STRENGTH & SOPHISTICATION

Lebanon 2013 | EXECUTIVE GUIDE | INTERVIEW

TBY talks to Salim El Meouchi, Chairman & Senior Partner at Badri and Salim El Meouchi Law Firm, on the legal framework for setting up a business in Lebanon.

Salim El Meouchi
BIOGRAPHY
Salim El Meouchi studied Law at Université Saint-Joseph in Beirut, working at the law offices of Cheikh Béchara El Khoury and Maroun El Meouchi as a Trainee between 1967 and 1970. He was also a Shareholder of Baillart et Associés until 2007. He is the Chairman and Senior Partner at Badri and Salim El Meouchi Law Firm and Badri and Salim El Meouchi LLP, located in Qatar.

What main services do you offer to investors and foreign companies?

Our firm is often the first port of call for clients looking to invest or do business in Lebanon and in the region, particularly in Qatar and Iraq. A significant proportion of our clients are foreign, including individuals, SMEs, and multinationals. Our primary role is to advise our clients on all matters legal and regulatory. Our team of more than 30 lawyers covers a wide range of practice areas, including, among others, commercial, corporate, real estate, banking, finance, and oil and gas law. But through our exposure to so many transactions over the past decades, we can often offer valuable insights to our clients when navigating this market. This is my 46th year in the firm and the profession. I cannot begin to tell you the changes I have seen in how business is done. Just like our clients, we have adapted to the constantly evolving business landscape, learning new techniques, new sectors, and new transaction structures as they develop.

What should foreign companies be aware of before engaging in their start-up phase?

There is no need to reinvent the wheel. Whatever you require, there are people in Lebanon who can help you get it done well and quickly. We are very lucky in Lebanon to have, among other things of course, very high-caliber human resources, including lawyers, accountants, bankers, M&A advisors, financial specialists, and fiduciary specialists. My primary advice to foreign companies, which no doubt applies everywhere, is to make sure they surround themselves with the right local advisors. Beyond this, foreign companies should be aware of the structures that are available for their businesses in Lebanon. There are various forms of companies that can be set up, as well as branches, representative offices, and more, or they can operate in a joint-venture type structure with an existing Lebanese entity. Each structure has its benefits and drawbacks, so it's important to find something that makes sense for each specific transaction. New entrants to this market should take the time to explore the market well: it's a special market, with considerable potential, but it's important to understand it properly. And, finally, don't underestimate the value of Beirut as a regional platform.

What regulatory changes are we likely to see over the medium term?

A new capital markets law has gone into effect, and it is likely to bring in some changes over the coming months and years as it evolves and settles. Finance is a sector that has always moved fast, and Lebanon has always been very good at balancing between evolving its regulatory regime while not taking too many risks; this is what saved us from suffering direct exposure to the financial crisis, although, of course, the country was somewhat affected by knock-on effects, which is inevitable. Another sector the regulatory regime which often comes up is oil and gas. As you know, there are significant exploration and exploitation opportunities in offshore hydrocarbons, and so far our governments have been ineffective in laying down the regulatory framework for this. We hope that 2014 will see a lot of activity in this field. Finally, I would have liked to see some modernization of our code of commerce, notably with regard to corporate structures, in order to integrate some of the flexibilities that other jurisdictions enjoy. However, I do not think that we will see a change in this in 2014, as it is not as pressing as other sectors.

How would you assess Lebanon's legal environment?

Lebanon's legal environment is, by and large, quite solid. Of course, there are some challenges, and some areas of the legal framework require an overhaul. However, overall, the legal framework has many virtues. We have an extensive body of laws, and these are generally well drafted and applied by legal practitioners and the judiciary. We also have some sophistications that are not very well known and, in my view, under-used. For example, Lebanon has a law governing the “fiducie" structure, which fulfills many of the advantages of the “trust." Coupled with Lebanon's strong banking sector and good tax regime, the fiducie can be a very powerful tool for a variety of purposes. I can therefore safely say that, with the right partners and advice, the legal environment is not an obstacle to conducting business in Lebanon.