The Investment Development Authority of Lebanon (IDAL) has a “One-Stop Shop” service to issue permits and licenses for investors. IDAL coordinates with all concerned Ministries and public authorities. Further information about IDAL and its services are available at http://www.idal.com.lb .

Franchising

With the successful establishment of international brand names and their continuous expansion across the country, franchising has become one of the fastest growing business sectors in Lebanon. The most commonly known are international fast food outlets such as McDonald's, Starbucks, Pizza Hut, Kentucky Fried Chicken, Baskin Robbins, Hardees, Chili's, Hard Rock Café, Dunkin' Donuts, Burger King, Subway, Clucksters’ and Applebee’s.

Franchises are also available for many other products and services in Lebanon. In the area of clothing, for example, the UK retailers Storehouse, Mothercare, and Next, and the Spanish clothing chains Zara, Mango, Massimo Dutti, Pull and Bear, Stradivarius, and Bershka have all opened large stores. Other non-food franchises in Lebanon include New Horizons, Hertz Car Rental, Budget Rent-a-Car, Thrifty Rent-a-Car, Florsheim Shoes and many others.

In April 2008, the Lebanese Franchise Association signed a Memorandum of Understanding with the International Franchise Association during the International Franchise Expo in Washington, DC to foster international training and sharing of information.

Direct Marketing

With around $100 million spent annually on advertising, the advertising industry has proven to be the most effective marketing channel in Lebanon. Advertising can be through TV, radio, billboards and trade fairs. Numerous international fairs and trade shows are held in Lebanon, with significant participation from European, Asian, Middle Eastern, and, increasingly, U.S. companies. At least one show, fair, or exhibition is scheduled for each month of the year.

For additional information about trade fairs in Lebanon, please go to please go to http://www.buyusa.gov/lebanon/en/trade_fairs_lebanon.html or contact the U.S. Embassy’s Commercial Service at http://www.buyusa.gov/lebanon/en/contactus.html

Joint Ventures/Licensing

Lebanese law does not consider joint ventures to be separate legal entities and does not require them to be registered in the Commercial Register. Joint ventures are established through a contract between at least two partners without publicizing formalities.

The Investment Development Authority of Lebanon (IDAL) has a “One-Stop Shop” service to issue licenses for investors. Further information is available at www.idal.com.lb.

Selling to the Government

The Lebanese government comprises 19 ministries. Each ministry is responsible for its own procurement that is usually carried out via public tenders and published on the ministries’ websites. A list of ministries and their websites can be found in the Web Resources section of this chapter. U.S. companies can apply directly for these tenders or can rely on local agents to bid on their behalf.

The Council for Development and Reconstruction (CDR), a public authority established in 1977, is the public unit responsible for large government projects. These are usually carried out through public tenders. However, there are occasional purchases via direct contract when attractive financing protocols are made available by the foreign companies' governments. More information about CDR and its projects can be found at www.cdr.gov.lb.

Distribution and Sales Channels

The Council for Development and Reconstruction (CDR), a public authority established in 1977, is the public unit responsible for large government projects. These are usually carried out through public tenders. However, there are occasional purchases via direct contract when attractive financing protocols are made available by the foreign companies' governments. More information about CDR and its projects can be found at http://www.cdr.gov.lb .

Selling Factors/Techniques

The Lebanese market is generally characterized as being free and price sensitive. Sales material can be in English, French or Arabic. Many European and Asian brands introduced into the market have managed to earn a considerable market share. However, high quality U.S. products are still valued by high-end consumers who appreciate quality, technology, innovations and value-added. Moreover, demand for U.S. goods has been increasing due to the decline of the dollar relative to the Euro.

Electronic Commerce

E-commerce is in its early stages in Lebanon. Some e-commerce ventures, such as online shops, auctions, services, and content publishing, have been established. However, these ventures remain limited because there is no appropriate legal and regulatory framework for e-transactions. The reliability of online transactions has not gained widespread acceptance by the Lebanese population. Internet and telecommunications prices remain high. In 2004, the European Union financed the establishment of a project in Lebanon to promote the development of e-commerce. The project’s website is www.ecomleb.org.

Trade Promotion and Advertising

Lebanon has become a regional center for the advertising industry, despite stiff competition from Arab Gulf states. Lebanon enjoys a sophisticated domestic audience and a thriving media sector. There are nine television stations, 14 newspapers, over 30 magazines and many radio stations.

Television remains the favored medium of advertising and captures half of the market. Other mediums include print, billboards, radio and cinema.

There are many Arabic-language dailies in Lebanon, as well as the English-language Daily Star (http://www.dailystar.com.lb) and the French-language L'Orient Le Jour. Most newspapers have websites displaying the latest news on Lebanon. Naharnet is a web portal offering updated political and business information and links. It may be reached at http://www.naharnet.com. Another useful website includes http://www.lebanonlinks.com.

Major trade fairs organizers in Lebanon are International Fairs and Promotion (www.ifpexpo.com), Promofair (www.promofair.com.lb), BIEL Center (www.bielcenter.com) and Hospitality Services (www.hospitalityservices.com.lb).

Major business magazines are the English-language Lebanon Opportunities, Executive Magazine, Today’s Outlook and Arab Ad, the French-language Le Commerce du Levant and the Arabic-language Business Week, Al-Iktissad Wal Amal and Al-Mourakeb Al-Inmaii.

Pricing

Prices of imported goods are subject to Customs fees and a Value-Added Tax (VAT) of ten percent. The Consumer Protection Department at the Ministry of Economy and Trade controls prices on bread and petroleum derivatives. The Technical Center for Price Control at the Ministry of Economy and Trade surveys supermarket prices of consumer goods every two months. The Ministry of Health also controls the price of pharmaceuticals.

Sales Service / Customer Support

Customer service is highly valued in Lebanon. A number of leading Lebanese companies have sales service and customer support unit. Such services are critical to maintaining market share. In January 2005, Lebanon passed a new Consumer Protection Law, which calls for the establishment of a number of mechanisms for better protection of consumers.

Protecting Your Intellectual Property

Several general principles are important for effective management of intellectual property rights in Lebanon. First, it is important to have an overall strategy to protect IPR. Second, IPR is protected differently in Lebanon than in the U.S.; new products are automatically protected when the patents, trademarks, and industrial designs, are deposited with the ministry of economy and trade without further examination. Third, industrial property such as patents, trademarks, and industrial design must be registered in Lebanon under local IP laws. Copyrights are protected and enforced without registration; registration is optional for Lebanese and foreign right holders. Companies may wish to seek advice from local attorneys or IP consultants. The U.S. Commercial Service can provide a list of local lawyers upon request.

It is vital that companies understand that intellectual property is primarily a private right and that the U.S. government generally cannot enforce rights for private individuals in Lebanon. It is the responsibility of the rights' holders to register, protect, and enforce their rights where relevant, retaining their own counsel and advisors. While the U.S. government is willing to assist, there is little it can do if the rights holders have not taken these fundamental steps necessary to securing and enforcing their IPR in a timely fashion. Moreover, in many countries, rights holders who delay enforcing their rights on a mistaken belief that the USG can provide a political resolution to a legal problem may find that their rights have been eroded or abrogated due to doctrines such as statutes of limitations, laches, estoppel, or unreasonable delay in prosecuting a law suit. In no instance should USG advice be seen as a substitute for the obligation of a rights holder to promptly pursue its case.

It is always advisable to conduct due diligence on partners. Negotiate from the position of your partner and give your partner clear incentives to honor the contract. A good partner is an important ally in protecting IP rights. Keep an eye on your cost structure and reduce the margins (and the incentive) of would-be bad actors. Projects and sales in Lebanon require constant attention. Work with legal counsel familiar with Lebanon laws to create a solid contract that includes non-compete clauses, and confidentiality / non-disclosure provisions.

It is also recommended that small and medium-size companies understand the importance of working together with trade associations and organizations to support efforts to protect IPR and stop counterfeiting. There are a number of these organizations, both Lebanon or U.S.-based. These include:
- The U.S. Chamber and local American Chambers of Commerce
- The National U.S.-Arab Chamber of Commerce
- National Association of Manufacturers (NAM)
- International Intellectual Property Alliance (IIPA)
- International Trademark Association (INTA)
- The Coalition Against Counterfeiting and Piracy
- International Anti-Counterfeiting Coalition (IACC)
- Pharmaceutical Research and Manufacturers of America (PhRMA)
- Biotechnology Industry Organization (BIO)
- American Lebanese Chamber of Commerce (Amcham)
- Chamber of Commerce, Industry and Agriculture Beirut (CCIAB)
- Chamber of Commerce, Industry and Agriculture Saida (CCIAS
- Chamber of Commerce, Industry and Agriculture Tripoli (CCIAT)
- Chamber of Commerce, Industry and Agriculture Zahle (CCIAZ)
- Association of Lebanese Industrialists (ALI)
- Professional Computer Association (PCA)

IPR Resources

A wealth of information on protecting IPR is freely available to U.S. rights holders. Some excellent resources for companies regarding intellectual property include the following:

- For information about patent, trademark, or copyright issues -- including enforcement issues in the US and other countries -- call the STOP! Hotline: 1-866-999-HALT or register at http://www.StopFakes.gov

- For more information about registering trademarks and patents (both in the U.S. as well as in foreign countries), contact the US Patent and Trademark Office (USPTO) at: 1-800-786-9199.

- For more information about registering for copyright protection in the US, contact the US Copyright Office at: 1-202-707-5959.

- For US small and medium-size companies, the Department of Commerce offers a "SME IPR Advisory Program" available through the American Bar Association that provides one hour of free IPR legal advice for companies with concerns in Brazil, China, Egypt, India, Russia, and Thailand. For details and to register, visit: http://www.abanet.org/intlaw/intlproj/iprprogram_consultation.html.

- For information on obtaining and enforcing intellectual property rights and market-specific IP Toolkits visit: http://www.StopFakes.gov. This site is linked to the USPTO website for registering trademarks and patents (both in the U.S. as well as in foreign countries), the U.S. Customs & Border Protection website to record registered trademarks and copyrighted works (to assist customs in blocking imports of IPR-infringing products) and allows you to register for webinars on protecting IPR.

IPR Climate in Lebanon

Lebanon’s intellectual property right (IPR) legislation is generally compliant with international standards. However, enforcement is weak, with major challenges in the pharmaceutical industry and cable piracy. It is advisable that U.S. companies register their patents and trademarks at the Ministry of Economy when introducing them into the market. We recommend contacting a lawyer whenever faced with an IPR violation. A list of lawyers practicing in Lebanon is available at the U.S. Embassy’s website at http://lebanon.usembassy.gov or from the Department of State's American Citizen Services Office in the Bureau of Consular Affairs at http://www.travel.state.gov .

In 2007, the Unites States Trade Representative moved Lebanon from the “Priority Watch List” to “Watch List” due to improvements in IPR enforcement efforts by the police. However, problems persist with the widespread availability of pirated optical discs and rampant cable piracy. Registration of copycat and counterfeit pharmaceuticals has remained problematic, although the GOL is working on increasing the protection of undisclosed information. Counterfeiting of trademarked goods continues. Furthermore, the judiciary needs to improve the implementation of IPR laws. Three major IPR awareness campaigns were undertaken during 2008 by the private and public sectors. New IPR laws and amendments to increase IPR protection still await parliamentary ratification. Lebanon has not yet joined the latest text of the Berne Convention or ratified the WIPO Copyright Treaty or the WIPO Performances and Phonograms Treaty.

Due Diligence

U.S. firms wishing to do business in Lebanon are encouraged to conduct due diligence on their potential partners. 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, credit-worthiness, trading experience, market coverage, business connections in the country, as well as an Embassy evaluation to help U.S. firms assess risks, reliability and capability. More information about ICP can be found at http://www.buyusa.gov/lebanon/en/internationalcompanyprofile.html .

Local Professional Services

Web Resources

Ministries:

Ministry of Agriculture: http://www.agriculture.gov.lb
Ministry of Culture: http://www.culture.gov.lb
Ministry of Economy & Trade: http://www.economy.gov.lb
Ministry of Education & Higher Education: http://www.higher-edu.gov.lb
Ministry of Energy and Water: http://www.energyandwater.gov.lb
Ministry of Environment: http://www.moe.gov.lb
Ministry of Finance: Customs Administration: http://www.finance.gov.lb
Ministry of Foreign Affairs & Emigrants: http://www.emigrants.gov.lb
Ministry of Industry: http://www.industry.gov.lb
Ministry of Information: http://www.nna-leb.gov.lb
Ministry of Interior & Municipalities: http://www.moim.gov.lb
Ministry of Justice: http://www.justice.gov.lb
Ministry of Labor: http://www.labor.gov.lb
Ministry of National Defense: http://www.lebarmy.gov.lb
Ministry of Post and Telecommunications: http://www.mpt.gov.lb
Ministry of Public Health: http://www.public-health.gov.lb
Ministry of Social Affairs: http://www.socialaffairs.gov.lb
Ministry of Tourism: http://www.lebanon-tourism.gov.lb
Office of the Minister of State for Administrative Reforms (OMSAR): http://www.omsar.gov.lb

Governmental Organizations:

Council for Development and Reconstruction: http://www.cdr.gov.lb
Investment Development Authority of Lebanon (IDAL): http://www.idal.com.lb
Ogero: http://www.ogero.gov.lb
 

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