Practice guide

The holding SAL in practice

By Gracia Hobeich, lawyer, Beirut Bar Association Updated 29 September 2026

At a glance

Legal basis

Legislative Decree 45/1983 governs the holding company. The Code of Commerce rules on the joint-stock company apply to all matters where Legislative Decree 45/1983 is silent (DL 45/1983, art. 5). Law 10/2022 sets the current tax regime. Law 772/2006 governs the board nationality exemptions. The Tax Procedures Law 44/2008 governs tax registration and beneficial owner disclosures.

Before you draft

The permitted objects are strictly limited. The company may own shares in Lebanese or foreign companies. It may manage companies where it holds shares, and lend to and guarantee those companies (DL 45/1983, art. 2(3)). If the borrower operates in Lebanon, the holding company must hold at least 20 percent of its capital before it can lend to it (DL 45/1983, art. 2(3)). The company may also borrow from banks and issue bonds (DL 45/1983, art. 2(3)). The bonds outstanding at any time cannot exceed five times its capital plus reserves, as shown in the last approved balance sheet (DL 45/1983, art. 2(3)). It may acquire patents or trademarks to lease them. It may acquire movable or immovable property strictly for its operational needs (DL 45/1983, art. 2). The company cannot engage directly in any other business (DL 45/1983, art. 3).

A founder cannot be an undischarged bankrupt. A founder cannot have a conviction within the last ten years for fraud, embezzlement, or issuing bad cheques (Com. Code, art. 79).

The board does not need any Lebanese members. A non-resident foreign chairman does not need a work permit (DL 45/1983, art. 5(2)).

You need at least three founders, and the company must keep at least three shareholders (Com. Code, arts. 77 and 79).

The company name must clearly include the words holding company (شركة قابضة) or holding (هولدنغ) on all papers, announcements, and documents (DL 45/1983, art. 1).

The company must have its head office in Lebanon (DL 45/1983, art. 5(3)). If the articles allow it, board and general assembly meetings may be held outside Lebanon (DL 45/1983, art. 5(3)). You must provide a lease, a title deed, or a written consent for a domiciliation to register the company (DL 45/1983, art. 5(5)).

You must identify the economic right owner (صاحب الحق الاقتصادي) upon registration (Com. Code, art. 26).

Formation, step by step

1. Draft the articles and deposit the capital. Draft the articles of association (النظام الأساسي). Deposit the paid-up capital in a bank account in the company's name and obtain a bank certificate proving payment (Com. Code, art. 85). The company might not be formed within six months. If this happens, each subscriber may ask the judge of urgent matters to appoint a temporary manager (Com. Code, art. 85). This manager withdraws and returns the deposited funds after deducting distribution costs (Com. Code, art. 85). The minimum capital is LBP 30,000,000, and subscribers must pay at least one-quarter of the nominal value per share (Com. Code, arts. 83 and 84). The capital can be denominated in a foreign currency (DL 45/1983, art. 5(1)).
2. Sign the articles. The founders sign the articles before a notary public (كاتب العدل) or deposit a private deed with a notary (Com. Code, art. 80). In practice, founders often sign directly before the Commercial Registry clerk.
3. Hold the constituent assembly. The founders hold a constituent assembly (الجمعية التأسيسية) to verify the incorporation (Com. Code, art. 92). The assembly appoints the first board and auditor if the articles do not name them (Com. Code, art. 93).
4. Elect the chairman. The board of directors (مجلس الإدارة) meets to elect a chairman (رئيس مجلس الإدارة) who acts as general manager (Com. Code, art. 153).
5. Pay the stamp duty. The company must pay the proportional stamp duty of 0.4 percent on the issued shares within three months of the constituent assembly (DL 67/1967, arts. 18 and 49). In practice, confirm the current payment window with the registry.
6. Retain the company's lawyer. A holding company must retain a permanent lawyer on an annual fee, because its paid-up capital exceeds LBP 1,000,000 (Bar Law, art. 62). The registry will not register the company without proof of this retainer (Bar Law, art. 62). The lawyer, not the company, notifies the Bar of the appointment (Bar Law, art. 62). One lawyer may hold such annual retainers for no more than five companies (Bar Law, art. 63).
7. Register the company. The legal representative files a copy of the articles and a two-copy stamped, signed extract at the Commercial Registry, within one month of formation (Com. Code, art. 26). The extract gives the particulars article 26 lists. These include the founders, the object, any branches, the managers and signatories, and the capital. They also include the start and end dates, the company type, the head office lease or title, and the beneficial owner (Com. Code, art. 26). The board then holds the documents to the same one-month deadline for its own filings (Com. Code, art. 98). The company is also recorded in the special register for holding companies in Beirut (DL 45/1983, art. 5(5)).

Formation documents

After registration

The company must notify the Ministry of Finance within two months of starting operations to obtain a tax number (TPL, art. 32). In practice, the company files the beneficial owner declaration (Form M18) at this stage.

Keep a register of beneficial owners and update it as changes occur (TPL, art. 29). For each owner it records the full name, nationality, date of birth, home and correspondence addresses, identity or passport number, tax residence, tax number and share (TPL, art. 29). Keep the documents that show who owns and controls the business for ten years, even after someone stops being a beneficial owner (TPL, art. 29).

You must register for VAT within two months of the end of the quarter where mandatory conditions are met (TPL, art. 32). Holding companies rarely conduct taxable commercial operations, but registration applies if they do.

You must register any employee with the tax administration within three months of them starting work (TPL, art. 32). In practice, you must also register employees with the National Social Security Fund.

All company letters, invoices, and electronic documents must state the company name, its holding status, its capital, the paid-up portion, and its registry number (Com. Code, arts. 36 and 100).

The board presents the registry certificate and commercial circular to the bank to release the deposited capital (Com. Code, art. 85).

Governance

The ordinary general assembly elects board members for up to three years, or the articles appoint them for up to five years (Com. Code, art. 149). The assembly can remove them at any time without cause (Com. Code, art. 150). If removal was not on the agenda, it only takes effect once a later assembly, with removal on its agenda, confirms it (Com. Code, art. 151). Seats may fall vacant between two annual meetings through death, resignation or another cause. The members in office might drop below half the minimum the articles set, or below three. The remaining members must call the general assembly within two months to fill seats (Com. Code, art. 146). The assembly appoints an auditor who is both resident in Lebanon and a Lebanese national (مفوض مراقبة) for up to three years (DL 45/1983, art. 5(4)). The holding company does not need an additional auditor (DL 45/1983, art. 5(4)).

The board has broad powers to act for the company, while the chairman represents it towards third parties (Com. Code, art. 157). Prior board authorisation is required for any contract with the company. This applies to board members, the chairman, and the deputy general manager. Any shareholder holding 5 percent of the voting rights, directly or indirectly, needs it (Com. Code, art. 158). The authorisation takes effect only once the general assembly ratifies it (Com. Code, art. 158).

The board calls the general assembly (Com. Code, art. 164). The annual ordinary assembly must meet in Lebanon within five months of the financial year end (DL 45/1983, art. 5(3)). Board and assembly meetings can occur via remote audiovisual means if the articles allow it, except for approving annual accounts (Com. Code, arts. 156 and 181).

The assembly bureau drafts and signs the minutes (Com. Code, art. 191). You must register any change in the board composition at the Commercial Registry (Com. Code, art. 152). Besides its accounting books, the company keeps a register of registered shares and a register of the shareholders present at each general assembly (TPL, art. 29).

Annual cycle

The holding company pays a flat annual tax of LBP 50,000,000 (DL 45/1983, art. 6(e) as amended by Law 10/2022, art. 41). This applies from its first financial year, regardless of the year's length (DL 45/1983, art. 6(e) as amended by Law 10/2022, art. 41). It is exempt from ordinary corporate income tax and dividend withholding tax (DL 45/1983, art. 6). It pays ordinary tax on income from movable capital on interest from loans to companies operating in Lebanon for less than three years (DL 45/1983, art. 6(a)). It pays 5 percent on management and service fees from its Lebanese subsidiaries, within limits set by decree (DL 45/1983, art. 6(c)). It pays 10 percent on royalties from leasing patents and other reserved rights to institutions in Lebanon, with no other surcharge (DL 45/1983, art. 6(d)). The company may sell shares or quotas in a Lebanese company that it held for less than two years. If it does, the gain is taxed under article 45 of the Income Tax Law (DL 45/1983, art. 6(b)).

Changes during the company's life

Transfer of shares

Shares are freely transferable unless the articles grant a pre-emption right to shareholders or the company (Com. Code, art. 118). The transfer of shares does not require an assembly decision unless it amends the articles. You must notify the Ministry of Finance of any change in shareholders or beneficial owners within the annual tax return (TPL, art. 32).

• Share transfer agreement
• Updated share register extract

Capital increase

The extraordinary assembly decides the increase, which requires a quorum of two-thirds of the capital and a two-thirds majority (Com. Code, arts. 203 and 204). The old capital must be fully paid before any increase (Com. Code, art. 205). You must pay the 0.4 percent stamp duty within one week of the assembly verifying the subscription (DL 67/1967, art. 49).

• Extraordinary assembly minutes
• Board report
• Auditor report
• Bank certificate for new funds
• Updated articles

Capital reduction

The extraordinary assembly decides the reduction, ensuring third-party rights are protected (Com. Code, art. 208). You must publish the decision in the Official Gazette, and creditors have three months to object (Com. Code, art. 208).

• Extraordinary assembly minutes
• Auditor report
• Publication proof
• Updated articles

Change of managers or directors

The ordinary assembly elects new board members, or the board elects a new chairman (Com. Code, arts. 146 and 153). Departures may cut the board below half its minimum size or below three directors. The remaining members must then call the general assembly within two months to fill the seats (Com. Code, art. 146). You must register the change at the Commercial Registry, which does not require any additional formal documents beyond the minutes (Com. Code, art. 152).

• Assembly or board minutes
• ID of new member
• Acceptance letter

Amendment of the articles

The extraordinary assembly decides any amendment, such as name, object, or duration (Com. Code, art. 200). Changing the object requires a higher quorum of three-quarters of the capital (Com. Code, art. 202). You must register the amendment at the Commercial Registry (Com. Code, art. 27).

• Extraordinary assembly minutes
• Updated articles

Change of signatories

The board of directors delegating signature powers to the chairman or a general manager (Com. Code, art. 157). You must register this delegation at the Commercial Registry (Com. Code, art. 26).

• Board minutes
• New commercial circular

Conversion to another form

The extraordinary assembly decides the conversion with a quorum of three-quarters of the capital (Com. Code, art. 202). The conversion does not create a new legal personality, but it only binds third parties after registration and a one-month publication period (Com. Code, art. 45).

• Extraordinary assembly minutes
• Auditor report
• New articles

Merger or division

The extraordinary assembly first approves the merger. Within one month after this approval, the companies deposit the merger project at the registry and publish a summary of it (Com. Code, art. 213 bis 2). The assembly decides based on a board report and a unified auditor report (Com. Code, art. 213 bis 3). Creditors can object within one month of the last publication (Com. Code, art. 213 bis 9). An objection does not stop the merger. However, the court may order payment or security. If the company does not provide it, the merger cannot be set up against that creditor (Com. Code, art. 213 bis 9).

• Merger project
• Board report
• Unified auditor report
• Special auditor report
• Extraordinary assembly minutes

Dissolution and liquidation

The company dissolves when its term expires, its object is achieved or becomes impossible, or if the assembly decides to dissolve it early (Com. Code, art. 216). The company may lose three-quarters of its capital. If this happens, the board must call an extraordinary assembly (Com. Code, art. 216). The assembly decides whether to dissolve the company early or reduce its capital (Com. Code, art. 216). It may also take some other appropriate measure (Com. Code, art. 216). The board might not call the assembly, the assembly might not reach quorum, or it might refuse to act. In these cases, any shareholder may ask the court to order the appropriate measure or the dissolution (Com. Code, art. 217).

1. Hold an assembly. The extraordinary assembly votes to dissolve the company and appoints one or more liquidators (Com. Code, arts. 216 and 220).
2. Publish the decision. You must publish the dissolution decision (Com. Code, art. 218).
3. Register the dissolution. You register the dissolution at the Commercial Registry (Com. Code, art. 27).

The liquidator takes over management, receives the board's accounts, and prepares an annual balance sheet if liquidation exceeds one year (Com. Code, arts. 222 and 223). The auditors stay in office together with the expert the court appointed (Com. Code, art. 221). Both then supervise the liquidation from that point onward. To close the liquidation, the liquidator prepares a final balance sheet showing each shareholder's share (Com. Code, art. 224). The auditor reports on the accounts, and the ordinary assembly approves them and discharges the liquidator (Com. Code, art. 225). The liquidator first files the closing documents from article 225 with the registry. The registry supervising judge orders the company struck off the Commercial Registry once liquidation ends (Com. Code, art. 30). In practice, you must first obtain tax and social security clearance certificates.

Pitfalls

• Failing to include the words holding company (شركة قابضة) next to the name on all documents violates the law (DL 45/1983, art. 1).
• Engaging in activities outside the strict statutory list subjects the company to ordinary corporate tax and a 50 percent penalty (DL 45/1983, art. 7).
• The company cannot directly own more than 40 percent in more than two Lebanese companies in the same industrial, commercial or other field. This applies if that ownership would breach the anti-monopoly and anti-price-gouging rules of Legislative Decree 32/1967, article 1 (DL 45/1983, art. 4). This rule does not apply to investments outside Lebanon (DL 45/1983, art. 4). Breach exposes the company to the penalties of that decree (DL 45/1983, art. 8).
• Failing to pay the stamp duty on issued shares within three months incurs fines (DL 67/1967, art. 49).
• Distributing fictitious dividends makes board members civilly liable to anyone harmed, and auditors as well unless they prove they made no supervision error (Com. Code, art. 107). It is a criminal offence if the dividends were paid with no balance sheet, or on a fraudulent inventory, balance sheet or financial statements (Com. Code, art. 107).
• Failing to deposit the annual financial statements at the registry incurs a fine of LBP 100,000 per missing document per year (Com. Code, art. 102).
• Dormant companies can also be struck off by the Ministry of Finance without a liquidation (Decision 208/2020, art. 2). This covers a company that never operated, or one that stopped with no assets and no employees. The company must owe nothing to third parties. It must have paid all taxes and NSSF dues (Decision 208/2020, arts. 2 and 3). The Ministry prepares and publishes the list within three months of the start of every year (Decision 208/2020, arts. 4 and 7). The company, public bodies and creditors may object to the Ministry within three months of the last publication (Decision 208/2020, art. 5). A company that does not object is struck from the tax rolls, the registers and the NSSF (Decision 208/2020, art. 6). Check the Ministry's list before filing anything for a dormant client company.

Questions lawyers ask

Sources

• Code of Commerce, Legislative Decree No. 304 of 24 December 1942, as amended, notably by Law No. 126 of 29 March 2019
• Legislative Decree No. 45 of 24 June 1983 on holding companies, as amended
• Law No. 8 of 11 March 1970 on the organisation of the legal profession, as amended
• Tax Procedures Law No. 44 of 11 November 2008, as amended
• Budget Law No. 10 of 15 November 2022
• Legislative Decree No. 67 of 5 August 1967 on fiscal stamp duty, as amended
• Decision No. 208 of 15 June 2020 of the Ministers of Finance and Justice on striking off dormant companies

Statutory text as published by the Lebanese University Centre for Research and Studies in Legal Informatics, read in Arabic. Citations give the article as amended to date. Registry and tax office practice changes without notice, so confirm the desk’s current requirements before filing.

General information, not legal advice. Current as at 29 September 2026.

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