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<h4><a name=french></a><a
href="http://www.oxfordbusinessgroup.com/weekly01.asp?id=2881"><i><font size=5><span
style='font-size:18.0pt;font-weight:normal;font-style:italic'>High Speed
Business</span></font></i></a><i><font size=5><span style='font-size:18.0pt;
font-weight:normal;font-style:italic'><o:p></o:p></span></font></i></h4>
<p class=MsoNormal><st1:place w:st="on"><st1:country-region w:st="on"><b><font
size=2 face="Times New Roman"><span style='font-size:10.0pt;font-weight:bold'>Lebanon</span></font></b></st1:country-region></st1:place><b><font
size=2><span style='font-size:10.0pt;font-weight:bold'>, Volume 154, 11.05.2007<br>
© OXFORD BUSINESS GROUP<o:p></o:p></span></font></b></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'>The Lebanese government has vowed to cut the length of time and the
expenses involved with setting up an enterprise by half before the end of the
year by putting in place a sweeping series of reforms to business registration
process. <br>
<br>
On May 8, Sami Haddad, the economy and trade minister, announced that the final
touches had been put to new regulations to streamline the bureaucratic
requirements to establish a business. The reforms are due to go before the
cabinet in June. <br>
<br>
With the Lebanese parliament not having convened since last November due to the
ongoing political stand off, ratification by the cabinet will suffice to bring
the reforms into being, meaning they could take effect before the end of the
year. If they do, the new regulations will mark a major overhaul of how
business is done in <st1:country-region w:st="on"><st1:place w:st="on">Lebanon</st1:place></st1:country-region>.
<br>
<br>
Haddad said that while attracting investment and creating job opportunities
were a government priority, the bureaucracy was obstructing the setting up of
businesses. <br>
<br>
At present, an average of 46 days in required to complete all the procedures
required to set up a business in <st1:country-region w:st="on">Lebanon</st1:country-region>,
with associated fees totalling around $4000, a situation which ranks <st1:country-region
w:st="on"><st1:place w:st="on">Lebanon</st1:place></st1:country-region> 116th
out of 175 countries on the World Bank's most recent Ease of Doing Business
Survey. <br>
<br>
Under the reforms that make up the Business Registration Simplification Project
as outlined by Haddad, registering a business should take no more than six days
while the costs should be cut by half. <br>
<br>
Instead of having to do the lengthy rounds of state offices to obtain the
necessary forms, filling them out and then doing the rounds again to have them
approved, the registration process will be reduced to a four-stage procedure. <br>
<br>
The new scheme will see all the required documentation available from any post
office branch. Having had the filled forms notarised and obtained proof of
having a legitimate bank account, entrepreneurs will be able to lodge all the
paperwork and pay the necessary fees at a LibanPost branch before being
forwarded for approval. <br>
<br>
While the six-day timeframe is not quite as short as the three-day Haddad said
he was aiming for in March when discussing the reforms, it is a major step
forward and one that could help achieve the programme's other objectives. <br>
<br>
"At the end of the day, it's not just about simplifying our bureaucracy -
the ultimate goal is to create as many jobs for Lebanese as possible," he
said. <br>
<br>
The reforms, long called for by the private sector, are also a response to a
report released by the World Bank in late March, which stated the Lebanese
government needed to put in place far-reaching improvements to remove public
sector obstacles to investment and business growth. <br>
<br>
The report, prepared by the International Finance Corporation (IFC), the bank's
private-sector arm which assisted in the Business Registration Simplification
Project, said there needed to be a complete overhaul of the business licensing
system, which was described as being "inefficient, over-regulated and
time-consuming for both the public and private sector". <br>
<br>
Another problem faced by private enterprises in <st1:country-region w:st="on">Lebanon</st1:country-region>
is the slow pace of the judicial system, which along with the high level of
bureaucracy make the business climate difficult, according to Julia Brickell,
IFC country manager for <st1:country-region w:st="on"><st1:place w:st="on">Lebanon</st1:place></st1:country-region>.
<br>
<br>
The judiciary also came under criticism from Finance Minister Jihad Azour, who
said he feared powerful professional groups such as the Bar Association would
try to push for the legislation to be overturned as it would reduce the role of
the legal profession in the registration process. <br>
<br>
"<st1:country-region w:st="on"><st1:place w:st="on">Lebanon</st1:place></st1:country-region>
lost millions of dollars and thousands of jobs because of the opposition of the
Bar Association," Azour said on May 10 in an interview with local press. "The
Bar Association is preventing the reforms from taking place. The same for the
notaries, the same for the judges." <br>
<br>
Further long-term reforms have also been planned, which would end the
requirement for a new business to have a high level of capital in order to open
and also eliminate more layers of legal procedures, such as the need for a
lawyer, notary and auditors. However, such measures would require a vote of
parliament and would have to avoid the sort of opposition cited by Azour. <br>
<br>
Though some lobby groups may oppose the new regulations and the other planned
reforms, any liberalising of the registration regime will be welcomed by small
scale investors, the ones most affected by the current slow process and high
costs. Though the proposed steep reduction in fees may cost the Treasury in the
short-term, the revenue generated from income taxes levied on new start ups
will bridge the gap many times over.<o:p></o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><o:p> </o:p></span></font></p>
<p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size:
12.0pt'><a href="http://www.oxfordbusinessgroup.com/weekly01.asp?id=2881">http://www.oxfordbusinessgroup.com/weekly01.asp?id=2881</a>
<o:p></o:p></span></font></p>
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