Lebanon
AI Agent Legal Status: undefined · Autonomy: none
Legal Framework
Lebanon's legal and regulatory environment has been severely impacted by the economic crisis that began in 2019, including the collapse of the banking sector, hyperinflation, and institutional paralysis. While Lebanon historically had a vibrant tech startup scene centered around Beirut Digital District and supported by organizations like the Banque Du Liban's Circular 331, the ongoing crisis has disrupted regulatory capacity. There is no AI-specific legislation, and the focus remains on economic recovery and institutional rebuilding.
Key Laws & Regulations
- ◆Electronic Transactions and Personal Data Law No. 81 of 2018
- ◆BDL Circular 331 (startup investment incentive, largely inactive)
- ◆Banking Secrecy Law of 1956
- ◆Code of Commerce 1942 (amended)
- ◆Intellectual Property Laws
- ◆Telecommunications Law No. 431 of 2002
Business Formation
Company formation follows the Code of Commerce and requires registration with the Commercial Register. Common structures include SAL (public joint stock), SARL (LLC), and offshore companies. The Beirut Digital District offered tech-specific incentives but has been impacted by the crisis. Foreign ownership is generally permitted but banking sector restrictions and capital controls complicate financial operations.
Tax Implications
Corporate income tax is 17%. Personal income tax is progressive up to 25%. Capital controls imposed since 2019 severely restrict the movement of funds in and out of the country. A parallel exchange rate economy creates pricing uncertainty. VAT is 11%. The tax system is technically functional but enforcement and collection have been significantly weakened by the crisis.
Opportunities
Lebanon's large and well-connected diaspora could eventually channel investment back into a recovered tech ecosystem. The country's skilled workforce, while diminished by emigration, retains deep expertise in software development and design. If economic stabilization occurs, Lebanon's low cost base and historically liberal business environment could attract AI companies seeking a creative hub in the Levant.
Highlights
Lebanon historically had one of the region's most talented tech workforces, with strong diaspora connections to Silicon Valley, Europe, and the Gulf. The country's multilingual population (Arabic, French, English) and cultural creativity fostered a unique startup ecosystem. Circular 331 was once a pioneering fintech incentive program that attracted international attention.
Risks & Challenges
The ongoing economic and financial crisis has decimated the banking sector, imposed severe capital controls, and caused massive brain drain of tech talent. Institutional paralysis means regulatory modernization is effectively frozen. Hyperinflation and currency instability make financial planning and operations extremely difficult. Basic infrastructure including electricity and internet connectivity has deteriorated significantly.