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INVEST
IN LEBANON

Strategically located at the intersection of Europe, Asia, and Africa, Lebanon is a historical melting pot for multiple civilizations. It is a small, but a multilingual haven of culture and diversity that enjoys the most hospitable MENA destination for business, culture, and leisure with a Mediterranean climate, cosmopolitan lifestyle and a variety of touristic attractions and activities across breath-taking natural landscapes.


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Overview about Lebanon:

Lebanon also boasts state-of-the-art health care services, internationally renowned for the quality medical centers and staff. 

Because of its location and preferential trade agreements it has signed with the EU and Arab countries, Lebanon can provide companies easy access to regional and global markets

Lebanon is divided into 8 Governorates; Akkar, Baalbeck-Hermel, Beirut, Bekaa, Mount Lebanon, North Lebanon, Nabatiyeh, and South Lebanon.  The Governorate (Muhafazah) is considered an administrative division of the country. It is generally divided into Districts (Qada’a). Only Beirut has no division.

In 2003, the number of governorates increased from six to eight, with the creation of two additional Baalbek-Hermel Governorate (formerly part of the Bekaa) and Aakkar Governorate (formerly part of North Lebanon). Each governorate boasts an abundance of investment opportunities based on its socio-economic environment and the natural resources it holds. You can find regional core strengths in agriculture, tourism, agro food, and soft industries. Those prominent regional economies offer a diverse investment environment for your business portfolio.

 

Trade

Lebanon is mainly a service driven economy and foreign investments remain concentrated in the services and trade sector with 44% and 16%. (Source: IDAL calculations, Financial Times and Ministry of Economy and Trade)

Situated on the eastern coast of the Mediterranean Sea, in the heart of the Arab world, Lebanon’s role in the region was principally shaped by trade that constituted a significant source of both income and employment.

In the classification of the World Bank, Lebanon is an upper middle-income country. Compared to its neighbors, it is characterized by a very high share of the service sector in the economy (almost 80% in 2015, which is among the highest in the world). Correspondingly, the share of industry is very low at only 17% of GDP and is indeed the lowest as a percentage of GDP in the region.

 

The service orientation of the Lebanese economy is reflected in its international trade position. Goods exported as a percentage of GDP are low, while the level of goods imported is about the same as in the neighboring countries. International trade in services on the other hand are much larger than in the comparison countries and registers a surplus.

 

Overall trade to and from Lebanon has been impacted by the regional conflict and the closing of the border areas with Syria. In 2017, Lebanon’s Balance of Payments (BoP) registered a deficit of USD 156 million in 2017, much lower than the annual average deficit of USD 1.88 billion recorded over the period 2011-2015.  As for the trade balance, Lebanon’s trade deficit increased by 29% to reach USD 20.3 billion by the end of 2017.

Invest in Lebanon and enjoy: 

  • Free Market economy
  • Non-interventionist stance towards private investments
  • One of the most liberal investment climates in the middle east
  • 2017 GDP at current prices (USD Billion): 53.4
  • GDP/Capita (Current prices): 11.497.5
  • Real GDP Growth (Proj-2018): 2.70%
  • Average inflation rate (2017): 2.0%
  • Trade Balance (USD Million): -20,286
  • FDI inflows (USD Billion-2017): 2.63
  • Unemployment rate (EST. 2017): 6.3%

Source: IDAL 2018, Independent Monetary Fund (IMF), central Administration for Statistics (CSA), Lebanese Customs Administration, UNCTAD, International Labor Organization (ILO)

 

5 Reasons on why to invest in Lebanon

  • Lebanon was ranked 3rd worldwide on the Global Ranking for Total Early Stage Entrepreneurial Activity and 4th worldwide for its entrepreneurship Impact on Innovation and 17th worldwide for rate nascent entrepreneurs.
  • Investment opportunities in Lebanon are abundant from financial services to Real estate, tourism, ICT, Healthcare, pharmaceutical and the agro-food sector.
  • Lebanon is the 45th worldwide for soundness of its banks and 2nd in the MENA region in the numbers of Venture Capitals with a well maintained strong liquidity ratio equal to 80%, and USD 220 Billion in 2017 or 363% of the Country’s GDP
  • Competitive Corporate taxes with a 17% rate
  • Lebanon is considered the 8th worldwide for the overall quality of education and the 4th for the quality of Math and science Education.

 

Foreign Direct Investment

FDI Data

Foreign Direct Investments flows (FDI) to Lebanon jumped by 1% in 2017 compared to 2016 reaching a value of 2.62 USD Billion, reversing the trend of overall FDI flows to the region, again highlighting the confidence of investors in the Lebanese economy.

On the other hand, the West Asia region to which Lebanon belongs to, registered a continuous decline in FDI, with a 17% decline from 2016 to reach USD 25.5 billion. This decline was fueled by weak oil prices, fiscal restructuring and political uncertainty in Gulf countries.

In relative terms, when accounting for a country’s size and GDP relative to FDI inflows, Lebanon stands out as the top performer in the region with FDI inflows accounting for 5.1% of GDP.

The trend in the West Asia region follows the trend in Global FDI inflows which reached USD 1.43 trillion in 2017, a 23% decrease from 2016 levels, stemming from uncertainties regarding investment policies in major economies and escalating trade tensions.

 

 

Foreign Investment Structure

Lebanon announced 45 new foreign projects and partnerships in 2017. One of the main trends characterizing these investments is a shift away from capital-intensive projects towards knowledge-intensive ones.

 

The Lebanese economy observed a growing trend of internationalization, namely through foreign brands expressing interest in setting up shop locally. Additionally, three international media companies have established Lebanese branches and representative offices, through which they plan on providing press coverage and other digital services to the region as a whole.

 

The services sector attracted the largest share of projects, most often backed by local production expansions and entrepreneurship activities. This sector remains catalyzed by financial institutions and consulting firms. Moreover, the ICT sector is witnessing solid activity, with ventures in software development, data processing, e-Health services, and technical support. ICT projects particularly illustrate Lebanon’s competitive advantage in a growing knowledge economy.

 

In terms of distribution by country of origin, European countries accounted for 31% of foreign investments in Lebanon, the largest share for 2017. The main countries represented are the United Kingdom (9%), France (7%) and Switzerland (7%). European projects mainly revolved around services, including ICT, Consulting, and Financial Advisory.

Middle-Eastern countries came in second with 29% of the total of foreign investments in Lebanon. The UAE took the lead (11%), followed by the KSA (2%), Kuwait (2%), and Iraq (2%). The decline in fund flows from GCC countries is mainly attributed to the slump in oil prices. This segment of investors focused on infrastructure and real estate developments, as well as certain trade activities.

North America represented 22% of the total of foreign companies in Lebanon, with investments from the USA (7%), Canada (2%), and Panama (2%). Projects targeted the real-estate, media, and consulting sectors.

 

The remaining investing countries are Turkey (4%), followed by China, Hong-Kong, Japan, and Uganda (2% each). Their main sectors of focus are infrastructure and real estate development.

 

Download Document

IDAL INVESTMENT OPPORTUNITIES IN LEBANON 2018.pdf

Source: website

http://investinlebanon.gov.lb/en/lebanon_at_a_glance

 

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