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1 Produced by the UKTI Team at the British Embassy, B eirut Contact: Paul Khawaja Email: [email protected] Last Updated: July 2011 The purpose of the Doing Business guides, prepared by UK Trade & Investment (UKTI) is to provide information to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s c ontents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) w hich may arise out of or in connection with the Report. Do  ing Business in  Lebanon

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Produced by the UKTI Team at the British Embassy, BeirutContact: Paul KhawajaEmail: [email protected] Last Updated: July 2011

The purpose of the Doing Business guides, prepared by UK Trade & Investment (UKTI) is to provide information to help

recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country.

The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or

warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office

(FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its

suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase

or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any

loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.

Do  ing Business in

 Lebanon

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Are you a mem ber of a UK company w ishing t o export overseas? In terested in ent ering orexpanding your acti vity in t he Lebanese market ? Then thi s guide is for you!

The main objective of this Doing Busin ess Guide is to provide you with basic knowledge about

Lebanon; an overview of its economy, business culture, potential opportunities and an introduction toother relevant issues. Novice exporters, in particular will find it a useful starting point.

Further assistance is available from the UKTI team in Lebanon. Full contact details are available at theend of this guide.

I m p o r t a n t I n f o r m a t i on -Sanc t ions and Em bargoes

Some countries maybe subject to export restrictions due to sanctions and embargoes placed on them by the UN or EU.

Exporting companies are responsible for checking that their goods can be exported and that they are using the correct

licences.

Further information is available on Department for Business, Innovation & Skills (BIS)

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Content

1.  Introduction ............................................................................................................................................... 4 3.  How to do business in Lebanon .............................................................................................................. 8 Labe l l ing and packag ing regu la t ions ............................................................................................... 8 

Temporary Admission .................................................................................................................................... 9 Industrial Warehousing ................................................................................................................................. 9 Free Zones....................................................................................................................................................... 9 Income Tax Clearance ................................................................................................................................. 10 

 VAT ................................................................................................................................................................. 10  Additional Taxes ........................................................................................................................................... 10 

4.  Business Etiquette, Language and Culture .......................................................................................... 11 Women business t ravel lers .............................................................................................................. 12 

5.  What are the Challenges? ...................................................................................................................... 12 6. Contacts ........................................................................................................................................................ 13 7.  Resources/Useful Links........................................................................................................................... 14 

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1. I ntroduction

Lebanon is located on the Eastern shore of the Mediterranean Sea. It is at the meeting point of three

continents and, as such, has been the crossroads of many civilizations whose traces may still be seentoday.

The strategic geographical location of Lebanon and the excellent overseas contacts of the businesscommunity through the Lebanese diaspora make it an excellent gateway to the Middle East region forexporters new to the region. Subject to FCO travel advice we recommend visiting the market, as theLebanese appreciate the personal approach to forming long-standing business relationships.

 As the region's center of trade and business, Lebanon is a host to several foreign companies. Lebanonhas a free-market economy and the government does not restrict foreign investment. The Lebaneseeconomy is based on liberal trade policies and strong private initiative. It is service-oriented; main

growth sectors include banking and tourism.

 An Investment Promotion and Protection Agreement between the UK and Lebanon has been in forcesince September 2001. The economy has so far remained largely unaffected by the current globalfinancial crisis, and GDP grew at 7.5% in 2010. UK exports to Lebanon are at a record level as they

reached £398.8 million in 2010.

Why Lebanon: 

•  Strategic geographical location – Gateway between the East and West with no censorship onadvertising.

•  Strong banking sector and existence of banking secrecy law.

•  Lebanon has liberal economic system in which the private sector plays a dominant role. There are

no exchange regulations of any sort, and money can be freely remitted overseas.

•  Lebanon enjoys free market investment policies with an attractive tax rate of 15%.

•  Lebanon offers well-educated and highly skilled workforce in a multicultural society.

•  Lebanon has signed the IPPA agreement with UK in September 2001.

•  Lebanon offers one of the best infrastructure in the region with state-of-the-art Port & Airport, awell connected road system and modern telecommunication facilities.

•  Rich history/culture and an attractive tourist destination.

•  Beirut the capital, a cosmopolitan city with vibrant nightlife that makes it a place to live in.

•  Lebanon is preparing for membership of WTO which will allow the liberalization of services.

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Opportun i t i es in Lebanon

The Lebanese government welcomes UK involvement in its reconstruction programme. A privatisationprogramme is currently planned, notably in power, water, telecommunications and aviation.

There are business opportunities in a range of sectors from construction to healthcare, consumer

goods to oil & gas and in Service sectors (Financial Services including Insurance, other consultancies,tourism and leisure, and education). 

Building and construction is one of Lebanon’s most active sectors. This is a result of a high level of investment by Lebanese expats and Gulf Arabs, mainly in the building of hotels, tourist resorts,commercial and residential buildings. In addition, the government has a reconstruction anddevelopment programme (www.cdr.gov.lb).

Lebanon’s pharmaceutical and healthcare market is worth over $600m a year, the largest market inthe Arab Levant region. It continues to expand at 6-7% a year. Around 96% of pharmaceuticalproducts are imported, with weak local manufacturing capability. The country remains a regional

leader in healthcare, with world class hospitals, a burgeoning health tourism and cosmetic surgerysector, and it spends a remarkable 11% of GDP on healthcare, the highest rate in the MENA region.

Lebanon’s financial services sector is arguably the main plank of the economy. The consolidatedassets of the banking sector now stand at US$110 billion, which is more than 3 times the size of GDP.

The sector has developed over more than a century through effective regulation from the CentralBank, a loyal and wealthy customer base, one of the strongest secrecy laws in the world, and a well-deserved reputation for crisis management developed during the civil war years.

The Hydrocarbon Law was ratified in August 2010. This will pave the way for exploration of majornatural gas reserves off the coast of Lebanon. Opportunities in the oil & gas sector will bring largebusiness to UK oil companies. British oil exploration companies have already expressed interest.Several British companies visited the market and met with officials. 

Trade betw een UK and Lebanon

Lebanon is the UK's first largest trading partner in the Levant and the UK's 8th trading partner in theMiddle East. It is the UK's 56th largest market overall. UK exports of goods to Lebanon was £398.8min 2010 at an increase by 17% in comparison to 2009.

UK imports of goods from Lebanon in 2010 was £36.7m in 2010 at an increase of 8% in comparison to2009. 

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Gett ing here and advice about your s tay

Get t ing here

By Air and Land

There are daily regular direct flights from London Heathrow to Beirut. The journey time is about 5hours.

The only land access to Lebanon is via the Syrian border, where you can get a Lebanese visa. The

border with Israel is closed; if you have an Israeli stamp in your passport, immigration authorities willnot let you enter the country.

At t he a i rpor t

Beirut International Airport is only 5 miles from the city centre and journey time is around 15 minutes.The standard taxi fare to downtown Beirut is US$20 - negotiate a fair price with the taxi driver before

commencing your journey. Gratuities are at your discretion. Many of the larger hotels will providecourtesy cars if booked in advance, which are usually more expensive.

Visas

Nationals of the EU, US, Canada and Australia can obtain their visa at the airport upon arrival.

 Alternatively visas can be obtained at any Lebanese Embassy or Consulate. I sraeli nat ionals and

travellers w ith an I sraeli stamp in t heir passport are prohibited from entering Lebanon. 

For further information contact:Lebanese Embassy 

21 Kensington Palace GardensLONDON W8 4QMTel: + 44 (0)207 229 7265

Fax: +44 (0)207 243 1699

Your s tay

Beirut has a wide range of international standard hotels, although outside the capital qualityaccommodation is fairly limited. For further information please contact the British Embassy [email protected] or consult your travel agent.

FCO Travel Advice

The FCO website has travel advice to help you prepare for your visits overseas and to stay safe andsecure while you are there.

For advice please visit the FCO Travel section 

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2. Preparing t o Export t o Lebanon

When starting business in Lebanon it is advisable to use a local agent, as they are able to help dealwith the particular regulations within the market. Direct sales onto the Lebanese market can bedifficult and for most British companies it is more effective to approach the market through local

business partners those have the ability to distribute and provide technical support here. Licensingand franchising are also increasingly popular. Also when bidding for government contracts is bestcarried out through an agent or representative.

British companies wishing to develop their business in the Lebanese market are advised to undertake

as much market research and planning as possible in the UK. UKTI’s team in Lebanon can provide arange of services to British-based companies wishing to grow their business in the Lebanese market.Their services include the provision of market information, validated lists of agents/distributors, key

market players or potential customers in the Lebanese market; establishing the interest of suchcontacts in working with you; and arranging appointments. UKTI team in Lebanon can also organiseseminars or other events for you to meet contacts or promote your company in the Lebanese market.

Sources o f in format ion

Information on business in Lebanon is also available from these commercial and government websites:

•  The I nvestm ent Development Authority of Lebanon (IDAL) provides assistance forpotential investors in Lebanon, including opportunities in the three free zones, at Tripoli

port, Beirut port and Beirut International Airport, which are not subject to customsinterference. 

•  The Lebanese Customs website offers Information on the rate of customs duty payable in

Lebanon.

•  The Lebanese Ministry of Economy and Trade: www.economy.gov.lb • The Lebanese Government portal for information and forms: www.informs.gov.lb 

 You can commission these services under which are chargeable and operated by UK Trade & Investment (UKTI) to assist British-based companies wishing to enter or expand their business inoverseas markets. Under this service, the Embassy's Trade & Investment Advisers, who have widelocal experience and knowledge, can identify business partners and provide the support and advicemost relevant to your company's specific needs in the market.

To find out more about commissioning work, please contact your local UKTI office. Seewww.ukti.gov.uk  

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3. How to do business in Lebanon

What c ompanies shou ld consider w hen do ing business

There is no control on the repatriation of capital and earnings but this is subject to local taxation. An

IPPA agreement is in place. The Lebanese Government's policies strongly encourage foreigninvestment.

Market Ent ry and Star t up Considerat ions

To enter the Lebanese market the company needs to establish contact and appoint a local

representative, distributor/agent or set up own branch office in Lebanon. Your local UKTI office willadvise you on how to commission a tailored report for your specific needs and a l ist of the bestpotential partners. During your visit to Lebanon you will be able to meet some of them and appoint

your local contact.

Finance and Bank ing

Lebanon’s banking sector continues to show resilience to the global economic downturn because of the

conservative policies applied by the Central Bank, which restricted banks from investing in structuredproducts including derivatives. The sector has enjoyed growth in assets for several years, but hasseen a sharp rise in liquidity since mid 2008. It is one of the most highly respected Central Banks in

the region.

Since 1991 legislation has encouraged mergers and closures to overcome the overbanking of thesector (there were over 80 banks at the end of 1997 now reduced to just over 50).New legislation enabled banks to list on the Beirut Stock Exchange in 1996.

Major banks in Lebanon include Banque du Liban et d'Outre Mer (BLOM), Banque de la Mediterranean,Byblos Bank, Bank of Beirut and Banque Audi. BLOM, Byblos Bank and Bank of Beirut have branches

in the City of London.

Market ing and Branding

 Advertising in Lebanon is well developed and less bureaucratic than in other Middle Eastern countries

and has very little censorship. A number of international advertising agencies are based in Beirut.International brands are highly visible and most forms of advertising media are used. Althoughtelevision continues to be the most popular medium, print media, radio, billboards and cinemaadvertising are all well established methods.

 As the number of media avenues has expanded, consequently the cost of advertising has beenreduced. Strategically, advertising in Lebanon can be a useful gateway to the rest of the Gulf/Middle

East in general.

Label l ing and packag ing regu la t ions

Products (particularly food and medicines) must be clearly marked, stamped, branded or labelled, toindicate the country of origin. Use of English is acceptable, but for added safety, bilingual or even

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trilingual language (Arabic and French) labelling is advisable, particularly if the product is aimed at themass market.

In addition to providing information on country of origin, it is also recommended that labels alsoprovide information regarding:

•  Placement of identification data•  Identification of the manufacturer

•  Product information

•  Standard quality disclosures

•  Ingredients

•  Date of manufacture

•  Date of expiry (no goods are permitted with an expiry date of less than six months).

Custom s and Regula t ions

Lebanon's customs tariffs are based on the Harmonised Commodity Coding System. Duties may be

levied ad valorem or specific to the goods concerned.

Due to recent Customs Decrees changes, only an original invoice, manually or electronicallysigned, bearing the name of the Seller, the Buyer and Cost of items is required for customs, inaddition to the Goods Descrip ti on and Quantity. Comm ercial invoices and Certi ficates of

Origin should be presented with Goods exported to Lebanon to the Customs Authorities. One copy of the invoice should contain a declaration by the exporter clarifying the price and country of origin of thegoods, along with a statement that the goods do not originate from Israel. Note also that the vesselmust not have docked at an Israeli port. Goods not accompanied by the correct documentation aresubject to fines.

Information on the rate of customs duty payable is available on Lebanese Customs website.

Three systems of custom exemption are in operation in Lebanon: temporary admission, industrialwarehouse status and free zone entry.

Tempor ary Admission

Goods should be covered by a bank guarantee for the required amount of customs duty; once thegoods have been re-exported the guarantee is cleared.

I ndustrial Warehousing

If imported raw materials are used within one year, a firm may establish a free zone on site and the

goods may be re-exported or sold locally for favourable duties on raw materials or the finishedproduct.

Free Zones

Duties of 6% are charged on raw and semi-raw materials designated for the manufacture of industrialproducts and on imports of machinery and spare parts used to build new factories.

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Both tourism investment and industrial investment in free zones qualify for a reduced 2% duty onmachinery, spare parts and 50% of raw material imports.

Local manufacturers are protected by tariffs. Between 20%-50% (and sometimes higher) tariffs areapplied on imports competing with national industries (including furniture, concentrated and cannedfood and fruit juices) and on goods for the Lebanese Army and security forces which are deemed to be

locally available.

Taxes

I ncome Tax Clearance

 All individuals and entities with a registered business in Lebanon are liable to income tax.

Foreign companies involved in business in Lebanon are subject to tax on income earned in thecountry. The corporate income tax rate is generally 10% and firms are also liable for a 5%withholding tax.

Firms valued at over LL500 million (approximately US$330,000) and which do not undermine localindustry are entitled to a 10 year tax holiday, if they are established in a free zone.

Non residents and persons with unregistered businesses are deemed to earn a net profit of a fixedpercentage of their turnover. This fixed percentage consists of 10% of goods and equipment sold anddelivered to Lebanon and 50% of income from services and royalties. Deemed profit is set at 10% of this fixed percentage.

The tax year is the calendar year. The tax deadline is March 31 of the year following the calendar yearin which the income was earned. Fines are payable for delayed tax returns.

VAT

 VAT at 10% is applied across all industries and services. However the Lebanese Government has plans

to increase it to 12% and then to 15% over the next few years.

Additional Taxes

Other taxes: a 10% income tax on any person earning income in Lebanon regardless of residency, a

5% tax on investment income and a 6% capital gains tax. Stamp duty on documents is 0.3% whileproperty income tax is between 4%-10%. A range of duties are applied for municipal facilities.

Recru i t ing and Reta in ing Sta f f ing

The unemployment rate varies according to sources but the national average in September2009 was 9.20%. With an improvement of 54% comparing to 2008, Lebanon has been described as acountry that has weathered the global recession rather well. Minimum monthly salary is L£ 500,000(GBP £230).

The Labour Code defines working hours, safety, minimum wages, non-discrimination, collective

bargaining and general relations between employees and employers. It provides the hours of work per week, overtime and Holidays entitlements per year.

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In te l lec tua l Property Rights

Lebanon, like the UK, is party to the main international copyright convention - the Berne Convention - which sets

minimum standards of protection for literary and artistic works. Works of UK nationals or residents, or works

first published in the UK should be entitled to the same protection, under the terms of that convention, in

Lebanon as Lebanon grants to its own nationals.

Lebanese copyright law provides for protection of artistic, dramatic, musical, photographic andcinematographic works.

Copyright infringements are common. Pirate videos, cassettes and compact disc are very widely

available as is proprietary computer software.

Those wishing to claim a right to commercial or industrial property should apply to the Office of Protection and Commercial and Industrial Property at the Ministry of Economy and Trade.

On approval the claimant should publish trade marks and patents in the Official Gazette. Both trademarks and patents are registered for 15 years and trade marks are subject to unlimited renewal.

During the period of protection, small annual fees are paid to the government.

4. Business Et iquett e, Language and Cult ure

Beirut is a very cosmopolitan city, but although dress codes are extremely liberal by regionalstandards, it is best to err on the side of conservative. Business attire is suit and tie. Outside the

capital and main cities people are more traditional. Lebanese women generally dress moreflamboyantly than most Europeans. For leisurewear and at weekends, almost anything goes, at least inBeirut and the major cities.

In winter, warm medium-weight clothing is required and in summer lightweight clothing isrecommended.

The majority of Lebanese businesspeople are young, well educated, and fluent in English and French,with a very flexible business style.

Meet ings and Presenta t ions

In general, there is little difference between business meetings in Lebanon and elsewhere in the UK.

Business meetings are best arranged in advance, although the Lebanese will meet for unarrangedmeetings if time allows. France's colonial rule has had its impact and two hour lunches are standard,making it difficult to contact people around midday.

Meetings tend to be very informal and will begin with a series of pleasantries about both your and theirfamilies, your trip and the weather. As a consequence, meetings generally take longer than they do inBritain. Be prepared for interruptions.

Dressing well for a meeting is expected as it shows your counterparts that you value the opportunityto meet them.

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Women business t rave l le rs

Lebanese women are amongst the most liberated (by western standards) in the Middle East. Visitingbusinesswomen should have few problems in the business environment. Occasional comments fromthe street corner should be expected, and ignored, while in towns and cities.

Modes o f address & Language  

Normal western forms of address are accepted and used. Handshakes are a customary greeting.

 Although most people speak French or English, the Arabic tradition of civility remains important. A smattering of Arabic can be useful in constructing relationships.

Below are some commonly-used phrases:

Hello: marhabaWelcome: ahlan wa sahlan

Welcome (in response): ahlan fik Thank you: shukranExcuse me: afwanSorry: assif 

The British Embassy can advise on translators/interpreter if needed.

5. What are t he Challenges?

 Although the business climate in Lebanon continues to improve, obstacles remain. Difficulties whichforeign companies encounter include bureaucracy, lack of clarity and transparency in tax

administration, the tax burden, and corruption. Lebanon also suffers of poor infrastructure – Trafficcan be heavy in Beirut, particularly in rush hours.

Get t ing Paid

Open account is increasingly popular in established business relationships. Normal care should betaken in extending credit terms unless the reliability of the organization can be established. Theprincipal methods of payment are irrevocable Letters of Credit and cash in advance.

If payment terms are not met, the UKTI team in Beirut can supply a list of lawyers who can beconsulted on the procedures for debt collection. Please not e, the Embassy cannot int ervene

directly i n comm ercial disputes on behalf of UK companies.

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6. Cont act s

If you have a specific export enquiry about the market which is not answered by the information onthis report, you may contact:

UK Trade & I nvestment Enquiry Service

Tel: +44 (0)20 7215 8000Fax: +44 (0)141 228 3693Email: mailto:[email protected]  

 You will be signposted to the appropriate section on our website, or transferred at local call ratedirectly to the British Embassy/High Commission.

UK Trade & I nvestment

Lebanon Desk

Kingsgate House

66-74 Victori a Str eetLondon SW1E 6SW

Carl Jayasekera, Senior Country ManagerInternational Group Middle East TeamTel: +44 (0)20 7215 8411Fax: +44 (0)20 7215 4074Email: [email protected]  

UKTI Team Beir ut

Brit ish Embassy

Embassies Complex

Army Str ., Serail Hil lZkak Al-Blat

PO Box 11-47 1 Beirut

Lebanon

Tel: 00961 1 960800Email: [email protected]  

Sect or Respons ibi l i t ies in Be i ru t a re as fo l low s:

Paul Khawaj a: [email protected]  00961 1 960831

Financial and Legal Services; Advanced Engineering; Security; Water; Construction; Energy(including oil & gas and renewables)

Yasmine El Hajj : [email protected] 00961 1 960824

Creative Industries; Food & Drink; Retail and Consumer Goods, Agriculture; ICT, Leisure andTourism.

Wissam Sharar a: [email protected]   00961 1 960830

Education & Skills; Life Sciences; Environment;

Othe r usefu l organisat ions

British Embassy Beirut : www.ukinlebanon.fco.gov.uk  Information on the working of and services provided by the British Embassy Lebanon.

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Arab-Bri ti sh Cham ber of Commerce (ABCC)  

43 Upper Grosvenor StreetLondon W1K 2NJTel: + 44 20 7235 4363

Fax: + 44 20 7245 6688

www.abcc.org.uk  

Beirut Chamber of Comm erce and I ndustry

PO Box 11801BEIRUTTel: +961 1 353390

Fax: +961 1 865802URL: www.ccib.org.lb 

Association of Lebanese I ndustri alists

PO Box 1520

Chamber of Commerce and Industry BuildingJustinian StreetBEIRUTTel: +961 1 350280Fax: +961 1 351167

E-mail: [email protected] URL: www.ali.org.lb 

UK Trade & Investment can help you make the most of these opportunities and help you plan your

approach to the market. You may find out more about the range of services available to UK companies trading internationally through your local International Trade Team.

We hope that you have foun d thi s guide useful. For fur th er inform ation , please contact

your I nt ernational Trade Adviser or one of th e UKTI team in Beirut .

7. Resources/ Useful Links

Bu siness Link: I nt ernati onal Trade

Business Link’s International Trade pages provide an overview of export basics including licensing,customs procedures, classifying and movement of goods, other regulatory information and export

paperwork issues. It also introduces exporters to the UK Trade Tariff.

Essential reading f or expor ters!

Find out more at:http://www.businesslink.gov.uk/bdotg/action/layer?r.s=tl&r.lc=en&topicId=1079717544 

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Country I nformation:

BBC Website:

http://news.bbc.co.uk/1/hi/country_profiles/default.stm 

FCO Country Profile:http://www.fco.gov.uk/en/travel-and-living-abroad/travel-advice-by-country/country-profile/ 

Cult ure and comm unications:

CILT – National Centre for Languages - Regional Language Network in your area:

http://www.cilt.org.uk/workplace/employer_support/in_your_area.aspx 

Kwintessential culture guides:http://www.kwintessential.co.uk/ 

Customs & Regulati ons:

HM Revenue & Customs: www.hmrc.gov.uk  Import Controls and documentation (SITPRO): http://www.sitpro.org.uk  

Economic I nformation:

Economist:http://www.economist.com/countries/ 

Export Contr ol

Export Control Organisation:http://www.berr.gov.uk/whatwedo/europeandtrade/strategic-export-control/index.html/strategic-

export-control/index.html 

Export Finance and I nsurance:

ECGD: http://www.ecgd.gov.uk/ 

I ntellectual Property

Intellectual Property Office:www.ipo.gov.uk  

Market Access

Market Access Database for Tariffs (for non-EU markets only):

http://mkaccdb.eu.int/mkaccdb2/indexPubli.htm 

SOLVIT – Overcoming Trade Barriers (EU Markets only)

www.bis.gov.uk/EUMarketAccessUnit 

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Standard and Technical Regulations:

British Standards Institution (BSI):http://www.bsigroup.com/en/sectorsandservices/Disciplines/ImportExport/ 

National Physical Laboratory: http://www.npl.co.uk/ Intellectual Property - http://www.ipo.gov.uk/ 

Trade Statistics:

Travel Advice:

FCO Travel: http://www.fco.gov.uk/en/travel-and-living-abroad/ NHS: http://www.nhs.uk/nhsengland/Healthcareabroad/ Travel health: http://www.travelhealth.co.uk/