Lebanon: Investing

FDI in Figures

Lebanon has traditionally been open to foreign direct investment, although recent political instability, macroeconomic imbalances and a foreign currency crisis have dampened the country's attractiveness. According to the 2022 World Investment Report published by UNCTAD, FDI inflows were estimated at USD 273 million in 2021, down by 79.1% compared to one year earlier (and to a yearly average of USD 2.4 billion in the previous decade). Meanwhile, the stock of FDI reached USD 68.9 billion. In the past, FDIs have fuelled job creation and boosted the information, technology and industrial sectors, but regulatory and institutional bottlenecks affected the prospects for FDI diversification. In the last three years, Lebanon has been hit by a series of shocks: an economic and financial crisis, followed by the COVID-19 pandemic, a political crisis and finally, the explosion at the port of Beirut. The unprecedented economic crisis has had large and persistent negative impacts that continued affecting the country in 2022, deterring FDI. Historically, the main foreign investors in Lebanon are France, the US, the UAE, Germany, the UK, the Netherlands, Jordan and Egypt; with investments oriented mainly towards real estate, financial services and tourism (the majority of which is based in or around Beirut – data IDAL). A large part of investment comes from the Lebanese diaspora (especially in the real estate sector) and takes the form of M&A (as opposed to little greenfield investment). According to the latest data released by the Bank of Lebanon, FDIs to the country totalled USD 306 million in the first half of 2022.

The serious economic and political crisis that Lebanon is going through and the sovereign default will continue to affect investors’ confidence. Other factors already hindering FDI include high unemployment, brain drain, energy supply shortages and regulatory obstacles. Furthermore, the Lebanese financial sector has imposed ad hoc capital controls, preventing most Lebanese from transferring money abroad, despite the fact that around two-thirds of accounts in Lebanese banks are denominated in dollars. According to the World Bank, Lebanon’s depression is likely to rank among the top three most severe economic crises since the 1850s, as the country’s currency has lost more than 90% of its value since 2019, contributing to record-high inflation due to Lebanon’s excessive reliance on imports. Following the 2020 default, Lebanon is unable to borrow on international capital markets. Most analysts see Lebanon's short to medium-term economic future as bleak, with probable fiscal austerity, persistent capital controls, further devaluation, and potential impairment applied to wealthy depositors to recapitalise the banking sector. These developments will affect Lebanon's potential as a destination for foreign investment, degrading its position in the years to come. Other concerns include over-regulation, arbitrary licensing, outdated legislation, ineffectual courts, high taxes and fees, poor economic infrastructure, and social unrest. As a result, Lebanon ranks 162nd out of 177 countries in the 2022 Index of Economic Freedom.

What to consider if you invest in Lebanon

Protection of Foreign Investment

Procedures Relative to Foreign Investment

Freedom of Establishment

Foreign investors may establish, acquire, and dispose of interests in business enterprises and may engage in all types of remunerative activities. However, restrictions apply to manufacture and trade products related to defense and weapons, political newspapers and all broadcast media, where only Lebanese nationals can obtain licenses. Furthermore, only Lebanese citizens are permitted to practice law.

Acquisition of Holdings

Foreigners are allowed to own and manage 100% of limited liability companies (SARL), unless the company engages in certain commercial activities such as exclusive commercial representation (in such cases, Lebanese citizens must hold a majority of capital, and the manager must be a Lebanese national).
Concerning joint-stock companies (Société Anonyme Libanaise – SAL), one-third of the board of directors should be Lebanese; board members can be either shareholders or non-shareholders; one-third of capital shares should be held by Lebanese for companies that provide public utility services; and capital shares and management in cases of exclusive commercial representation are limited (Legislative Decree No. 34 dated August 5, 1967). Banking, insurance, and cargo, which can only operate as SALs, are required to have a Lebanese majority on the board, making them, in practice, restricted for FDI.
For holding and offshore companies, all board members may be non-Lebanese.

Obligation to Declare

It is required of each foreign company wishing to do business in Lebanon to inform the Ministry of  Economy and Trade in a formal document prior to registering in the Commercial Registrar.

Requests For Specific Authorisations

IDAL has the authority to award licenses and permits for new investment in specific sectors.
The law does not permit offshore banking, trust, and insurance companies to operate in Lebanon.
Banking, insurance, and cargo, which can only operate as SALs, are required to have a Lebanese majority on the board, making them, in practice, restricted for FDI.
Several restrictions apply to the real estate sector as well (cabinet approval is required for acquisitions of land above 3,000 square meters).

Office Real Estate and Land Ownership

Possible Temporary Solutions

Consult Instant Offices, CoWorker, Property Finder, etc.

The Possibility of Buying Land and Industrial and Commercial Buildings

Lebanese regulations permits foreigners to acquire up to 3,000 square meters of real estate without a permit, whereas cabinet approval is required for acquisitions exceeding this threshold. The cumulative real estate acquisition by foreigners may not exceed 3% of total land in any district (10% for Beirut).

Risk of Expropriation

According to the Lebanese Constitution, expropriation must be for a public purpose and calls for fair and adequate compensation. However, land expropriation is relatively rare.

Investment Aid

Forms of Aid

Incentives may take the form of tax benefits, facilitating permits for foreign labor, reductions on construction and work permit fees, exemptions on land registration fees, tailored incentives through package deals for large investment projects, etc. However, the Lebanese government generally does not issue guarantees or jointly finances foreign direct investment projects.
For further information, consult the dedicated page on the website of the Investment Development Authority of Lebanon (IDAL).

Privileged Domains

Job creation, company relocation, tailored incentives through package deals, incentives for investments in specific zones, etc.
For further information, consult the dedicated page on the website of the Investment Development Authority of Lebanon (IDAL).

Privileged Geographical Zones

Specific investment incentives are available for sectors such as information technology, telecom, media, tourism, industry, agriculture, and agro-industry. For detailed information about the incentives available for specific sectors, consult the "Sectors in Focus" section on the portal of the Investment Development Authority of Lebanon (IDAL).

Free-trade zones

Industrial investments in rural areas benefit from tax exemptions of 6 or 10 years, depending on specific criteria. Exemptions are also available for investments in South Lebanon, Nabatiyeh, and the Bekaa Valley. The website of the Investment Development Authority of Lebanon (IDAL) provides detailed information about investment incentives available in each of the 8 governorates in which the country is divided.
Furthermore, Lebanon has one duty-free zone at Beirut-Rafik Hariri International Airport and two free trade zones, the Beirut Port and the Tripoli Port.

Public aid and funding organisations

Investment Development Authority of Lebanon (IDAL) 

Investment Opportunities

The Key Sectors of the National Economy

ICT, healthcare, safety and security, waste management, and franchising have historically attracted foreign investments.
For detailed information about the incentives available for specific sectors, consult the "Sectors in Focus" section on the portal of the Investment Development Authority of Lebanon (IDAL).

High Potential Sectors

The most attractive sector is the energy sector, particularly for power production, renewable energies, and oil and gas exploration.

Privatization Programmes

The High Council for Privatization and Partnerships (HCP) manages privatization and public-private sector partnership projects. Although laws were approved to privatize the telecom sector (Law 431) and the electricity sector (Law 462), no progress has been made.
In 2017, the Ministry of Energy and Water launched tenders for solar power plants under the IPP law, and has issued three wind power plants licenses since then. Tenders for two combined cycle gas turbine IPPs were supposed to be launched in September 2019, but the plan was delayed.
Finally, the Beirut Stock Exchange (BSE) should have been privatized following a decree by the Capital Markets Authority (CMA), however the corporatization has yet to occur.

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Lebanon
DgMarket, Tenders Worldwide
Council for Development and Reconstruction (CDR), Information on projects to be awarded and ongoing and projects

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors

The fixed-line telephony and energy transmission sectors are closed to domestic and foreign investors as they are currently operated by state-owned enterprises, which have a de facto monopoly.
The Central Bank owns 99.23% of the air carrier Middle East Airlines, whose monopoly is scheduled to end in 2024.

Finding Assistance For Further Information

Other Useful Resources

Central Bank of Lebanon
Ministry of Economy and Trade

Doing Business Guides

Country Commercial Guide for Lebanon - trade.gov
Doing Business in Lebanon - World Bank
Doing Business in Lebanon - UHY

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