An official website of the United States government Here's how you know

Official websites use .gov

A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS

A lock ( ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

Executive Summary

Lebanon is open to foreign direct investment and has many advantages that encourage companies to set up offices in the country.  These include a free market economy, the absence of capital controls on foreign exchange, a well-developed banking system linked to the international financial system, a highly educated labor force, limited restrictions on investors, and a currency pegged to the U.S. Dollar.  However, issues that continue to cause frustration among local and foreign businesses include: institutionalized corruption, political instability, over-regulation, arbitrary licensing, outdated legislation, ineffectual courts, high taxes and fees, poor economic infrastructure, and a fragmented and opaque tendering and procurement processes.

Government efforts to improve the investment climate waned following parliamentary elections in May 2018 and a nearly nine-month government formation process.  On February 15, 2019, Parliament approved the new Council of Ministers.  The government reiterated  its intent  to implement Lebanon’s multi-billion dollar Capital Investment Plan (CIP) and carry out the range of sectoral reforms adopted at the April 2018 Paris CEDRE investment conference.  Progress on reforms will be key to unlock USD 11 billion in loans and grants pledged by international donors and to revive investor confidence.  As an initial step, the new government announced its aims to enact a disciplined budget for 2019 and implement electricity sector reforms to boost generation and increase revenue.

To comply with the constitutional provision to reconcile the public finance accounts, the Ministry of Finance (MoF) conducted a review of public expenditures from 1993 to 2017, and submitted its findings to the Finance Minister for government approval. The reconciliation of the past public finance accounts will allow for more transparent and complete annual audits of the accounts by the Court of Audit, the country’s highest financial tribunal under the Presidency of the Council of Ministers.  The Court of Audit’s yearly audits of public spending is a requirement for the Parliament to vote on the annual budget.  For the first time since 2010, the government posted online a Citizen Budget, a layperson’s guide to the Budget Law, to accompany the enacted 2018 budget.  The government announced it intends to appoint regulatory bodies (telecom, aviation, electricity) and pass legislation to simplify  business transactions, including a bankruptcy law, a law on public procurements, and a law to promote competition in Lebanon’s monopolistic import sectors.

The business climate remained sensitive to regional political and security developments.  The Syria conflict has negatively impacted the Lebanese economy, cutting off one of Lebanon’s major markets and its overland transport corridor to other markets.  Lebanon continued to suffer from long-term structural weaknesses predating the Syria crisis, including weak infrastructure, poor public service delivery, and chronically high public debt.

Lebanon’s sovereign debt-to-GDP ratio is the third highest in the world.  Most of the debt is held by local banks and the Central Bank (Banque du Liban/BdL).  The public deficit reached 11 percent of GDP in 2018 and is a concern for investors.  The Central Bank continues to assert  that the government will honor payments to maturing sovereign debt due in 2019.  The Central Bank also asserts that it will maintain monetary and financial stability, reassuring investors that, as in the past, there will be no debt defaults or currency depreciation.

Lebanon welcomes U.S. investments.  Opportunities exist for U.S. companies in the energy sector, particularly for power production, renewable energies, and oil and gas exploration.  Information and communication technology, healthcare, safety and security, waste management, and franchising have historically attracted U.S. investments.

Table 1: Key Metrics and Rankings

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2018 138 of 180 http://www.transparency.org/research/cpi/overview
World Bank’s Doing Business Report 2019 142 of 190 http://www.doingbusiness.org/en/rankings
Global Innovation Index 2018 90 of 126 https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner country ($M USD, stock positions) 2017 $448 http://www.bea.gov/international/factsheet/
World Bank GNI per capita 2017 $8,400 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

Lebanon is open to foreign direct investment (FDI).  The Investment Development Authority of Lebanon (IDAL) is the national authority responsible for promoting local and foreign investment in Lebanon covering eight priority sectors: industry, media, technology, telecommunications, tourism, agriculture, and agro-industry.  IDAL has the authority to award licenses and permits for new investment in specific sectors.  It also grants special incentives and tax exemptions for projects implemented by local and foreign investors based on an investment’s geographic location, sector, and number of jobs created (Investment Law No. 360).  IDAL seeks to facilitate international and local partnerships through joint ventures, equity participation, acquisition, and other mechanisms.  Moreover, it provides business intelligence, market studies, and legal and administrative advice to potential investors.  In February 2018, IDAL established the Business Support Unit (BSU) providing free legal, accounting and financial advice to startups across sectors.  IDAL publishes its investment incentives online by sector at http://investinlebanon.gov.lb/en/sectors_in_focus  .

Lebanon’s CIP covers USD 23 billion in projects in the transport, water and irrigation, wastewater, electricity, telecom, and solid waste management sectors that rely in large part on private sector financing.  CEDRE conference donors have pledged over USD 11 billion, of which more than 90 percent are in soft-loans and USD 860 million in grants for Phase I (2018-2021).  These funds are contingent upon structural economic reforms in fiscal management, electricity tariffs, and transparent public procurement, among many others.  Investors may reference the CIP online at:  http://www.pcm.gov.lb/arabic/ListingAndPDFWithDropdown.aspx?pageid=11222 .

The High Council for Privatization and Partnerships (HCP), a ministerial committee chaired by the Prime Minister, is in charge of coordinating and implementing Public Private Partnership (PPP) projects.  Lebanon identified 18 such projects at CEDRE.  The HCP will appoint steering committees that involve the relevant government stakeholders to develop project requirements and tender documents.  U.S. investors may review PPP opportunities online at http://hcp.gov.lb .

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign private entities may establish, acquire, and dispose of interests in business enterprises and may engage in all types of remunerative activities.  Lebanese law allows the establishment of joint-stock corporations, limited liability, and offshore and holding companies.  Specific requirements apply for holding and offshore companies, real estate, insurance, media (television and newspapers) and banking.

Legislative Decree No. 35 (August 5, 1967), under the Commercial Code, permits foreigners to own and manage 100 percent of limited liability companies (Société à Responsabilité Limitée – SARL), except if the company engages in certain commercial activities such as exclusive commercial representation.  In these cases, Lebanese citizens must hold a majority of capital, and the manager must be Lebanese (Legislative Decree No. 34 dated August 5, 1967).

Legislative Decree No. 304 of the Commercial Code (December 24, 1942) governs joint-stock corporations (Société Anonyme Libanaise – SAL), and was amended by Law No. 126 dated March 29, 2019.  Limitations related to foreign participation stipulates that: 1) one-third of the board of directors should be Lebanese (Article 144 amended); 2) board members can be either shareholders or non-shareholders (Article 147 amended); 3) one-third of capital shares should be held by Lebanese for companies that provide public utility services (Article 78); and 4) capital shares and management in cases of exclusive commercial representation are limited (Legislative Decree No. 34 dated August 5, 1967).  In November 2016, the Parliament passed Law 75 prohibiting joint stock corporations from issuing bearer shares and required them to replace their existing bearer shares with nominal shares which identify the owner.  In the financial sector, including banking and insurance, establishments must take the form of a joint-stock company.

Holding and offshore companies are structured as joint-stock corporations and governed by Legislative Decree No. 45 (on holdings) and Legislative Decree No. 46 (on offshore companies), both dated June 24, 1983.  The law on offshore companies was amended by Law No. 85, dated October 18, 2018, whereby all board members may be non-Lebanese (Article 2, para 4) .  A foreign non-resident chairman/general manager of a holding or an offshore company is exempt from the obligation of holding work and residency permits.  Law No. 772, dated November 2006, exempts holding companies from the obligation to have two Lebanese persons or legal entities on their board of directors.  All offshore companies must register with the Beirut Commercial Registry.  The law does not permit offshore banking, trust, and insurance companies to operate in Lebanon.

Law No. 296, dated April 3, 2001, amended the 1969 Law No. 11614 that governs acquisition of property by foreigners.  The 2001 law eased legal limits on foreign ownership of property to encourage investment in Lebanon, especially in industry and tourism, abolished discrimination for property ownership between Arab and non-Arab nationals, and set real estate registration fees at approximately six percent for both Lebanese and foreign investors.  The law permits foreigners to acquire up to 3,000 square meters (around 32,000 square feet) of real estate without a permit but requires cabinet approval for acquisitions exceeding this threshold.  The cumulative real estate acquisition by foreigners may not exceed three percent of total land in any district.  Cumulative real estate acquisition by foreigners in the Beirut region may not exceed ten percent of the total land area.  The law prohibits individuals not holding an internationally-recognized nationality from acquiring property in Lebanon.  In practice, this restriction attempts to prevent Palestinian refugees who are long-term residents in Lebanon from owning property.

The Lebanese Government does not review FDI transactions for national security considerations.

Other Investment Policy Reviews

Lebanon is not a member of either the Organisation for Economic Co-operation and Development (OECD) or the World Trade Organization (WTO).  The United Nations Conference on Trade and Development (UNCTAD), in collaboration with IDAL, published a comprehensive Investment Policy Review for Lebanon in December 2018, which it officially launched in Beirut in March 2019.  The report provides a thorough assessment of Lebanon’s business environment, with concrete short, medium, and long-term recommendations to revitalize Lebanon’s investment climate.  These include creating an FDI promotion strategy and passing or amending legislation, rules, and regulations in the taxation, labor, competition, and governance regimes towards a more conducive business environment.  The full report is available at https://unctad.org/en/PublicationsLibrary/diaepcb2017d11_en.pdf 

Business Facilitation

Lebanon’s Ministry of Justice publishes procedures, documents, and payments needed to conclude the registration of any company online at www.justice.gov.lb  under the Citizen Services tab.  According to the Ministry of Economy and Trade (MoET), the registration process takes approximately one day and requires a notary public.  There is no other way to register businesses.  Foreign companies are required to register electronically.  MoET publishes a list of documents and procedures for foreign companies and exclusive agencies at http://www.economy.gov.lb/en/what-we-provide/trade/companies-department/ .  IDAL also provides a portal for doing businesses in Lebanon and outlines all requirements at http://investinlebanon.gov.lb/en/doing_business .

MoET established a small and medium-sized enterprises (SME) unit in 2005.  The unit focuses on policy and governance services to improve Lebanon’s business environment, offering linkages within the business community and with the international community, and access to financing.  This unit is implementing a National SME Strategy 2014-2020 and has developed a digital platform gathering information regarding services provided at the national level to SMEs.  The MoET defines enterprises with less than 10 employees as micro-enterprises, firms with less than 50 employees as small enterprises, and those with less than 100 employees as medium enterprises.

Outward Investment

Lebanon neither promotes nor incentivizes outward investment, nor does it restrict domestic investors from investing abroad.

2. Bilateral Investment Agreements and Taxation Treaties

Lebanon does not have a bilateral investment treaty nor a bilateral taxation treaty with the United States.  The Ministry of Finance lists all of Lebanon’s taxation agreements online at http://www.finance.gov.lb/en-us/Finance/IA/TC/Pages/default.aspx .

In October 2017, Parliament increased the value-added tax from 10 percent to 11 percent, the corporate tax on financial institutions from 15 percent to 17 percent, and the tax on interest earned on bank deposits from 5 percent to 7 percent.  The revised tax law also levied a USD 53.10 import duty on shipping containers.  Additionally, the government enacted a Petroleum Taxation Law, which applies to firms extracting hydrocarbons from Lebanon’s seabed.  Income tax on petroleum operations is 20 percent. https://www.lpa.gov.lb/regulations.php 

Lebanon signed the Euro-Mediterranean Partnership (ENP) agreement in 2002, which came into force in April 2006.  Lebanon reduced tariffs on imported products from the European Union (EU) in 2008.  The EU and Lebanon finalized a review of the ENP in November 2015.  Lebanon also signed the Convention on Pan-Euro-Mediterranean Preferential Rules of Origin in October 2014, which Parliament ratified in February 2017.

Lebanon has signed bilateral investment agreements with the following partners (in alphabetical order, as of April 2019):  Armenia, Austria, Azerbaijan, Bahrain, Belarus, Belgium/Luxemburg, Benin, Bulgaria, Canada, Chad, Chile, China, Cuba, Cyprus, Czech Republic, Egypt, Finland, France, Gabon, Germany, Greece, Guinea, Hungary, Iceland, Iran, Italy, Jordan, Korea (South), Kuwait, Malaysia, Mauritania, Morocco, Netherlands, OPEC Fund, Pakistan, Qatar, Romania, Russia, Slovak Republic, Spain, Sudan, Sultanate of Oman, Sweden, Switzerland, Syria, Tunisia, Turkey, United Arab Emirates, Ukraine, United Kingdom, and Yemen.  For more information, please visit the Ministry of Finance’s website on: http://www.finance.gov.lb/en-us/Finance/IA/IPA/ 

3. Legal Regime

Transparency of the Regulatory System

Private firms should exercise caution when bidding on public projects.  Lebanese government agencies often sole-source contracts, undertaking direct contracting processes that operate according to differing standards and without a formal competitive solicitation.  Public institutions evade regulations that promote full and open competition by splitting contract requirements into smaller solicitations whose values do not exceed government agency procurement limits.  There is no unified procurement law.  A modern Procurement Law is currently under preparation and will require the Cabinet and Parliament’s ratification.  The Public Procurement Management Administration (PPMA), known as the “Tenders Board” has the authority to review terms of reference and evaluate bids for GoL contracts.  The Central Inspection Board (CIB), an oversight body within the Office of the Prime Minister, oversees government administrative processes, and the Court of Audit has oversight over public expenditures.  The Social Security Fund and the Council for Development and Reconstruction, public entities that manage large funding flows, remain outside the CIB jurisdiction.

Excessive regulation hampers procedures for business entry, operation, and exit.  However, the process does not discriminate against foreign investors.  International companies face an unpredictable and opaque operating environment and often encounter unanticipated obstacles or costs late in the process.  Despite this, the World Bank’s 2019 Doing Business report (http://www.doingbusiness.org ) notes that it takes entrepreneurs 15 days to start a business in Lebanon, compared to the average of 21 days in the Middle East and North Africa (MENA) region.

Trademark registration, economic and trade indicators, and market surveillance reports, are available online at: http://www.economy.gov.lb .  However, some procedures, including those related to protecting intellectual property rights, still require the right-holder to visit the ministry in person to finalize and pay required dues.

All legislation, government decrees, decisions, and official announcements are published in the Official Gazette.  The government does not publish proposed draft laws and regulations for public comment, but a parliamentary commission may invite private sector stakeholders to comment on legislation.  Telecom Law No. 431 requires the Telecommunication Regulatory Authority (TRA) to issue regulations in draft for public consultation to promote transparency and enable the general public to shape future regulations.  The TRA has not introduced new regulations since the term of its executive board expired in February 2012.  Publicly listed companies adhere to international accounting standards.  In general, legal, regulatory, and accounting systems for Lebanese businesses in the formal sector accord with international norms.

Lebanon passed the Access to Information Law in January 2017 to promote transparency in the public sector.  The law permits anyone, including foreigners, to request information from government agencies.  A Whistleblower Protection law also passed in October 2018.  While the Whistleblower law is in force, the establishment of a National Anti-Corruption Commission to oversee the law’s implementation has yet to be approved by Parliament.  In January 2017, Lebanon announced its intent to join the Extractive Industries Transparency Initiatives (EITI), a global standard to promote transparency of the extractive sector.  In September 2018, Parliament adopted the Transparency in Oil and Gas Law to facilitate the EITI accession process.  To complete Lebanon’s candidacy, the Minister of Energy and Water announced that Lebanon would form a Multi-Stakeholder Group (MSG), with representatives from government, private firms operating in Lebanon, and civil society.  In March 2019, the Minister of Energy and Water invited civil society to choose independently its representative to the MSG, as per the EITI’s requirements.  EITI membership will require annual data disclosures on licenses, contracts, beneficial ownership, payments, revenues, and production.

International Regulatory Considerations

Lebanon is not part of any regional economic block.  It adopts a variety of standards based on the type of product and product destination.  Lebanon is not a member of the World Trade Organization (WTO), but has held observer status since 1999.  Lebanon does have a WTO/TBT (technical barriers to trade) Enquiry Point that handles enquiries from WTO Member States and other interested parties.

Legal System and Judicial Independence

Lebanon has a civil (Roman and Codified Law) legal system inspired by the French civil procedure code (three degrees of jurisdictions: First Instance, Appeal, and Supreme Court).  Ownership of property is enforced by registering the deed in the Property Registry.  Lebanon has a written commercial law and contractual law.  Lebanon has commercial, civil, and penal courts, but no specialized courts to hear intellectual property (IP) claims.  Civil and/or penal courts adjudicate IP claims.  Lebanon has an administrative court, the State Council, which handles all disputes involving the state.  Lebanon has a labor court in seven out of its nine governorates to hear claims of unfair labor practices.  The current judicial process is generally viewed as competent and reliable on a procedural basis.

Local courts accept investment agreements subject to foreign jurisdictions, if they do not contravene Lebanese law.  Judgments of foreign courts are enforced subject to the Exequatur obtained.  Weak judicial capacity (i.e. shortage of judges, inadequate support structures, administrative delays) results in delays in the handling of cases.  The Lebanese Constitution guarantees the judicial system’s independence.  However, politicians and powerful lobbying groups sometimes interfere in the court system.

Laws and Regulations on Foreign Direct Investment

A foreigner may establish a business under the same conditions as a Lebanese national but must register the business in the Commercial Registry.  Foreign investors who do not manage their business from Lebanon need not apply for a work permit.  However, foreign investors who own and manage their businesses within Lebanon must apply for an employer work permit and a residency permit.  Employer work permits stipulate that a foreign investor’s capital contribution cannot be less than USD 67,000.  The investor must also hire three Lebanese employees and register them in the National Social Security Fund (NSSF) within the first six months of employment.

Companies established in Lebanon must abide by the Lebanese Commercial Code and are required to retain the services of a lawyer to serve as a corporate agent.  Local courts are responsible for enforcing contracts.  There are no sector-specific laws on acquisitions, mergers, or takeovers, with the exception of bank mergers.

Lebanese law does not differentiate between local and foreign investors, except in land acquisition (see Real Property section).  Foreign investors can generally establish a Lebanese company, participate in a joint venture, or establish a local branch or subsidiary of their company without difficulty.  Specific requirements apply for holding and offshore companies, real estate, insurance, media (television and newspapers), and banking.

Lebanese law allows the establishment of joint-stock corporations, limited liability, offshore, and holding companies.  Offshore and holding companies, however, must be joint-stock corporations (Société Anonyme Libanaise – SAL).  The Lebanese Commercial Code governs these entities.

IDAL’s website (http://investinlebanon.gov.lb/ ) provides investors information on investment legislation, regulations, and starting a business.  IDAL’s proposed changes to investment-related laws and regulations, including amending requirements for IT companies to benefit from IDAL incentives, are pending government approval.  IDAL is finalizing a detailed ICT plan aimed at expanding facilities, developing incentives, and facilitating investments in the ICT sector.  IDAL intends to focus its investment promotion strategy on attracting high value-added innovative investments related to all of the sectors under its mandate.

Competition and Anti-Trust Laws

Lebanon has not enacted a law that governs competition.  Local courts review transactions for competition-related claims.

Expropriation and Compensation

Land expropriation in Lebanon is relatively rare.  The Law on Expropriation (Law No. 58, dated May 29, 1991, Article 1) and Article 15 of the Constitution specify that expropriation must be for a public purpose and calls for fair and adequate compensation.  The government pays compensation at the time of expropriation, but the rate is often perceived as below fair market value.  The government does not discriminate against foreign investors, companies, or their representatives on expropriations.

The government established three real estate companies in the mid-1990’s to encourage reconstruction and development in Greater Beirut following the Lebanese Civil War:  1) private corporation Solidere for the development and reconstruction of Beirut’s downtown commercial district, 2) private corporation Linord, for northern Beirut, 3) and public institution Elyssar for the southwest suburbs of Beirut.  Linord has been dormant for years, and Elyssar’s projects have stalled since 2007.  The government granted these three companies the authority to expropriate certain lands for development under the Law on Expropriation.  Landowners and squatters have challenged the land seizures in court.

Dispute Settlement

ICSID Convention and New York Convention

Lebanon is a member of the International Center for the Settlement of Investment Disputes (ICSID Convention).  Lebanon ratified the 1958 Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) in 2007.  Lebanese law conforms to both conventions.

Investor-State Dispute Settlement

The government accepts international arbitration related to investment disputes.  In cases involving concessions or public projects, the government does not accept binding international arbitration unless the contract includes an arbitration clause that was obtained through prior approval by Cabinet decree.  However, there is an exception for investors from countries that have a signed and ratified investment protection agreement with Lebanon that provides for international arbitration in the case of disputes.  In the past, the government has faced challenges related to previously-awarded contracts and resorted to international arbitration for resolution.  To post’s knowledge, there are no known new cases.  In 2010, the government settled a dispute with a Chinese contracting company working to expand the northern port of Tripoli.

International Commercial Arbitration and Foreign Courts

International arbitration is accepted as a means to settle investment disputes between private parties.  The Lebanese Centre for Arbitration was created in 1995 by local economic organizations, including the Lebanese chambers of commerce, industry, and agriculture.  The Centre resolves domestic and international conflicts related to trade and investment.  Its statutes are similar to those of the International Chamber of Commerce (ICC) in Paris, and its conciliation and arbitration rules are modeled on those of the Paris ICC.  Judgments of foreign courts are enforced subject to the exequatur obtained.

Bankruptcy Regulations

Lebanon does not have a bankruptcy law.  However, the Commercial Code (Book No. 5, Articles 459-668) and the Penal Code govern insolvency and bankruptcy.  By law, a secured creditor has the right to a share of the assets of a bankrupt party.  Courts determine monetary values in contract cases according to the currency of the contract or its equivalent in Lebanese Pounds (LBP or Lebanese Lira) at the official conversion rate on the day of the payment.  Workers may resort to the Labor Court and the National Social Security Fund to recover pay and benefits from local and foreign firms that go bankrupt.  The law criminalizes fraudulent bankruptcy.

4. Industrial Policies

Investment Incentives

Lebanon’s Investment Law No. 360 encourages investment in information technology, telecom, media, tourism, industry, agriculture, and agro-industry.  The law divides the country into three investment zones, with different incentives in each zone.  These include facilitating permits for foreign labor and tax benefits, which range from a five-year, 50 percent reduction on income and dividend distribution taxes to a total exemption of these taxes for 10 years, starting from the date of operation (tied to the issuance of the first invoice).  Companies that list 40 percent of their shares on the Beirut Stock Exchange (BSE) are exempt from income tax for two years.  The Law also introduces tailored incentives through package deals for large investment projects, regardless of the project’s location.  These may include tax exemptions for up to 10 years, reductions on construction and work permit fees, and a total exemption on land registration fees.  IDAL exempts joint-stock companies that benefit from package deal incentives from the obligation to have a majority of a board of directors be Lebanese nationals (Law No. 771, dated November 2006).  Investors who seek to benefit from work permit incentives under package deals must hire two Lebanese for every foreigner and register them with the NSSF.  IDAL is working on several amendments to Investment Law 360 that would expand incentives to sectors, including ICT.  The government does not have a practice of issuing guarantees or jointly financing foreign direct investment projects.

Other laws and legislative decrees provide tax incentives and exemptions depending on the type of investment and its geographical location.  Industrial investments in rural areas benefit from tax exemptions of six or 10 years, depending on specific criteria (Law No. 27, dated July 19, 1980, Law No. 282, dated December 30, 1993, and Decree No. 127, dated September 16, 1983).  Exemptions are also available for investments in South Lebanon, Nabatiyeh, and the Bekaa Valley (Decree No. 3361, dated July, 2, 2000).  For example, new industrial establishments manufacturing new products benefit from a 10-year income tax exemption.  Factories currently based on the coast, which relocate to rural areas or areas in South Lebanon, Nabatiyeh, or the Bekaa Valley benefit from a six-year income tax exemption.  Parliament enacted a law in April 2014 to reduce income tax on industrial exports by 50 percent.  More information can be found on IDAL’s website at http://investinlebanon.gov.lb/en/doing_business/investment_incentives .

Domestic and foreign investors may benefit from a 4.5 percent subsidy on interest for new loans granted after January 1, 2012, for amounts up to USD 10 million per project (with a ceiling of USD 40 million) provided by banks, financial institutions, and leasing companies to industrial, agricultural, tourism, and information technology establishments.  The subsidy extends for a maximum of seven years, with a grace period of two years.  This program has been extended until the end of 2019.  Investors can also benefit from loan guarantees from Kafalat, a semi-private financial institution that helps SMEs to access subsidized commercial bank loans for projects in Lebanon, with a grace period of two years.

Domestic and foreign investors may also benefit from Central Bank subsidized loans covering housing, investment in productive sectors, energy efficiency and renewable energy, and financing projects.  In February 2017, the Central Bank authorized banks to increase their direct investment in technology start-ups up to four percent of equity, by providing banks with interest-free facilities over a maximum period of seven years.  The Central Bank continues, in cooperation with the EIB (Euro 50 million) and AFD (Agence Francaise de Developpement, French USAID counterpart) to subsidize loans for energy efficiency projects.

The government grants customs exemptions to industrial warehouses for export purposes.  Companies located in the Beirut Port or the Tripoli Port Free Zone benefit from customs exemptions and are exempt from the value-added tax (VAT) for export purposes.  They are also not required to register their employees with the NSSF, if they provide equal or better benefits.

As part of its mandate, IDAL also promotes and supports Lebanese exports, especially agriculture, agro-industry and industry, by providing assistance on export requirements and studies on potential new markets, supporting exporter participation in international fairs and exhibitions, as well as subsidizing export transportation costs.

Foreign Trade Zones/Free Ports/Trade Facilitation

Foreign-owned firms have the same investment opportunities as Lebanese firms.  Lebanon has one duty-free zone at Beirut-Rafik Hariri International Airport and two free trade zones, the Beirut Port and the Tripoli Port.  The WTO-compatible Customs Law issued by Decree No. 4461 fosters the development of free zones (Articles 242-261 cover free trade zones and Articles 262-266 cover duty free zones) and is available online at www.customs.gov.lb .  The government enacted Law No. 18, dated September 5, 2008, that established a Special Economic Zone (SEZ) in Tripoli to attract investment in trade, industry, services, storage, and other services, as well as to grant investors tax exemptions and offer other incentives such as relaxed allowances for foreign labor and unrestricted currency conversion.  On April 9, 2015, the Cabinet appointed a TSEZ Authority to regulate the zone, and efforts are actively underway to build and develop the zone.  The Authority is working with the International Finance Corporation (IFC) to create the regulatory framework and a one-stop-shop for businesses.  The TSEZ Authority has completed an interim licensing regime to grant licenses for logistics activities, and is working with the IFC towards a full-fledge licensing regime, expected to be ready by 2020.  The Master Plan awaits Cabinet approval.  The Cabinet has approved USD 15 million to build the first phase of infrastructure and has tasked the Council for Development and Reconstruction (CDR) to launch a tender in spring 2019.  The World Bank National Jobs Program has allocated USD 35 million for remaining infrastructure works.  On March 29, 2018, the Cabinet approved expanding the geographical area of the TSEZ to include an additional 75,000 square meters of the Rachid Karami Fair in Tripoli and to establish a knowledge-innovation center.  The Authority expects the TSEZ will begin logistics activities in early 2020.

Performance and Data Localization Requirements

The government mandates local employment, and the Ministry of Labor publishes annually a list of jobs restricted to Lebanese nationals.  Foreign and local participation on the board of directors is contingent upon the firm’s structure as defined in Lebanese commercial law.  Foreign investors enjoy the same incentives as local investors.

Foreigners doing business in Lebanon through a company, factory, or office must hold work and residency permits.  There are no discriminatory or excessively onerous visas, residence, or work permit requirements.  Registration with a chamber of commerce is required to import and handle a limited number of products that are subject to control requirements for safety reasons.  Products with such special import requirements constitute less than one percent of total tradable goods.  Registration with a chamber of commerce is required to ensure that established facilities meet safety, handling, and storage requirements.

Lebanon does not follow any forced localization policy and does not require foreign IT providers to turn over source code or provide access to surveillance.  Lebanon’s Central Bank requires all banks to keep data backups in Lebanon, while service providers are required to do the same.

5. Protection of Property Rights

Real Property

The right to private ownership is respected in Lebanon.  The concept of a mortgage exists and secured interests in property, both movable and real, are recognized and enforced.  Such security interests must be recorded in the Commercial Registry and the Real Estate Registry.  The Real Estate Law governs acquisition and disposition of all property rights by Lebanese nationals, while Law No. 296, dated April 3, 2001, governs real estate acquisition by non-Lebanese.  Over ten percent of land, mostly in rural and remote areas, does not have clear title.  The government is undertaking efforts to identify property owners and register land titles.

Intellectual Property Rights

While Lebanon is not a WTO member, its intellectual property rights (IPR) legislation is generally compliant with Trade-Related Intellectual Property Rights (TRIPS) standards.  IPR enforcement is weak.  The MoET’s Intellectual Property Protection Office (IPPO) has led efforts to improve the IPR regime, but suffers from limited financial resources, human capital and insufficient political support.  Lebanon’s Internal Security Forces (ISF) and Customs play roles in enforcement.  The understanding of IPR within the Lebanese judiciary has improved somewhat in recent years but gaps remain with regards to the negative economic impact that IPR violations have on the economy.  The MoET’s new draft laws and amendments to existing laws aimed at improving the IPR environment, notably for industrial design, trademark, geographical indications, as well as amendments to the copyright law, await parliamentary approval.

Existing IPR laws cover copyright, patent, trademarks, and geographical elements.  Lebanon’s 1999 Copyright Law largely complies with WTO regulations and needs only minor amendments to become fully compatible.  Copyright registration in Lebanon is not mandatory, and copyright protection is granted without the need for registration.  The MoET launched an online registration service in January 2013 for copyrights and trademarks on https://portal.economy.gov.lb/ .  This service simplified the registration process and now over 80 percent of registrations of trademarks and copyrights take place online.  Due to the complexity of copyrights and patents, registration is still accepted in person at the MoET, and payment must also take place in person.  The switch from a deposit system to an objection system for trademarks also remains stalled due to the need for parliamentary approval.  However, the MoET noted that it implements the objection system in practice.

Lebanon’s Parliament ratified the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty (WPPT) in February 2010.  Ratification documents have not yet been deposited with WIPO, since this would also require amendments to the Copyright Law.

A modern TRIPS-compatible Patent Law, approved in 2000, provides general protection for semiconductor chip layout designs and plant varieties.  Data protection and undisclosed information fall under Article 47 of the Patent Law, but current provisions for pharmaceutical registration are subject to interpretation.  Generic manufacturers in Lebanon are not prohibited from using original data (e.g., data published on the U.S. Food and Drug Administration website) to register competing products that are identical to original products.  Decree No. 571 on the conditions of registering, importing, marketing, and classifying pharmaceuticals, which should have improved the process of drug registration and reduced the number of copycat drugs being registered, still leaves some room for interpretation.  There are no current plans to amend the Patent Law.  On patent registrations, the Lebanese legal regime does not require examination for novelty, utility, and innovation.  A simple patent deposit is required at the MoET, where the application is examined only for conformity with general laws and ethics.

The Internal Security Force (ISF) Cybercrime and IP Unit under ISF’s Judicial Police directorate focuses its efforts on online counterfeiting and copyright violations, whereas the Money Laundering and Financial Crimes Unit investigates trademark violations associated with counterfeit physical goods.  Lebanese Customs makes efforts to combat smuggling and plays a direct role in IPR enforcement by seizing counterfeits.  The U.S. Trade Representative’s Special 301 annual review of intellectual property protection worldwide has retained Lebanon on its watch list since 2008.

The IPPO acts upon the requests of rights holders in an ex officio capacity.  The ISF cannot act in an ex officio capacity and still requires a criminal complaint to be filed with the prosecutor’s office in order to take action.  The sale and distribution of pirated, counterfeit, and copycat products continued across Lebanon in commercial establishments and through street vendors.  This included leather goods, apparel and luxury items, fast-moving consumer goods (FMCGs), software, optical media, and pharmaceuticals.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ 

6. Financial Sector

Capital Markets and Portfolio Investment

There are no restrictions on portfolio investment, and foreign investors may invest in Lebanese equities and fixed income certificates.  Lebanon does not restrict the movement of capital into or out of the country for investment or other purposes.  The government permits the free exchange of currencies, precious metals, and monetary instruments, both domestically and internationally.  There are no restrictions on outbound payments and transfers for current international transactions.  Money transfer services such as Western Union and MoneyGram must now disburse inbound transfers in local currency. The Banking Control Commission of Lebanon (BCCL) has a department which oversees and conducts on-site and off-site audits of money exchange institutions and electronic money transfer firms operating in Lebanon using a risk-based supervision approach.

Credit is allocated on market terms, and foreign investors may obtain credit facilities on the local market.  The private sector may access overdrafts and discounted treasury bills in addition to a variety of credit instruments, such as housing, consumer, or personal loans, as well as corporate and loans for SMEs.

Government legislation allows the listing of tradable stocks on the Beirut Stock Exchange (BSE).  By regulation, an investor should inform the BSE when her/his portfolio of shares in any listed company reaches ten percent and five percent in any listed bank.  For an investor to acquire over five percent of shares of any listed bank requires prior approval from the Central Bank.  Currently, the BSE lists six commercial banks, four companies including Solidere – one of the largest publicly held companies in the region, and 10 sovereign Eurobond issues (all in U.S. Dollars).  However, the BSE suffers from a lack of liquidity and low trading volumes in the absence of significant institutional and foreign investors and had an annual trading volume of only 6.55 percent of market capitalization in 2018.  Weak market turnover discourages investors from committing funds to the market and discourages issuers from seeking listings on the BSE.

Traditional businesses held by commercially powerful families dominate most sectors.  The government is trying to improve the transparency of such firms to help solidify an emerging capital market for company shares.  The Cabinet approved in September 2017 a decree to establish the Beirut Stock Exchange SAL (BSE SAL) as a joint-stock company that will replace the current BSE.  Initially, the Lebanese state will own the capital of BSE SAL and will privatize the company within one year.  The delay in the process has triggered the CMA to issue in January 2019 a Request for Proposal (RFP) for an electronic trading platform that will allow trading in products not traded in the BSE, such as foreign currencies, commodities, and listed SMEs and start-ups. To date, nine companies have collected the RFP and the deadline for submitting bid offers is by the end of May 2019.  More information can be found on: www.cma.gov.lb/.  Lebanon hosts the headquarters of the Arab Stock Exchanges.

Money and Banking System

The Lebanese banking sector covers the entire country with 1,081 operating commercial and investment bank branches as of December 2018.  There are 4,526 residents per branch in Lebanon (assuming five million inhabitants), which compares favorably to regional and emerging markets.  According to World Bank Development indicators, there are 619 depositors with commercial banks per 1,000 adults, 234 borrowers from commercial banks per 1,000 adults, and 41 ATMs per 100,000 adults.  The use of cryptocurrencies is prohibited in Lebanon by the Central Bank.  The Central Bank announced that it is developing a digital currency that it plans to issue in Lebanese Pounds and for domestic use only.

The banking system enjoys high financial standing and boasts a capital adequacy ratio of 16.6 percent as of September 2018 (higher than Basel III requirements), sound liquidity, and a foreign currency prime liquidity ratio exceeding 58 percent of foreign currency deposits.  The total assets of Lebanon’s five largest commercial banks (including their subsidiaries) reached approximately USD 159 billion as of the end of 2018.  Their total domestic assets reached approximately USD 129 billion as of the end of 2018 (or about 51.83 percent of total banking assets), according to Central Bank data.

Based on the Central Bank’s Circular 331, Lebanon has developed a venture capital sector with several venture capital funds that are investing in the knowledge economy start-ups in Lebanon.

Lebanon’s Central Bank imposes strict compliance with regulations on banks and financial institutions, and commercial banks maintain strong relations with U.S. correspondent banks.  Foreign banks and branches need the Central Bank’s approval to establish operations in Lebanon.  Moreover, any shareholder with more than five percent of a bank’s share capital must obtain prior approval from the Central Bank to acquire additional shares in that bank, and must inform the Central Bank when selling shares.  In addition, any shareholder needs to obtain prior approval from the Central bank if he/she wants to become a board member.  There are no restrictions in Lebanon on a foreigner or non-resident’s ability to open a bank account in local currency or foreign currencies provided they abide by Lebanese compliance rules and regulations.  Banks claim they have stringent inquiry mechanisms to ensure compliance with international and domestic regulations and implement Lebanon’s anti-money laundering and combating terrorism financing laws.  Banks inform customers of Know-Your-Customer requirements and ask them about the purpose of opening new accounts and about the sources of funds to be deposited.  Lebanese banks note they are compliant with the Foreign Account Tax Compliance Act (FATCA).  Lebanon has adopted the OECD Common Reporting Standards starting January 1, 2018.

Foreign Exchange and Remittances

Foreign Exchange

There are no restrictions on the movement of capital, capital gains, remittances, dividends, or the inflow and outflow of funds.  The conversion of foreign currencies or precious metals is unfettered.  Foreign currencies are widely available and may be purchased from commercial banks or money dealers at market rates.  Lebanon’s Central Bank posts a daily local currency-exchange rate on its website:  http://www.bdl.gov.lb/ .  On average, the Central Bank has the local currency at LBP 1,507.5 per U.S. Dollar since 1999.  However, the U.S. Dollar continues to trade on the local economy at LBP 1,500.  The Central Bank is committed to maintaining a stable currency.  Lebanon has one of the most heavily dollarized economies in the world, and businesses commonly accept payment (and return change) in a combination of LBP and U.S. Dollars.

Remittance Policies

There are no delays in remitting investment returns except for standard times needed to execute bank transfers.  In case investment returns are placed in term-deposit accounts, banks respect maturities for conversion and/or transfer purposes in accordance with international norms.

Sovereign Wealth Funds

Lebanon does not have a sovereign wealth fund.  Lebanon’s Offshore Petroleum Resource Law states that proceeds generated from oil and gas exploration must be deposited in a sovereign wealth fund.  Creating the fund requires a separate law, which the government has yet to adopt.  Lebanon currently receives no proceeds from natural resources that could flow into a sovereign wealth fund.

7. State-Owned Enterprises

The Lebanese government maintains several state-owned monopolies.  Ogero owns and operates fixed line telecommunications, while Alpha and Touch operate the mobile networks under contract to the Ministry of Telecommunications.  Electricité du Liban (EdL) provides nation-wide electricity production and transmission, and four regional authorities provide water service.  La Régie des Tabacs et Tombacs conducts tobacco procurement, manufacturing, and sales, and Casino du Liban operates as a mixed public-private enterprise.  The Central Bank owns 99.23 percent of the flag air carrier Middle East Airlines, whose monopoly is scheduled to end in 2024.  Other major state-owned enterprises or public institutions include the Beirut, Tripoli, Sidon, and Tyre ports, the Rashid Karami International Fair (in northern Lebanon), the Sport City Center, and real estate development institution Elyssar.  The government also owns shares in Intra Investment Co., a mixed public-private investment company that owns 96.62 percent of Finance Bank, a Lebanese commercial bank.

There is no uniform definition of state-owned enterprises (SOEs), and each has separate internal by-laws.  Decree 4517 (dated 1972) establishes two types of public institutions, one administrative category that involves public enterprises such as the Lebanese University, and a second that holds commercial institutions such as EdL and La Régie.  The Ministry of Finance maintains an unpublished list of SOEs and public institutions.  SOEs and public institutions may purchase or supply goods or services from the private sector or foreign firms.  Their procurement process is governed by separate regulations but under the same terms and conditions as public procurement.  SOEs and public institutions benefit from certain tax exemptions.

The electricity monopoly restricts production to EdL, but numerous private investors operate unregulated generators across the country and sell electricity to citizens at significantly higher rates during the country’s frequent power cuts.  EdL awarded several concessions to privately-owned companies for power distribution in specific regions, and these companies are interested in meeting customer demand.  Independent Power Producers (IPP) may provide municipalities with 10 MW of electricity without receiving a direct concession from EdL.  In April 2014, Parliament granted the Cabinet the authority through 2018 to license private companies to generate electricity (Law 288).  On April 17, 2019, Parliament extended Law 288 and granted the Public Tender Office authority to oversee electricity contracts as part of the government’s electricity sector reform.  Law 462 of 2002 called for the corporatization and privatization of the electricity sector, and the creation of an electricity regulatory authority (ERA).  However, as implementation of the privatization law stalled, Law 288 delegated issuance of production permits and licenses for new electricity projects from ERA to the Lebanese government.  Since 2012, EdL has contracted three private companies to manage bill collection, maintenance, and power distribution.

Lebanon’s SOEs report to shareholders, whereas public institutions are subject to oversight by the concerned ministries as well as by the Ministry of Finance.  Public institutions require the approval of concerned ministries for major business decisions.  SOEs may independently prepare their budgets, which must be approved only by their board of directors.  The SOEs and public institutions are required by law to publish an annual report, submit their books for independent audits, and transmit their books to the Court of Audit.

The Lebanese government currently has no plans to privatize SOEs or public institutions.  The Governor of the Central Bank plans to list 25 percent of Middle East Airlines (which is 99.23 percent owned by the Central Bank) on the BSE.

SOEs and public institutions have independent boards staffed primarily by politically-affiliated individuals, appointed by the cabinet for public institutions, and by shareholders for SOEs.  These boards always include a cabinet-appointed Government Commissioner who reports to the concerned ministries.  SOEs do not currently adhere to the Organisation for Economic and Co-operative Development (OECD) Corporate Governance Guidelines.

Privatization Program

Lebanon enacted laws for the privatization of the telecom sector (Law 431) and the electricity sector (Law 462) enacted in 2002.  However, political dysfunction has since stalled their implementation.

Parliament passed a two-year law authorizing the Cabinet to issue Independent Power Producers (IPP) licenses to investors in April 2014.  It later amended the law to extend its application through April 2018.  On April 17, 2019, Parliament passed a new law extending the application of Law 288 through April 2021, granting the Tender Office authority to tender IPP projects.  The Ministry of Energy and Water launched tenders in March 2017 for solar power plants under the IPP law and has issued three wind power plants licenses under IPP.

The High Council for Privatization and Partnerships (HCP) manages privatization and public-private sector partnership (PPP) projects.  In accordance with the provisions of the Privatization Law 228 and the PPP Law 48, the HCP conducts competitive tendering processes for both privatization and PPP projects.  The PPP law introduced a legal framework to attract local and international private investments in infrastructure projects.  The PPP legislation is published on the HCP website http://hcp.gov.lb .

The Capital Markets Law calls for the corporatization and subsequent privatization of the Beirut Stock Exchange (BSE) within a two-year period from the date that the Capital Markets Authority (CMA) is appointed.  The Cabinet appointed the CMA in June 2012, and in September 2017 issued a decree to corporatize the BSE.  The corporatization has yet to occur.

8. Responsible Business Conduct

Lebanese firms are aware of corporate social responsibility (CSR) and responsible business conduct (RBC), including on environmental, social, and governance issues.  This is true for the banking sector as well as companies in industry, which are slowly creating sustainable supply chains or pursuing social initiatives to appeal to consumers.  The Lebanese Standards Institution (LIBNOR), part of the Ministry of Industry, strives to expand the use of the ISO 26000 standard on Social Responsibility (SR) in Lebanon, one of the eight pilot countries in the Middle East.  However, laws related to human and labor rights, consumer protection, and environment protections are unevenly enforced.

The Central Bank of Lebanon works closely with banks to direct their financial resources towards projects that improve society and the environment.  This includes issuing circulars to create favorable environmental and educational loans, encourage entrepreneurship through private equity investments, and facilitating improved governance through customer protection.  In 2015, the banking sector started to implement Central Bank Circular No. 134, requiring banks to apply measures to ensure transparent and fair dealings with their customers, a reflection of the CSR principles of corporate governance and consumer protection.  The Central Bank also established the Institute for Finance and Governance (IFG).  Some Lebanese banks attempt to align their business plans and CSR policy with the UN Sustainable Development Goals.  Several banks issue their own annual CSR reports.

The government does not require or encourage private companies to establish internal codes of conduct.  However, several companies have adopted a Code of Ethics and corporate governance codes, including the business association ‘Rassemblement de Dirigeants et Chefs d’Entreprises Libanais’ (RDCL, or the Group of Lebanese Business Owners) Code of Business Ethics, and the Lebanese Code of Corporate Governance (CG), which is under the auspices of the Lebanese Transparency Association (LTA).  However, these codes are strictly voluntary and the government provides no incentives or enforcement for their adoption.

9. Corruption

U.S. firms have identified corruption as an obstacle to FDI, including in government procurement, award of contracts, dispute resolution, customs and taxation.  Corruption is reportedly more pervasive in government contracts (primarily in procurement and public works), taxation, and real estate registration, than in private sector transactions.  The government launched in April 2018 a National Anti-Corruption Strategy and Lebanese law provides criminal penalties for official corruption, but they are not implemented effectively.  For instance, Lebanon does not effectively enforce the Illicit Wealth Law and the Penal Code.  The Illicit Wealth Law applies to all state employees, government and senior officials, and municipality members and extends to family members.  The law does not extend to political parties.  The legislation has articles to counter conflict-of interest in awarding contracts and government procurement, but they are not enforced.

Lebanon ratified the UN Anticorruption Convention in April 2009.  Lebanon is not a signatory to the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.

As for civil society, the Lebanese Transparency Association (LTA) is one of the leading partners in the creation of a National Coalition for Integrity that will include Members of Parliament, the private sector, and civil society.  Its primary purpose will be to advocate for the implementation of the 2018 National Anti-Corruption Strategy.  The LTA also established the Lebanese Advocacy and Legal Advice Center (LALAC) to inform citizens of their rights and to encourage victims and witnesses to take action against cases of corruption.  LALAC operates a hotline for victims and witnesses to report cases of corruption and receive free legal advice and assistance with their case.  The program is currently funded by Transparency International (TI) and the German Foreign Office.  LTA also conducted several workshops targeting public servants, investigative journalists, and civil society groups promoting access to information right in Lebanon.

Local NGO Sakker el Dekkene was established in 2013 to raise awareness against corruption though its innovative and interactive advertisement campaigns.  It also encourages citizens to report and talk about their own experiences with corruption.  Additional information may be found at https://www.sakkera.com .

Resources to Report Corruption

Lebanese Transparency Association
Sami El Solh Avenue, Kaloot Bldg, 9th Floor
Badaro, Beirut
P.O. Box 50-552, Lebanon
Tel/Fax: +961-1-388113/4/5
Cell: 70-035777
Email: info@transparency-lebanon.org

10. Political and Security Environment

Designated Foreign Terrorist Organization (FTO) Hizballah continued fighting in Syria on behalf of the Assad regime, while some Lebanese Sunni individuals reportedly lent support to the Syrian opposition.

Lebanon continues to host more refuges per capita than any other country in the world.  The refugee presence led to increased social tensions and competition for low-skill jobs, strained infrastructure and the provision of public services, and caused significant economic impacts.

The U.S. government considers the potential threat to U.S. Embassy personnel assigned to Beirut sufficiently serious enough to require all official personnel to live and work under security restrictions.  These limitations occasionally prevent the movement of U.S. Embassy officials and the provision of consular services in certain areas of the country.  U.S. citizen visitors are encouraged to contact the Embassy’s Consular Section for the most recent safety and security information concerning travel to Lebanon.  More information may be found at https://lb.usembassy.gov/u-s-citizen-services

11. Labor Policies and Practices

The 1946 Labor Law provides for written and oral contracts and specifies a maximum workweek of 48 hours (with several exceptions, notably agricultural and domestic workers, whom are not covered under the Labor Law).  The legal minimum wage was raised in 2012 to 675,000 LBP (USD 450) per month.  Lebanon is a member of the International Labor Organization (ILO) and signatory to all of its fundamental conventions except on the Freedom of Association and Protection of the Right to Organize.  The government mandates local employment, and the Ministry of Labor issues an annual list of jobs restricted to Lebanese.  Local unskilled labor is in short supply.  Arab (mainly Syrians, Egyptians, and Palestinian), Asian, Indian, and African laborers are hired to work in construction, agriculture, industry, and households.

The law provides for the right of private sector workers to form and join trade unions, strike, and bargain collectively, although the law places a number of restrictions on these rights.  It provides protection against anti-union discrimination but enforcement is weak and anecdotal evidence suggests anti-union discrimination was widespread.  Lebanon has a government-recognized General Labor Confederation (CGTL), whose membership is limited exclusively to Lebanese workers.  The CGTL’s activities are mainly limited to demanding cost-of-living increases and other social benefits for workers.  The general labor-management relationship remains difficult and the Labor Law is not always properly enforced.  Strikes and demonstrations are not uncommon, and are usually aimed at pressuring the government for better employment conditions.  However, this has never posed a major risk to investment.  The law requires businesses to adhere to safety standards, but enforcement is weak.

Lebanon’s labor force (aged 15 and above) totals 2.2 million in 2017, including foreign residents but excluding the seasonal work force, according to the World Bank.  The IMF estimates the population at 4.5 million in 2017.  There are no official statistics on unemployment.  The Lebanese government estimated the unemployment rate at 25 percent in 2017, and the World Bank estimated unemployment at 34 percent for youth under 35 years of age.  The Minister of Economy and Trade publicly noted that there was competition between Lebanese and Syrian labor for low to high skilled jobs and also at the level of micro to small enterprises.  There was widespread anecdotal evidence of arbitrary dismissals of Lebanese, being replaced by non-Lebanese, across economic and productive sectors.  This has mainly been in the form of Syrian refugees allegedly replacing Lebanese in some sectors.  However, there were no official statistics to quantify the scale of these dismissals.

Emerging Issues

Launched in 2017, the Central Bank’s Financial Inclusion Strategy aims at promoting affordable, timely, and adequate access to regulated financial products and services to all segments of the population, while supporting UN Sustainable Development Goals. It also focuses on promoting financial literacy, and financial consumer protection.  More information can be found on http://www.bdl.gov.lb/news/more/8/236/251 

12. OPIC and Other Investment Insurance Programs

In 1981, Lebanon and the United States signed an Overseas Private Investment Corporation (OPIC) agreement, which become operational in 1996.  OPIC is currently active in Lebanon in insurance, financing, and investment.  To date, OPIC has provided over USD 300 million in credit line guarantees.

The Lebanese government’s National Investments Guarantee Corporation (NIGC) continues to insure new investments against political risks, riots, losses due to non-convertibility of currencies, and transfer of profits.  Lebanon has been a member of the Multilateral Investment Guarantee Agency (MIGA), part of the World Bank, since 1994.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount  
Host Country Gross Domestic Product (GDP) ($M USD)* 2017 $53,400 2018 $56,700 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data 
Foreign Direct Investment Host Country Statistical Source** USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions)** 2017 $26.1 2017 $448 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data 
Host country’s FDI in the United States ($M USD, stock positions)** 2017 $0 2017 $17 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data 
Total inbound stock of FDI as % host GDP N/A N/A 2017 118.1% UNCTAD data available at https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Country-Fact-Sheets.aspx 

* Source for Host Country Data:
* The Lebanese Central Administration of Statistics (CAS).
** The Central Bank compiles FDI statistics without geographical breakdown. Accordingly, the inward/outward FDI positions from/to the U.S. are considered as partial figures and resulting from the Coordinated Direct Investment Survey (CDIS) addressed to banking, financial, and insurance sectors. FDI data for 2018 is not yet available.


Table 3: Sources and Destination of FDI

Direct Investment From/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward $2,522 100% Total Outward $5,970 100%
Luxembourg $716 28.4 Turkey $1,495 25%
United Arab Emirates $345 13.7% France $914 15.3%
France $287 11.4% Egypt $829 13.9%
Libya $197 7.8% Jordan $433 7.2%
Qatar $178 7.1% Luxembourg $423 7.1%

Source: BdL (statistical data sources include International Transactions Reporting System-Public and private sectors, and Ministry of Finance Land Registry Directorate); IMF Coordinated Direct Investment Survey, December 2017


Table 4: Sources of Portfolio Investment

Portfolio Investment Assets
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries $3,823 100% All Countries $1,818 100% All Countries $2,005 100%
United States $1,256 32.9% United States $616 33.9% United States $640 31.9%
France $392 10.3% France $197 10.8% United Kingdom $291 14.5%
United Kingdom $362 9.5% Luxembourg $173 9.5% South Africa $208 10.4%
South Africa $212 5.5% Bahrain $123 6.8% France $195 9.7%
Luxembourg $198 5.2% Switzerland $122 6.7% United Arab Emirates $78 3.9%

Source: BdL; IMF Coordinated Direct Investment Survey, September 2018.

14. Contact for More Information

U.S. Embassy in Lebanon
Economic Section
Aoukar, P.O. Box 70-840, Antelias, Lebanon
Tel: +961- 4-542600
Email: Beirutembassyinvestment@state.gov

2019 Investment Climate Statements: Lebanon
Build a Custom Report

01 / Select A Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future