Trying to run a business in Lebanon is a full-time job in itselfâ¦ with a lot of overtime. Navigating through chaos and headaches takes time to grow your business.
If you are looking for an office rental in Lebanon, there are a lot of things you need to be aware of before you even sign a lease – and especially before you do.
We’ve put together this guide to help you navigate, know what to look for, and know what to ask if you’re renting or even buying commercial space in Lebanon.
We also offer fully equipped office spaces through 961Offices. So if you need any help we can do it. Just email us at [emailÂ protected]
# 1 Location, location, location
It’s super crucial. You have to be very strategic with the location when renting an office in Beirut and across Lebanon.
Is this specific area a hotbed or near a hotbed of armed conflict or civil unrest? You don’t want to risk the safety of your staff and have your business operations affected depending on the situation.
When the recent Tayyouneh clashes took place in Beirut, we received an unmanageable number of requests from people needing space to work in our Jal el Dib coworking space just outside of town.
Our space was not affected and businesses continued to operate as usual.
Business owners did not want to risk their safety and that of their employees during the clashes, so they avoided driving in Beirut and were forced to shut down their business for the day.
In other parts of Lebanon, business continued as usual as if there had been no conflict.
# 2 Who do you do business with?
Lebanon is known for its widespread corruption and mafia enterprises. This is especially true in real estate.
Be sure to check who is operating the building and space as well as who the owners are. The last thing you want is to be indirectly involved in a scandal because the owner has been caught doing something fishy or illegal.
# 3 Currency and rate
It’s a mess in Lebanon and some landlords take advantage of the confusion to steal or rip off tenants.
You have the âofficialâ rate of $ 1 = 1,500 LL. Government fees are at this rate. Thus, all bills to government / official entities, such as municipalities, are at this rate.
Then you have the “bank rate” known as the “bank check” which is $ 1 = 3,900 LL and was recently changed to $ 1 = 8,000 LL.
Then you have the market rate, which is the black market exchange rate (and the most realistic price). This currently sits at $ 1 = 27,500. When something is valued in dollars (also called “fresh dollars”), you can usually pay it in pounds sterling at the black market rate. So if something costs $ 10, you can currently pay 275,000 LL.
Note that people will often deviate slightly from these rates 4,100 LL instead of 3,900 LL, 27,300 LL instead of 27,500 LL. They will say that the price to trade them in the market differs slightly.
Most real estate in Lebanon, commercial and residential, is now valued in âfresh dollarsâ. Many landlords enter into rental agreements by cashier’s check, but expect you to pay the dollar equivalent fee agreed upon at the time of signing.
This protects them from hyperinflation.
Make sure to specify the currency in the rental agreement. If it says $ 120,000 per year, for example, make sure it says whether it’s a $ 120,000 fee or $ 120,000 “cashier’s check.”
# 4 Security
A major concern in Lebanon at the moment. Thefts and crimes have increased by more than 260% this year compared to the previous year. Most are armed robberies.
It’s important to stay diligent and make sure the building is secure, and if not, at least your office, especially if you work in different time zones that require you to stay in the office later.
At 961Offices, we have 24/7 cameras as well as friendly, licensed 24/7 armed security. We also offer to accompany members to their car at night if they are parked nearby.
# 5 Electricity
This is the most important concern.
You need to make sure that the building can guarantee you electricity according to your needs. This should be your first question. Ask how many hours they can work and what the schedule is. We recommend that you opt for buildings with 24/7 electricity as they are better prepared if another fuel crisis occurs.
In the midst of the fuel crisis, the 961Offices location was able to maintain electricity 24/7 regardless. For all our new spaces, this is an absolute requirement. New buildings that have integrated solar energy are able to offer lower consumption rates than the market.
Electricity rates for generators are dictated by the Ministry of Energy and Water. This is updated almost monthly now, with a more expensive trend.
For areas above sea level at 700 m, this is LL 7,100 per kWh. For regions below sea level at 700 m, it is approximately 6500 LL per kWh. So if your office is in Jal el dib and you use 10,000 kWh, your bill should be 65,000,000 LL plus fixed charges.
Make sure everything is in LBP. If they charge you for something other than LBP (unless agreed), then something is wrong. This can happen if the management has its own generators.
Something they can try to do is convert it to a âbank draftâ at the official rate. So 6,500/1500 LL = $ 4.33 then multiply that at the rate of 4,100 LL (remember the bank check?) And the result is a new price of 17,753 LL instead of 6,500 LL.
This conversion is useless and is only a pure attempt at theft. This represents an increase of 273%. So, for the same consumption, instead of paying 65,000,000 LL (or $ 2,363 stock exchange fees), you pay 177,530,000 LL (or $ 6,455). Again, this is total theft and you must report it to the department.
The owners will claim that they are paying for fuel in USD and are required to do so. But that does not make sense because there is no more black market since the subsidies were removed and the market rate is the normal rate. Plus very minimal costs for transport or other.
The common charges of the rental office building should cover the costs of the generators. Landlords may try to charge you a separate fee for this
Before signing up, ask them to share their electric bill from last month so you can see if they’re legitimate.
Most don’t charge VAT on the electricity bill like they shouldn’t. Large companies that manage can collect VAT. But if it’s a random building with a private generator, usually no.
One way to find out is to take the invoice with the company’s VAT number and verify with the Ministry of Finance that they paid it – otherwise, they only add an extra 11% for them- same.
Note that this is separate from the EDL utility bill for government supplied electricity, but it is minimal and remains at the rate of 1,500 LL.
# 6 Internet
Fiber is available in many areas of Beirut and surrounding areas. 961Offices, for example, is equipped with fiber optic internet and has recorded speeds between 600Mbps and 1Gbps – competing with Tier 1 global cities. So ask the building if fiber is available and live.
Most have dedicated lines that give you speeds of 10 Mbps with unlimited consumption. Anything more than that requires the approval of the Ministry of Telecommunications. In addition to fiber internet, we have a dedicated standby line with speeds of 40 Mbps.
Ogero has always maintained its prices for now. Other vendors, all of whom are resellers of Ogero, announced this week that commercial tariffs would increase based on the LL 8,000 tariff, more than doubling prices. Each 10 Mbps is roughly $ 47.50 to give or take, at the current rate of 8,000 LL.
# 7 Payment methods
Most homeowners will now ask to be paid in fresh dollars or what they call âcashâ. You have to pay the whole year in advance, plus VAT. At 961Offices, we allow you to free up your capital and make monthly payments instead of yearly.
# 8 Transport and parking
Traffic is brutal in Lebanon and especially in Beirut. Time wasted on the road is time wasted for your business. So take this into consideration when choosing a location.
Areas just outside of Beirut offer cheaper office rentals, allow you to avoid traffic and have more access to parking spaces – while maintaining the same level of infrastructure (internet , electricity, etc.). You are also often a short drive from the capital when you need to get around.
Most Lebanese use their car to get around because public transport is almost non-existent. Plan access to nearby parking for your employees and customers.
# 9 Common costs
Office spaces will charge common charges on a quarterly basis. This is described in the rental agreement.
Charges vary from building to building but are predefined in the rental agreement (be sure to determine if it’s a fee or a check). It is a price per mÂ², paid quarterly.
So if you have 1000 mÂ² and the common cost is $ 20 per mÂ², then your annual common cost is $ 20,000, or $ 5,000 every 3 months.
# 10 VAT
VAT is 11% and charged at the rate of $ 1 = 1,500 LL. Regardless of the currency of the invoice.
If your rent is a $ 120,000 fee (dollar) per year, your tax owing is $ 13,200. But don’t pay this in fees. Ask to pay it at the official rate, which means 19,800,000 LL – or $ 720 fee at the market rate.
This applies to everything. Most electronics stores allow you to pay sales tax at the rate of LL 1,500, but you must prove that you are a registered business.
Opening an office in Lebanon is not easy at all and costs you a lot of time just managing the day-to-day life.
We started a fully equipped coworking and office business in Lebanon called 961Offices to address this issue. We wanted businesses to be able to stay in Lebanon and operate without having to deal with the headaches and daily hassles of running a business in Lebanon.
You pay us a one-time fee, which includes almost all of the above, and we take care of the headaches so you can focus on your business and productivity.
We help individuals and the self-employed, to businesses and NGOs in need of spaces designed for hundreds of people.
We have 24/7 access, electricity and one of the fastest internet connections in Lebanon. In addition, we have a friendly and professional armed security to ensure the safety of our members as the security situation deteriorates in Lebanon.
Email us and let’s see how we can help you! [emailÂ protected]