Trying to operate a business in Lebanon is a full-time job on its own… with lots of overtime. Navigating the chaos and headaches takes time away from growing your business.
If you’re in the market for an office rental in Lebanon, you need to be aware of many things even before you sign a lease – and especially before you do.
We put together this guide to help you navigate, know what to look for, and know what to ask for if you’re renting or even buying a commercial space in Lebanon.
We also offer fully-serviced office spaces through 961Offices. So if you need help, we can do so. Just email us at [email protected]
#1 Location, Location, Location
This is super crucial. You need to be very strategic with location when renting an office in Beirut and across Lebanon.
Is this specific area a hotbed or near a hotbed for armed conflict or civil unrest? You don’t want to risk the safety of your staff and have your business operations affected based on the situation.
When the recent Tayyouneh Clashes took place in Beirut, we received an unmanageable number of requests from people needing a space to work at our Jal el Dib coworking space just outside of the city.
Our space was unaffected and the businesses continued operating as usual.
Business owners didn’t want to risk their safety and that of their employees during the clashes so they avoided driving into Beirut and were forced to stop their business for the day.
In other parts of Lebanon, business continued as usual as if there was no conflict taking place.
#2 Who are you doing business with?
Lebanon is known for rampant corruption and mafia-running businesses. This is especially true in real estate.
Make sure to check who operates the building and space as well as who the owners are. The last thing you want is to be indirectly caught up in a scandal because the owner was caught doing something sketchy or illegal.
#3 Currency and Rates
This is an entire mess in Lebanon and some landlords are taking advantage of the confusion to steal or rip off tenants.
You have the “official” rate of $1=1,500LL. Government fees are at this rate. So any bills to the government/official entities, like municipalities, are at this rate.
Then you have the “bank rate” known as “cheque bancaire,” which is at $1=3,900LL and recently changed to $1=8,000LL.
Then you have the market rate, which is the exchange rate at the black market (and the most realistic price). This currently sits at $1=27,500. When something is priced in dollars (also known as “fresh dollars”) then you can usually pay it in LBP at the black market rate. So if something is $10, currently, you can pay 275,000LL.
Worth noting that people will often divert slightly from these rates 4,100LL instead of 3,900LL, 27,300LL instead of 27,500LL. They will argue that the price to exchange these on the market differs slightly.
Most real estate in Lebanon, commercial and residential, are now priced in “fresh dollars.” Many landlords will make lease agreements in “cheque bancaire” but expect you to pay in fresh dollar equivalent agreed upon at the time of signing.
This protects them from hyperinflation.
Make sure to specify the currency in the lease agreement. If it says $120,000 per year, for example, make sure it specifies if it’s $120,000 fresh or $120,000 “cheque bancaire.”
#4 Security
A major concern in Lebanon right now. Robberies and crimes are up over 260% this year compared to the previous year. Most are armed robberies.
It’s important to stay diligent and ensure the building has proper security, and if not, at least your office, especially if you work in different time zones that make you stay at the office at later hours.
At 961Offices, we have 24/7 cameras as well as friendly, licensed armed security around the clock. We also offer to escort members to their cars at night if they’re parked nearby.
#5 Electricity
This is the most important concern.
You need to ensure the building can guarantee you electricity based on your needs. This should be your first question. Ask how many hours they can provide and what’s the scheduling. We recommend going with buildings offering 24/7 electricity as they are more prepared if another fuel crisis occurs.
In the middle of the fuel crisis, 961Offices location was able to maintain 24/7 electricity regardless. For all our new spaces, this is an absolute requirement. New buildings that have incorporated solar energy are able to offer below-market rates on consumption.
Generator electricity rates are dictated by the Ministry of Energy and Water. This is being updated almost monthly now, trending more expensive.
For regions above 700m sea level, it’s 7,100LL per kWh. For regions under 700m sea level, it’s around 6,500LL per kWh. So if your office is in Jal el dib, and you consume 10,000kWh then your bill should be 65,000,000LL plus any fixed charges.
Make sure this is all in LBP. If they bill you in anything other than LBP (unless agreed to), then something is off. This can happen if the management has its own generators.
Something they may try to do is convert it to “cheque bancaire” at the official rate. So 6,500/1500LL = $4.33 and then multiply this at the 4,100’s rate (remember the cheque bancaire?) and the result is a new price of 17,753LL instead of 6,500LL.
This conversion serves no purpose and is just a pure attempt at theft. This represents a markup of 273%. So for the same consumption, instead of paying 65,000,000LL (or $2,363 fresh at the market exchange), you’re paying 177,530,000LL (or $6,455). Again this is total theft and you should report it to the Ministry.
Landlords will claim that they are paying for the fuel in USD and are required to do so. But this doesn’t make sense as there is no longer a black market since subsidies have been lifted and the market rate is the normal rate. Plus very minimal fee for transport or whatnot.
Common charges of the office rental building should be covering the costs of the generators. Landlords may try to charge you separate fees for this
Before signing, ask them to share their last month’s invoice for the electricity so you can see if they’re legit.
Most don’t charge VAT on the electricity bill as they shouldn’t. Big companies managing 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 check at the Ministry of Finance that they paid this to them – otherwise they are just adding an extra 11% for themselves.
Note, this is separate from the EDL electricity bill for the government-provided electricity but it’s minimal and is still at the 1,500LL rate.
#6 Internet
Fiber is available in many areas in and around Beirut. 961Offices, for example, is equipped with fiber internet and has been recording 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 get you 10mbps speeds with unlimited consumption. Anything more than that requires approval from the ministry of telecom. In addition to fiber internet, we have a dedicated line pending with 40mbps speeds.
Ogero has still maintained its prices for now. Other providers, that are all resellers of Ogero, have announced this week that commercial rates will increase based on the 8,000LL rate, more than doubling prices. Each 10mbps is around $47.50 give or take, at the now 8,000LL rate.
#7 Payment Methods
Most landlords will now ask to be paid in fresh dollars or what they call “cash.” You’re expected to pay the full year upfront, plus VAT. At 961Offices, we let you free up your capital and make monthly payments instead of yearly.
#8 Transportation and Parking
Traffic is brutal in Lebanon and especially in Beirut. Time wasted on the road is time wasted from your business. So take this into consideration when picking a location.
Areas just outside of Beirut offer better-priced office rentals, allow you to skip the traffic, and have more access to parking spots – all while maintaining the same level of infrastructure (internet, electricity, etc). You’re also often just a short drive away from the capital when you need to pull a trip.
Most people in Lebanon take their cars to commute as public transit is near non-existent. Plan for access to nearby parking for your employees and clients.
#9 Common Charges
Office spaces will charge common charges on a quarterly basis. This is outlined in the lease agreement.
The charges vary from one building to the other but is predefined in the lease agreement (make sure to determine if it’s fresh or cheque). It’s a price per sqm, paid quarterly.
So if you have 1,000sqm and the common charge is $20 per sqm, then you’re annual common charge is $20,000, which is $5,000 every 3 months.
#10 VAT
VAT is 11% and charged at the $1=1,500LL rate. No matter what the currency of the bill is.
If your rent is $120,000 fresh (dollar) per year, your tax owed is $13,200. But don’t pay this in fresh. Ask to pay it at the official rate, which means 19,800,000LL – or $720 fresh at the market rate.
This applies to everything. Most electronic stores let you pay sales tax at the 1,500LL rate but you’re required to prove you’re a registered company.
Opening an office in Lebanon isn’t simple at all and wastes a lot of your time to just manage the day-to-day of it.
We launched a coworking and fully-serviced offices venture in Lebanon called 961Offices to tackle just this. We wanted businesses to be able to stay in Lebanon and operate without having to deal with the day-to-day headaches and hassles of running a business in Lebanon.
You pay a single membership fee to us, which includes almost all of the above and we take care of the headaches so you can focus on your business and productivity.
We’ve been helping individuals and freelancers, all the way to enterprise corporations and NGOs needing serviced spaces for hundreds of people.
We have 24/7 access, electricity, and one of the fastest internet connections in Lebanon. In addition, we have friendly and professional armed security to keep our members safe as the security situation deteriorates in Lebanon.
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