Licensing agreements are among the most closely scrutinised instruments in Lebanese commercial practice, and 2026 brings a specific set of registration, tax and enforcement considerations that licensors and licensees cannot afford to overlook. Against a backdrop of continued currency volatility, the way a licence is drafted, stamped and enforced carries real financial consequences. This guide sets out, step by step, how to prepare a valid licence under Lebanese law, how to protect payment and royalty streams, what documents and fees to expect, and how to choose between the Lebanese courts and arbitration if a dispute arises. 

It is written for in-house counsel, general counsel, licensors, licensees and commercial managers who need practical, actionable direction rather than a marketing overview.

1. Overview of Licensing Agreements in Lebanon

A licence is a contractual grant permitting one party (the licensee) to use rights owned by another (the licensor), typically intellectual property such as trademarks, patents, copyright, software, designs or know-how, without transferring ownership. Under Lebanese law, licensing is governed by the general law of obligations and contracts (the Code of Obligations and Contracts) supplemented by the specific intellectual property statutes administered by the Intellectual Property Protection Office (IPPO) of the Ministry of Economy and Trade: the 1924 Regulations on commercial, industrial, literary and artistic property (Resolution No. 2385 of 17 January 1924, as amended) for trademarks and designs; Law No. 240 of 7 August 2000 on patents; and Law No. 75 of 3 April 1999 on the protection of literary and artistic property for copyright, including software. Lebanon is a party to the Paris and Berne Conventions, but it is not a member of the WTO (and is therefore not bound by TRIPS) nor of the Madrid Protocol, two points that foreign licensors frequently assume otherwise. Because a licence preserves the licensor’s title while monetising the underlying asset, it is frequently preferable to an outright assignment or sale where the owner wishes to retain long-term control, quality standards and residual value. 

In the 2026 commercial environment, one factor dominates the drafting agenda: persistent currency volatility makes the choice of payment currency, indexation and payment mechanics a central risk-allocation question rather than a boilerplate afterthought. A well-drafted licence addresses this by fixing the economics in a stable currency and ensuring the instrument is formally compliant, properly stamped and, where applicable, recorded, so that it is enforceable when tested.

Two short examples illustrate the stakes. A European software vendor licensing an enterprise product to a Beirut distributor will care most about royalty reporting, audit rights and currency protection. A regional franchisor licensing a trademark and operating system will instead prioritise quality control, territory, and termination triggers. The drafting emphasis shifts with the asset, but the compliance backbone is common to every licence concluded in Lebanon.

1.1 What this guide covers

This guide covers pre-contract due diligence, the essential clauses, registration and stamp duty, tax treatment of royalties (withholding tax and VAT), and enforcement options including interim relief and foreign award recognition.

1.2 Who should read this

Licensors (local and foreign), licensees, in-house legal teams, finance and tax functions, and commercial managers negotiating or renewing licence arrangements in Lebanon should read it before signing.

2. Licence, Assignment, Agency or Franchise?

The threshold question is structural: should the transaction be a licence, an assignment, or a franchise or agency arrangement? A licence suits situations where the owner wants recurring royalty income and ongoing control. An assignment transfers title outright and is appropriate for a clean sale of rights. Franchise and agency structures layer additional regulatory obligations on top of the underlying IP grant. The trap for foreign licensors is Decree-Law No. 34 of 5 August 1967 on commercial representation: a trademark licence coupled with the exclusive distribution of the licensor’s products may qualify the Lebanese party as a commercial representative, with registration at the Ministry of Economy and Trade, a presumption of exclusivity, a non-waivable right to compensation on termination without just cause, and the jurisdiction of the Lebanese courts of the representative’s place of business whatever the contract provides. Competition Law No. 281 of 17 March 2022, enforced by the National Competition Commission, now also limits the exclusivity and territorial restrictions that may be imposed and enforced against third parties. For foreign licensors, the choice of governing law and dispute forum is equally important, because enforceability in Lebanon depends on how the instrument interacts with local procedural and tax requirements. 

2.1 Types of licences

• Trademark, patent and design licences. Title and registration status must be verified at the IPPO before grant. A patent licence must be in writing on pain of nullity and takes effect only from its recordal in the patents register (Law No. 240/2000, art. 23); recordal of a trademark licence is optional but advisable, since it makes the licence opposable to third parties and supports the licensee’s standing to act against infringers.
• Software and copyright licences. 
• Know-how and technology transfer. Confidential technical information licensed with confidentiality and non-use protections, often combined with training and support obligations. No registration exists for know-how; protection is purely contractual, supplemented by the rules on unfair competition.

2.2 Key commercial considerations

Territory, exclusivity and the right to sub-license are the commercial levers that most affect value and risk. An exclusive, nationwide, sub-licensable grant commands a higher royalty but reduces the licensor’s flexibility; a non-exclusive, field-limited grant preserves optionality. Define each precisely; ambiguity here is the single most common source of later dispute, and any exclusivity should be tested against Competition Law No. 281/2022.

3. Step by Step: Drafting a Valid Licence under Lebanese Law

The following nine steps form the core drafting workflow. Each is actionable, and the indicative durations assume reasonable cooperation between the parties. Treat the timeline table as a planning tool, not a guarantee; recordal timelines in particular depend on the IPPO’s workload, whereas stamp duty is a fixed and short statutory deadline (Section 7).

1. Prepare pre-contract due diligence. Verify the licensor’s title and the registration status of each right to be licensed. Confirm the licensor’s right to grant, check for prior encumbrances or competing licences, and verify each registration certificate against the IPPO registers and the Ministry of Economy and Trade’s online trademark search. Without clear title, the entire licence is at risk.
2. Define licence scope and exclusivity. Specify the licensed rights, territory, field of use, exclusivity and sub-licensing permissions. Use closed definitions and a schedule listing each registered right by number.
3. Design the payment and royalty structure. Set the royalty basis (percentage of net sales, per-unit, or fixed fee), reporting frequency, and audit rights. Define “net sales” precisely and include a right to inspect the licensee’s books. State whether royalties are exclusive of VAT and which party bears any withholding tax (gross-up).
4. Draft currency and devaluation clauses. Fix the currency of payment (commonly USD or EUR), the conversion mechanism, payment channel, and any escrow or bank guarantee. In the Lebanese context, indexation to a hard currency is the primary protection against royalty erosion. Specify payment in “fresh” foreign currency to an account outside Lebanon or to a fresh-funds account, and exclude discharge in Lebanese pounds or by banker’s cheque drawn on deposits held before 17 November 2019.
5. Set minimum performance and termination triggers. Include minimum royalty or sales thresholds, cure periods, and clear termination events for non-payment, insolvency or breach of quality standards.
6. Insert warranties, indemnities and liability caps. Keep warranties proportionate, avoid over-broad warranties of non-infringement, and cap aggregate liability by reference to royalties paid.
7. Protect confidentiality and know-how. Add robust confidentiality, non-use and technology-transfer clauses, and for software, a source-code escrow provision triggered by defined events.
8. Complete registration and stamping formalities. Record a patent licence in the patents register (a condition of its taking effect) and, where advisable, a trademark licence; pay the 0.4% proportional stamp duty within the statutory deadline so that the instrument is admissible before the courts and administrations (Section 7).
9. Finalise the dispute resolution clause. Choose between a Lebanese court forum and arbitration, specify the seat and rules if arbitration, name Lebanese law or the chosen foreign law, and expressly preserve the right to seek interim and injunctive relief.

4. Required Clauses and Precedent Language

The clauses below are the backbone of any enforceable licence. The short samples that follow are illustrative drafting starting points, not finished provisions; each must be tailored and reviewed by Lebanese counsel before use.

• Grant of licence. Precisely describes the rights granted, the nature of the grant (exclusive or non-exclusive) and any reserved rights.
• Territory and field of use. Defines geographic and sectoral limits.
• Royalties and payment mechanics. Sets rates, basis, timing, currency, channel, and the VAT and withholding-tax allocation.
• Audit and reporting. Grants inspection rights and prescribes reporting format and frequency.
• Currency and escalation. Fixes the payment currency and indexation.
• Escrow and bank guarantee. Provides payment security.
• Termination. Lists events and cure periods.
• IP ownership. Confirms the licensor retains title and improvements.
• Confidentiality. Protects know-how during and after the term.
• Governing law and dispute resolution. Chooses forum and preserves interim relief.

4.1 Key drafting tips

Use a dedicated definitions clause so terms such as “Net Sales”, “Licensed Products” and “Territory” are unambiguous. Avoid over-broad warranties; a blanket warranty of non-infringement worldwide is rarely appropriate. Ensure the currency clause and the royalty clause are internally consistent, and expressly carve out the right to injunctive relief from any exclusive arbitration provision. Remember that under article 266 of the Code of Obligations and Contracts an agreed penalty may not be judicially increased or reduced except where the obligation has been partly performed, so calibrate liquidated damages and minimum-royalty shortfall payments with care.

4.2 Sample royalty clause

“The Licensee shall pay the Licensor a royalty equal to [X]% of Net Sales of the Licensed Products in the Territory, exclusive of value added tax, payable quarterly within 30 days of each quarter-end, accompanied by a royalty statement in the agreed form. The Licensor may, on reasonable notice, audit the Licensee’s records relating to Net Sales once per calendar year. Royalties shall be paid without deduction other than withholding tax required by Lebanese law, in respect of which the Licensee shall deliver official receipts to the Licensor within 30 days of payment.” (Sample only; adapt to the agreed tax allocation and consider a gross-up where the licensor cannot credit the withholding.)

4.3 Sample currency and escalation clause

“All amounts payable under this Agreement are denominated and payable in freely transferable United States Dollars (USD) in cash funds (“fresh dollars”) by wire transfer to the account nominated by the Licensor outside Lebanon. Payment by cheque, by transfer from a Lebanese bank account opened before 17 November 2019, or in Lebanese pounds at any rate of exchange shall not discharge the Licensee. Where any conversion is required, it shall be made at the prevailing commercial rate on the payment date, and the Licensee bears all conversion and transfer costs.” (Sample only; confirm the payment channel with the Licensee’s bank in light of Banque du Liban Basic Decision No. 13729 of 1 July 2025.)

5. Required Documents

Before signing, stamping or registering a licence, assemble the documents below. Lebanon is not a party to the Hague Apostille Convention: corporate documents and powers of attorney signed abroad must be legalised through the consular chain (notary, foreign ministry, Lebanese consulate, then the Lebanese Ministry of Foreign Affairs) and accompanied by a sworn Arabic translation for any filing with the IPPO or submission to a court, so build legalisation and translation time into the schedule.

6. Timeline and Deadlines

From the start of due diligence to a fully stamped and (where required) registered instrument, a straightforward licence typically takes six to twelve weeks. Due diligence and scoping run concurrently in the first two to three weeks; drafting and negotiation of the economic and risk clauses occupy the middle weeks; and recordal of a patent licence at the IPPO, the least predictable stage, can take several weeks. Three deadlines are fixed by law and should be diarised at signing: the proportional stamp duty is payable within five days of signature in Lebanon (a document signed abroad must be stamped within two months of being brought into Lebanon and in any event before it is relied on before any court or administration); withholding tax on royalties paid to a non-resident licensor is declared and paid within fifteen days of the end of each quarter; and a patent licence produces no effect until it is recorded. The Step/Who/Duration table in Section 3 provides a quick scan of the critical path. 

7. Costs, Fees and Tax Treatment

The cost of a licence comprises legal and notary fees, IPPO recordal fees, stamp duty and the tax treatment of royalties. The principal rates, as at the date of this guide, are the following:

• Stamp duty. The proportional duty under Legislative Decree No. 67 of 5 August 1967 (as amended) is 0.4% of the amounts stated in the contract; amounts expressed in foreign currency are converted into Lebanese pounds at the official rate for the purpose of the duty. An unstamped contract is not void, but it cannot be relied on before the courts or any administration until the duty and the penalty have been paid. Contracts for activities performed wholly outside Lebanon are exempt. Ministry of Finance Decision No. 401/2 of 7 April 2026 introduced a penalty-reduction scheme for late stamping (80% reduction for delays of up to three months, 70% for three to six months, 60% for six to nine months, and an exceptional 80% for older defaults regularised by 30 June 2026). 
• Withholding tax on royalties. Royalties paid to a non-resident licensor bear the non-resident tax at 8.5% (the 2024 Budget Law raised the rates to 8.5% on services and 3.4% on goods with effect from 1 April 2024). The tax is withheld by the Lebanese licensee, declared quarterly within fifteen days of quarter-end and, since the 2024 Budget Law, settled in the same currency as the royalty. Double-tax treaties may reduce the rate (for example 5% under the treaties with the UAE, Kuwait, Egypt and Poland, nil under the treaties with Qatar and Bahrain, and 8.5% under the French treaty, i.e. no relief); the lower of the treaty and domestic rates applies. Royalties received by a resident licensor are ordinary business income taxed at 17%, not withholding income. 
• VAT. A licence is a supply of services subject to VAT at 11% (Law No. 379/2001). Where the licensor is established abroad, the registered Lebanese licensee self-assesses the VAT under the reverse-charge mechanism; where the licensor is resident, it charges VAT on each royalty invoice. The royalty clause should therefore state that royalties are exclusive of VAT.

The interaction between stamp duty, withholding tax, VAT and the chosen payment currency can materially change the net return to a foreign licensor, which is why finance and tax input belongs in the drafting process, not after it.

8. Enforcing Licences in Lebanon: Courts versus Arbitration

Enforcement strategy should be decided at the drafting stage, not after a breach. The two principal routes, the Lebanese courts and arbitration, differ in speed, confidentiality, cost and the practicalities of enforcement. The comparison below summarises the trade-offs. Arbitration is governed by articles 762 to 821 of the Code of Civil Procedure (domestic arbitration, arts. 762–808; international arbitration, arts. 809–821), and judicial mediation by Law No. 82 of 10 October 2018 offers a third route.

8.1 Interim remedies and injunctions

Interim relief, including injunctions and attachment of assets, is central to protecting a licence, particularly where a licensee continues unauthorised use or withholds royalties. A well-drafted dispute clause expressly preserves the right to apply for interim measures from a court even where the merits are reserved to arbitration. Urgent relief is sought from the juge des référés (Code of Civil Procedure, arts. 579 et seq.), and a precautionary attachment is granted ex parte by the execution judge on an apparent debt (arts. 866 et seq.), usually against security; it lapses unless the merits claim is filed within the short statutory period that follows. Under Law No. 240/2000 (art. 41) an exclusive patent licensee may itself seek precautionary measures and sue for infringement; for trademark and copyright licences, the licensee’s standing should be secured in the contract and, for trademarks, by recordal.

8.2 Enforcing foreign arbitration awards

Foreign arbitral awards are recognised and enforced under the New York Convention, in force for Lebanon since 1998, through the exequatur procedure of the Code of Civil Procedure (arts. 814–815 and 1009–1024), the principal ground for refusal being conflict with Lebanese public order (art. 1014). Ensure the arbitration clause names a seat and rules that support enforceability. Note also that Law No. 46/2026 suspended legal, judicial and contractual deadlines from 1 March to 31 July 2026, with time resuming on 1 August 2026 and no revival of periods that had already expired; any cure, termination or limitation period running in 2026 should be recomputed accordingly. 

8.3 When to choose the Lebanese courts

Local courts may be appropriate where the dispute is purely domestic, where urgent attachment over assets located in Lebanon is needed, or where the cost of arbitration is disproportionate to the claim. The right choice is matter-specific, and the clause should be drafted with the likely dispute profile in mind.

9. Practical Risk-Mitigation: Payment Security, Currency and Devaluation

Given currency volatility, payment security is the defining risk-management challenge for licensors into Lebanon. Practical protections include denominating royalties in a hard currency such as USD or EUR, requiring payment through a defined banking channel, and securing obligations with a bank guarantee, letter of credit or escrow. Pair these with an early-termination right on non-payment and a clear conversion mechanism. A sample protective clause: “If any royalty remains unpaid for more than 30 days after the due date, the Licensor may draw on the bank guarantee and, on continued default, terminate this Agreement on 15 days’ written notice.” (Sample only; adapt to the agreed security instrument.)

Where payment is routed through Lebanese banks, distinguish between “fresh” funds and deposits held in accounts opened before 17 November 2019: Banque du Liban Basic Decision No. 13729 of 1 July 2025 bars banks from paying out of the latter except within the limits set by the central bank or with its prior written approval, so a royalty paid from such an account may never reach the licensor in usable currency. Payment in foreign currency between private parties remains lawful (Code of Money and Credit, art. 192; Code of Obligations and Contracts, art. 301), but the case law on discharge in Lebanese pounds at the official rate is precisely why licences now specify fresh-dollar payment to accounts outside Lebanon. 

10. Common Pitfalls and How to Avoid Them

• Not specifying the currency. Leaving the payment currency open exposes the licensor to devaluation; always fix it, specify fresh funds and index where appropriate.
• No audit right. Without inspection rights, royalty reporting cannot be verified and under-reporting goes undetected.
• No interim relief clause. Failing to preserve the right to injunctions or attachment weakens enforcement.
• Not registering or stamping where required. An unrecorded patent licence has no effect, and an unstamped contract cannot be relied on before the courts or administrations until the duty and penalties are paid.
• Ignoring stamp duty and tax consequences. Treating stamp duty, withholding tax and VAT as afterthoughts distorts the net economics and invites compliance risk.
• Overlooking Decree-Law No. 34/1967. A trademark licence coupled with exclusive distribution may create a protected commercial representation, with non-waivable termination compensation and the jurisdiction of the Lebanese courts regardless of the forum clause.

11. Next Steps

Drafting and enforcing a licence that the parties can rely on in Lebanon in 2026 requires a disciplined combination of due diligence, precise clauses, timely recordal and stamping, and a dispute strategy chosen before any breach occurs. The most effective approach is to align legal, finance and tax input from the outset, to fix the economics in a stable currency, and to verify every statutory and tax point against the primary official sources. Readers assessing a new or renewing licence should seek a jurisdictional review to confirm registration obligations, stamp duty and the optimal enforcement route for their specific arrangement.

This article provides general information only and is not legal advice. Licensing, tax and enforcement rules in Lebanon are subject to change and to court interpretation; always consult qualified counsel in Lebanon and verify current rates and obligations with the relevant ministries before acting.

Cyrille Naffah is Managing Partner of The Edge Law Firm, a corporate and commercial practice operating across Riyadh, Beirut and the wider MENA region, and co-founder of CyberLex MENA Group. He advises foreign licensors, franchisors and technology companies on their Lebanese and Saudi arrangements.

Sources

1. WIPO Lex, Lebanon country profile and national IP laws
2. Lebanese Ministry of Economy and Trade
3. Lebanese Ministry of Finance
4. World Intellectual Property Organization, treaties and enforcement guidance