The Republic of Lebanon is a Parliamentary democracy whose independence was declared in 1943.
The economy of Lebanon is a developing economy, with a private sector that contributes to 75% of aggregate demand and a large banking sector that supports this demand, and a small public sector that contribute to 25 % of aggregated demand.
Lebanon ranks as the 54th richest GDP per capita in the world, and it is forecasted that Lebanon's GDP per capita will reach 20,000 by 2015.( (GDP is value of all final goods and services produced within a nation in a given year) Lebanon has a competitive and free market regime and a strong laissez-faire commercial tradition. The Lebanese economy is service-oriented, and there are no restrictions on foreign exchange or capital movement.
The service sector contributes with 75 % of the country's GDP, and is thus in economic terms the biggest sector primarily based on tourism, financial and banking activities. The share of the industrial sector - food processing, wine, jewellery, cement, textiles, mineral and chemical products, wood and furniture products, oil refining, metal fabricating - which is almost entirely owned by the private sector is 20 % and agriculture contributes with 4.6 % (2013).
The procedures for starting a business require an average of five steps and nine days. The tax system is considered to be attractive to multinational companies. In accordance to the 2016 Doing Business Report, Lebanon was classified as one of the top countries in the ease of paying taxes in the MENA region.
The EU-Lebanon Association Agreement was signed in June 2002 and entered into force in April 2006. Negotiations for Lebanon’s accession to the WTO are on-going.
Lebanon has also bilateral trade agreements with several Arab states, and is a member of Greater Arab Free Trade Area (GAFTA) In March 2001 GAFTA decided to speed up the liberalisation process, and on 1 January 2005 the elimination of most tariffs among the GAFTA members was enforced. The 17 states that are members of GAFTA are: Algeria, Bahrain, Egypt, Iraq, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates and Yemen. Others are in the process of joining.