Distribution Channels


Most of the products imported to Lebanon enter either through Beirut International Airport (BIA) or Beirut Port. Foreign exporters rely on local companies to clear and receive the imported products from the Customs Authority at Beirut Port and BIA, and to distribute them in the market. Although traditional markets and souks exist in Lebanon, most imported products are distributed through modern retail stores and supermarket chains spread throughout the country.

Market Entry Strategy
Foreign companies interested in doing business in Lebanon are advised to hire a Lebanese agent or distributor. Networking and lengthy investigation are necessary to find an appropriate partner. The Investment Development Authority of Lebanon (IDAL), a public agency responsible for promoting investments in Lebanon, has a “One-Stop Shop” service to issue permits and licenses for investors.

Using an Agent or Distributor
Foreign 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 foreign company to bid for government tenders and best market its products.

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. Foreign 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.

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. Franchises are also available for many other products and services in Lebanon.

A Lebanese Franchise Association was launched in 2007 to promote the franchise sector in Lebanon and help Lebanese franchises expand in the region. Many Lebanese food franchises already opened branches in UAE, Saudi Arabia and Egypt.

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 U.S. At least one show, fair, or exhibition is scheduled for each month of the year.

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.

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. 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.

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 products are still valued by high-end consumers who appreciate quality, technology, innovations and value-added.

Electronic Commerce
E-commerce is in growing stage 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.

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 a 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.