Lebanon Opportunities – August 2019

E-COMMERCE

PLATFORM GETS $4 MILLION

Ecomz, the e-commerce man-

agement platform, said re-

cently that it has increased its

capital by $4 million to scale-

up, expand globally, and en-

hance the platform with Arti-

ficial Intelligence (AI) and ma-

chine learning capabilities. The

new equity funding came from

Beirut-based venture capital

firm Cedar Mundi Ventures,

the Kafalat-managed iSME Pro-

gramme, and BLC Bank. “We

may launch other rounds to

raise more funds two or three

years from now because this

line of business always needs

expansion,” said Amer Tab-

bara, Co-Founder of Ecomz and

its Chief Sales Officer. He said

that they had invested nearly

$3 million to develop the plat-

form over the last ten years.

Ecomz (ecomz.com) is an end-

to-end ecommerce manage-

ment platform that operates in

55 countries. It provides e-com-

merce store builder capabilities

and built-in store management

applications to a customer base

of more than 4,000 merchants.

“We plan to expand to Dubai

by the end of the current year,

and to North America and Eu-

rope next year,” Tabbara said.

Ecomz already has a limited

presence in Canada. The com-

pany will first focus on the

Middle East and North Africa

(MENA) where they hope to

find huge opportunities as they

hold a competitive advantage

thanks to their unique product

and the fact that they know

the language and culture of the

region, according to Tabbara.

He said that within one week

of signing up, customers will be

able to easily create their own

e-commerce website through

the Ecomz platform, while

this might take much more

time if other alternatives were

used. Besides geographical

expansion, part of the funds

will be used to enhance the

technical features of the plat-

form through AI and machine

learning capabilities which will

enable Ecomz to easily compete

in North America and Europe,

Tabbara said.

L0819-

TAX DECLARATIONS

TO BE USED AS BASIS

FOR OBTAINING LOANS

Banks and financial institu-

tions are allowed to lend or

renew credit facilities to busi-

nesses only against duly au-

dited financial statements that

are identical to those submit-

ted to the tax authorities, ac-

cording to a new circular by

the Central Bank (BDL). The

decision applies to enterprises

or companies whose annual

turnover is equal to or greater

than LL1.5 billion ($1 million).

The banks’ assessment of the

credit worthiness of a business

should be based on financial

statements that fulfill these

conditions and that include

the balance sheet, the income

statement, and the cash flow

statement, BDL said. Banks

and financial institutions

whose current lending portfo-

lio is not fully in line with the

new regulation will be given

until the end of September

2020 to rectify the situation.

They are required to ask busi-

nesses that have not amended

their files to immediately set-

tle their loans, otherwise they

must deposit an equivalent

amount with BDL. This deposit

will not generate any interest

and will be frozen until the

adjustment takes place. The

move aims put the practice of

some businesses that hold two

different accounting records

for the purpose of tax evasion

to an end. Where this prac-

tice takes place, an ‘official’

record is submitted to the tax

authorities while the other,

the accurate record, is used for

the business’ own managerial

purposes. Businesses that hold

double records usually do not

issue invoices for transactions

that take place outside the of-

ficial accounting records.

L0819-

BANKS TO

CAPITALIZE PROFIT ON

FINANCIAL ENGINEERING

Banks and financial institu-

tions are now allowed to record

immediate profits on finan-

cial engineering operations

carried out with the Central

Bank (BDL) provided the funds

they used in these operations

result from their foreign ex-

change operations, according

to a new BDL circular. They are

also allowed to record immedi-

ate profits if the proceeds used

in these operations are not

derived from funds deposited

with BDL. If these conditions

are not met, banks and finan-

cial institutions must continue

to apply an earlier decision

requiring them to record the

profits resulting from swap op-

erations, or sale and purchase

operations of financial instru-

ments performed with BDL,

over the life of the exchanged

instruments. The new amend-

ment applies to operations ex-

ecuted starting from the begin-

ning of this year. The surplus

(profit) resulting from these

operations must be recorded

in the income statements of

the banks and financial insti-

tutions. The profit must be

transferred at the end of the

fiscal year to their non-distrib-

utable general reserves. This

means that the banks and fi-

nancial institutions will not be

able to distribute these profits

as dividends, which will help

bolster their equity and capi-

tal adequacy. These reserves

could also be used to help

them meet any new require-

ments. The move is part of the

implementation of the Inter-

national Financial Reporting

Standard 9 (IFRS 9) which was

published by the International

Accounting Standards Board

(IASB) and which addresses

accounting procedures relat-

ing to financial instruments.

The new decision will also help

boost BDL’s foreign currency

reserves. BDL’s Banking Con-

trol Commission is to oversee

the sound implementation of

the new decision, according to

the circular.

L0819-

IN BRIEF

MONEY & BANKING

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8 LEBANON OPPORTUNITIES, AUGUST 2019