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Establishment
Procedure
/ Release of the Blocked Amounts / Sources
of Funds / Restrictions Establishment of a Foreign Financial Institution¡¯s Branch The foreign financial institution¡¯s branch is established by acquiring a license from the Central Council of the Bank of Lebanon. 1. Establishment Procedure A. License application The establishment procedures are initiated by an application addressed by the administration of the foreign financial institutions which should be a joint-stock company, to the chairman of the Central Council of the Bank of Lebanon, the governor, requesting a license to establish a financial institution¡¯s branch. B. Documents enclosed with the application The license application should enclose the following documents in fourfold, one of which is original: 1. The bylaws of the foreign finacial institution, duly certified. 2. A preliminary plan for each of the following: a. The administrative structure to be adopted by the
management of the branch. 3. A duly signed certificate showing the registration of the financial institution at the country of origin, or the duly signed license granted by the concerned authorities to carry out financial operations. 4. The duly signed resolution issued by the board of directors of the foreign financial institution which comprises: a. The approval for opening a branch in Lebanon.
5. Documents certifying the identities of the representative of the institution in Lebanon and the persons to be appointed in senior managerial positions (documents required: identity card or a valid passport). 6. Statements signed by the above mentioned persons which include a curriculum vitae (certificates, experiences, and other information about their financial and moral credibility) and a precise evaluation of their financial position. 7. A police record issued within the last three months for each of the above mentioned persons. 8. A feasibility study for the establishment of the foreign financial institution¡¯s branch over a three year period clearly showing the sources of finance and prospects for investment. This study should include in details the following: a. The projected profit and loss statement. 9. A statement that clarifies, when necessary, the direct or indirect link between the financial institution and a specific economic group or groups in Lebanon and abroad 10. Annual reports on the institution¡¯s activities for the last three years along with the balance sheets relative to these years. C. Resolution of the Central Council The Central Council of the Bank of Lebanon decides whether to approve or to reject the granting of a license for establishing the foreign financial institution¡¯s branch in Lebanon, as directed by public interest. The Council possesses a discretionary authority to approve or to reject the license. In case of approval, the governor issues the resolution in a nominal form, so that it cannot be tranferred to another foreign financial institution. D. Time limit for establishment Financial institutions licensed by the Central Council to open a branch in Lebanon must complete the procedures for their establishment and effectively begin their operations within a maximum time limit of six months from the date of notification of the decision approving the license. Failure to comply with this condition would result in the annulment of the license. E. Payment of the capital assigned for the branch¡¯s investments The capital assigned for the branch¡¯s investments should be paid in cash in Lebanese Pounds at the counters of the Bank of Lebanon. Payment is effected in a blocked account in the name of ¡°The Foreign Financial Institution¡¯s Branch Under Establishment¡±. This account does not generate any interest and does not charge any fee or commission. The Bank of Lebanon can accept the partial or full payment in the form of a transfer in a foreign currency paid to its account at an appointed correspondent abroad. The Bank of Lebanon will effect the payment by executing an exchange operation to specify the counter value in Lebanese Pounds of the amount that was transferred to its account at its correspondent. F. Registration at the Ministry of Economy and Trade A copy of each of the documents stated in section 1-B numbers 1-3-4-5-6-7-10 are submitted to the Ministry of Economy and Trade - Trade Department/ Companies Section. The Ministry of Economy and Trade issues an acknowledgement receipt of the registration of the branch of the foreign financial institution and of the power of attorney of the person or persons managing the branch. G. Registration at the Commercial Registry A copy of the documents submitted to the Ministry of Economy and Trade-Trade Department/Companies Section, a copy of the resolution of the Central Council of the Bank of Lebanon approving the establishment of the branch, and the payment receipt proving the full payment of the capital assigned to the branch¡¯s investment are submitted to the office of the Commercial Registry. The office will issue a testimony confirming the registration of the branch and the prerogatives of its representative. H. Registration on the List of Financial Institutions The branchwill be registered on the List of Financial Institutions pursuant to a petition submitted to the Bank of Lebanon by the person managing the branch or his representative. The petition should enclose the following documents: - A copy of the attestation issued as a result of registering the branch at the office of Commercial Registry in Beirut, and a copy of the documents that were registered at the office, stamped and signed to prove their registration. - A copy of the acknowledgment receipt issued as a result of registering the branch at the Ministry of Economy and Trade-Trade Department/ Companies Section, and a copy of the documents that were registered at the Trade Department, stamped and signed to prove their registration. The financial institution must post the decision of its registration on the List of Financial Institutions issued by the Bank of Lebanon in a place exposed to the public. |
