TSEZ is the first special economic zone in Lebanon and it is designed to develop a multi-use economic zone complete with all the required infrastructure and utilities and to be one of the most attractive in the Middle East region.
Tripoli Special Economic Zone (TSEZ) is administrated, regulated and developed by TSEZ Authority (TSEZA) which is a financially, legally and administratively independent government entity. TSEZA includes a Board of Directors comprising a President and six members from the private sector, who serve for five-year renewable terms. The Board of Directors is the highest governing body of this Authority.
The creation of the TSEZ will attempt to overcome the barriers that have historically stymied foreign direct investment and prevented many local private sector businesses from expanding their operations in Lebanon.
TSEZ is a method of stimulating economic activity, encouraging investment and attracting workers.
It is designed to provide local and international businesses with incentives to invest in development and infrastructure through reductions in taxes and regulation. TSEZ is planned to include a world-class infrastructure facility and is a true free Economic Zone in the region and the only such economic zone in Lebanon. Situated in Tripoli, the second largest city in Lebanon, and on the shortest path out to Syrian-Turkish trade routes, connecting east and west. It provides easy access to the growing economies of the Gulf, Levant and North Africa. Tax benefits are the most common form of incentive and can take the form of tax breaks or a tax holiday.
In addition to Tax benefits TSEZ offers a set of incentives for its designated users:
100% customs exemption on imported raw material
Duty-free export of finished goods
Duty-free import of construction material, equipment, office machinery, and spare parts
100% exemption on VAT and excise tax for goods and services destined for exports
100% exemption on corporate profit tax (provided that not less than 50% of the workforce is Lebanese and the value of fixed assets pr capital is greater than the US $ 300,000)
100% exemption on withheld tax on salaries for employees of tenants and on social security contributions
100% exemption on building permit fees and built property tax
100% exemption on shares and bonds issued by companies with TSEZ
Total capital and profit repatriation
Unrestricted currency conversion
100% foreign ownership of companies permissible
Flexible Labor-law regulations with up to 50% Foreign Labor allowed
No limitation on Local-market sales as a percentage of production
No nationality conditions for board0of-directors representation
Equal treatments between foreign and local investments
No restrictions (export licenses) for local suppliers selling products of firms in the zone
One-stop-shop: all business procedures streamlined through a one-stop-shop on the zone.
Sectors based incentives
The TSEZ model encourages value-added and knowledge-intensive industries and considers them the key target of the IDR (Incentive Distribution Rights). Six service based sectors are targeted for exemptions:
Financial advisory and consulting services
Related activities Incentives provided:
Exemption from Foreign Investment Committee rules
Freedoms relating to foreign employment
Exemption from corporate income tax for a period of 10 years from the commencement of activities
Exemptions from withholding tax on royalty and technical fee payment to nonresidents for a period of 10 years from the commencement of activities
Skilled foreign workers are exempt from tax on car purchases