LEBANON Trends and Developments Contributed by: Joseph Nasrallah, Jad Skaff and Mia Chbeir, HNS Legal
often requiring supermajority or unanimous consent. Enhanced information rights provide broader access to company data beyond statutory requirements. Anti- dilution rights, such as preferential subscription rights and down-round protection, shield minority holdings from devaluation. Share transfer rights and restrictions offer mechanisms such as the right of first refusal, lock-up periods, tag-along rights (allowing minorities to exit alongside majority shareholders) and drag- along rights (allowing majority shareholders to force a sale, subject to thresholds). Finally, liquidation pref - erences dictate prioritised distributions in the event of a company sale or liquidation. Regulatory challenges for foreign investors Foreign investors looking to conduct business in Leb - anon encounter several regulatory obstacles. A key challenge lies in ownership restrictions within specific sectors, notably in telecoms and utilities. The Leba - nese government often maintains a controlling stake within these sectors, or mandates that the ownership majority be held by Lebanese persons. This can sig - nificantly limit foreign investment opportunities and potentially stifle competition. Beyond ownership issues, bureaucratic hurdles pre - sent another significant obstacle. Navigating Leba - non’s administrative processes can be a complex and time-consuming endeavour. For example, registering land, which is a crucial step in many business ven - tures, involves intricate procedures that often lead to delays. Similarly, obtaining necessary approvals from government agencies can be a slow and arduous pro - cess, further hindering deal timelines. Customs bot - tlenecks where goods are held up in ports or at bor - ders, add another layer of complexity that can disrupt supply chains. In February 2026, Lebanon secured approximately USD150 million in World Bank financing for the Leba - non Digital Acceleration Project (LDAP). The project aims to strengthen the country’s digital infrastructure, including secure data hosting capabilities, cybersecu - rity frameworks and the digitalisation of priority pub - lic services. Although still at an early implementation stage, the initiative is expected to gradually reduce administrative bottlenecks and improve the reliability
of government interactions relevant to corporate reg - istrations, licensing and transaction filings. The government has a National Anti-Corruption Strat - egy (2020–2025) that aims to streamline matters, protect whistle-blowers and align with international transparency standards. In reality, however, enforce - ment has been fairly weak. The absence of political consensus with the overlapping government authori - ties is preventing any real change. This results, in turn, in delaying M&A activity as foreign investors look for clearer and more reliable operating conditions. There - fore, despite Lebanon’s commitment to adopting and abiding by international anti-corruption standards through entry into relevant treaties, corruption remains a persistent issue in many official interactions. This can create an uneven playing field for foreign inves - tors, who may find themselves facing demands for bribes or other illicit payments. Such practices not only increase the cost of doing business but also cre - ate an environment of uncertainty and risk, potentially deterring foreign investment. Amendments to laws Recent legislative efforts include the following. • Law No 81 of 2018 (E-Transactions and Personal Data Protection), with its long-awaited implement - ing Decree No 14115 of 2024 : This aims to update Lebanon’s legal environment for digital transac - tions, potentially boosting confidence in e-com - merce and fintech deals. • Law No 126 of 2019 (Amending the Code of Com - merce) : This law modernises certain business registration and governance mechanisms, although its practical impact on large-scale M&A remains modest, given enforcement constraints. • Law No 40 of 2026 (2026 Budget Law): This law introduced enhanced reporting obligations relat - ing to changes in beneficial ownership information. Share transfers and changes in ultimate beneficial ownership must now be declared promptly to the competent authorities. This development increases compliance scrutiny in M&A transactions and rein - forces the importance of accurate UBO disclosure during due diligence and post-closing filings.
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