- Overview: Lebanon
- Global HR Compliance
- Global PEO and Payroll
- Work Permit for Hiring Expats via PEO
- Expand without a company set up
- Contractor vs. Employee: Which Is Better?
Expand without a Company Set Up with a PEO & EOR in Lebanon
Become an international business and gain a presence in Lebanon without the risk or expense of setting up a company.Many legal requirements for employment are unique to this country, and navigating the process can be daunting if you’re unfamiliar with them. Hiring local workers can also be challenging if you want to expand your business into Lebanon. That’s where global PEOs (Professional Employment Organizations) come into play. With PEO partners, you reduce administrative time, legal issues, and financial concerns of setting up a legal entity in Lebanon; or the hassle of achieving tax residency status and banking in a foreign country.
Global PEO & EOR Partner in Lebanon – the Right Choice for Going GlobalAt Acumen International, we are committed to helping businesses expand their operations worldwide. With our expertise in global PEO and EOR services, we can help you conquer new markets and achieve your business goals. Our EOR service is ideal for companies looking to expand into Lebanon or other European countries. With our help, you can gain access to a skilled workforce, local knowledge, and competitive pricing.
In this guide you’ll learn how to:
- Attract and compliantly pay commission-based sales reps
- Develop international sales and extra revenue opportunities, without setting up own companies overseas
- Enter more markets, test the markets before getting established there, and easily withdraw from the unattractive countries
- Avoid legal and compliance risks
- Design an efficient system of international sales with a strong team of global salesforces
The key to expanding seamlessly into Lebanon is finding and effectively managing local people. Just a single pair of boots on the ground is a game-changer. Immediate revenue increases with a skilled globally distributed salesforce, or expedited growth with foreign local IT pros; all benefits of a strong international team and presence in the global marketplace.
However, if your company is trying to go global, or is already in those early stages, chances are that you’re starting to understand how complicated global operations can be.
Learn How You Can Expand Your Business Globally Through Employment Fast, Easily, And Risk-Free!
Risks and Drawbacks of Setting Up a Foreign Entity in Lebanon
Companies expanding their operations into new markets face the challenge of managing and scaling an employee base across multiple countries that may speak different languages. To successfully expand abroad, companies have several options for enabling hiring in international markets. The most commonly used ways are by doing the following:
- Establishing an overseas entity
- Selecting independent contractors to handle tasks remotely.
- Work with a global EOR (Employer of Record) partner.
The global traditional expansion approach is setting up a legal entity in another country. The upfront costs are enormous and take months to set up. Setting up a foreign entity can be complex, with too many variables to capture here. Labor law, compliance regulations, company structures with dozens of employees, and economic landscapes can differ significantly when people operate across borders. However, if your aim is to operate in a single country for more than 5 years and employ dozens of staff, this option might be the best choice for you. Hiring international employees requires you to be familiar with all local employment laws, tax calculations, and resident authorizations to run a successful business.
In turn, this leads to more than just high expenses, but also creates additional work for your accounting, legal, and HR departments. Until recently, the most common approach for global SaaS companies was to set up a foreign entity in every country they wanted to operate. This is still a viable option for companies looking to operate in that country for at least 5 years, who plan to employ dozens of people there, or who plan to acquire physical assets there. However, recent global trends have led many countries to halt the approval of new foreign entities, effectively shutting out new entrants.
Permanent Establishment Risk: Addressing the Concerns
You may think you can get away with conducting business overseas without registering a legal entity, but you would be wrong. You might need to register your business even if you're only sending an employee on a temporary assignment or establishing a small promotional office. Failing to do so can result in severe consequences.
Different countries have different laws regarding taxes, and a multinational company must take all of these into account when conducting business. The tax authorities of a particular country can determine which elements of the company's economic activity take place in a particular country and how much profit is attributable to them. This can be a complex process, but ensuring that the company complies with all applicable laws is essential.
Flying Under the Radar of Local Tax Authorities in Lebanon
An organization's physical presence in a country over a sustained period can trigger a taxable presence, or a "permanent establishment" (PE), in that country. This may occur if the organization generates revenue directly from activities in that country or if the organization's activities contribute to the revenue of a group entity in that country.
As an organization operating overseas, it is essential to be cautious of triggering a Permanent Establishment (PE) under local laws, as this can expose your company to unexpected tax liabilities, fines, and reputational damage. Failure to properly register a PE can have severe consequences for your business, so it is vital to understand the requirements of each country in which you operate.
Although the Organisation of Economic Co-operation and Development's (OECD) base erosion and profit shifting (BEPS) project has had many far-reaching outcomes, one of the most significant is the modification of the definition of a permanent establishment. This change has important implications for businesses operating in multiple jurisdictions, as it may affect their tax liability.
The OECD is using Action 7 of BEPS to tackle common tax-avoidance strategies used by multinational corporations to avoid paying taxes in the countries where they do business. The organization is trying to stop companies from sidestepping local tax authorities by establishing related distributors rather than agencies or commissionaires.
Triggering Permanent Establishment Risk
A business is taxed based on the geographic location of its income-earning activities. The penalties for noncompliance are steep.
As businesses look to expand into new markets, they must be aware of their tax liability in each country where they have a customer base. They must also be aware of the compliance obligations in each country where they sell their products.
Suppose you are selling digitally and don't already have this in-house expertise or don't work with a global PEO & EOR partner. In that case, you need to start thinking about how to address this challenge immediately.
As it turns out, the trigger of a taxable presence in another country is not just an abstract challenge but a real non-compliance risk. Business in another country can come with hidden risks - like inadvertently triggering a taxable presence.
Acumen International has experience dealing with this problem – we were approached by a client who had unwittingly violated PE laws abroad. Two of the company's employees were placed in one of the EU countries, working from home. However, since they weren't generating much revenue directly in that country, the company decided to do their payroll registration instead of registering a full corporate legal entity.
One year after, the local state tax authorities came knocking to say that an employee's job title containing the word "sales" meant the company should have registered in-country as a business, resulting in higher employer payroll taxes. In the end, the company owed over €20,000 in back taxes and fines.
Non-compliance with local PE requirements can produce dire consequences for businesses. The company took steps to try and mitigate the damages, but the message is still pretty clear: adhere to the requirements or face some serious repercussions.
Make a Rapid Market Entry with a Global PEO. No Entity Required in Lebanon
The popularity of flexible and agile global employment models such as PEO (Professional Employer Organisation) and EOR (Employer of Record) has also led many companies to look for more innovative ways to set up in other countries. Companies that want to establish a legal footprint in a new country are turning to more agile and faster approaches. Changing customer behavior and economic downturns have also made using global PEO (Professional Employer Organisation) and EOR (Employer of Record) solutions more efficient and expanding into local markets as needed. With this lightweight approach, you can launch your product directly into the Lebanese market while avoiding tax and compliance risks and creating sustainable margins with reduced go-to-market costs.
Fully Compliant Employment Contracts in Lebanon
Acumen International has become one of the most effective PEO and EOR solutions providers in the Middle East. If you plan business operations in Lebanon, you will inevitably need help creating employment contracts for your business in Lebanon, or you want to learn about Lebanese tax schemes, Acumen can provide comprehensive legal advice. Our service includes optional consulting, such as legal assistance with employment contract creation, according to Lebanese labor law, mandatory employee benefits, vacations, social security contributions, tax deductions and withholdings, and more. By partnering with Acumen, you reduce your dependence on local infrastructure and experts in these areas. Additionally, we offer assistance with other services that can reduce your expansion costs by 90% and hiring time by 80%.
Risk-free Business Expansion to Lebanon
The Lebanese market provides various opportunities for businesses looking to expand their reach. However, there are also many challenges for companies considering Lebanon for expansion. Lebanon’s tax and employment law laws can be complex, so businesses must pay close attention to the intricacies of these laws. Extra care must be taken when looking to expand into Lebanon because mistakes such as payroll missteps can result in heavy fines and penalties. If your company is serious about entering the Lebanese market, we suggest outsourcing your global employment functions to our Global PEO services.
Acumen International can provide all the expertise you need to know all the ins and outs of operating in Lebanon. With our support, you can focus on growing your business while we handle your HR functions. We have experience dealing with challenging employment problems, so contact us today if you prefer not to worry about legal issues concerning employment. You will have peace of mind knowing we have employees that work well together. You don’t have to worry about legal hassles or other complicated HR or immigration concerns that might slow your growth in Lebanon.
Global PEO Services – 100% Global Employment Compliance
When you need to hire in Lebanon, the challenges are many. You need to understand local laws and regulations, navigate a new country’s tax code and navigate foreign language barriers. You also must maintain compliance with the Lebanese immigration rules and regulations while ensuring that your business complies with local labor laws in Lebanon.
Complying with so many nuances makes hiring top talent in Lebanon challenging. Acumen International is a Global Employer of Record for the manufacturing, administrative, and IT specialists who can help customer organizations operate successfully around the world. We offer compliant global employment solutions tailored to startups, SMBs, and Fortune 500 companies operating in 190 countries.
Legal Guidance by Acumen Global PEO Experts in Lebanon
As a business owner operating across national boundaries, you must know the employment-related aspects of business in a foreign country. There are multiple layers of regulation governing employee activities, which can be costly and time-consuming to navigate, particularly for small businesses. Ensuring the correct application of these laws will help reduce your company’s risks and costs – and ensure that you comply with the labor regulations. Acumen provides business advisory services to companies planning to expand into the Lebanese market and assists global organizations in setting up, maintaining, and transitioning their operations in Lebanon.
Comprehensive EOR & PEO Packages and Budget-friendly Rates
Acumen International can offer secure, efficient global HR services to manage Global Payroll, HR & Benefits Administrations for businesses that need international talent but don’t have the resources or skills to handle it themselves. Acumen International’s unique and integrated approach to global employment allows us to offer a comprehensive array of PEO and EOR functions in Lebanon, including:
- Processing Immigration requirements
- Visa applications & extensions
- Work permit sponsorships
- Streamline onboarding, benefits, payroll, PTO
- Local labour law compliance
- Audit-proof compliance requirements
- Employee benefit management
- Handling employment contracts, terminations, and compensation
- Processing medical insurances and benefits
- Payroll, including year-end tax statements
- Relocation services & housing
- Benefit management
- Special needs or requirements
- Multi-country employment without limitations
- Handling contract worker and ex-pat workforce management
- Compliant employment or termination within 72 hours.