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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.

 

DISTRIBUTION OF FOREIGN COMPANIES IN LEBANON BY SECTOR OF ACTIVITY (% Share|2017)DISTRIBUTION OF FOREIGN COMPANIES IN LEBANON BY SECTOR OF ACTIVITY (% Share l 2017) 

Source:  fDi Markets, IDAL’s Calculations

 

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.

 

DISTRIBUTION OF FOREIGN COMPANIES IN LEBANON BY COUNTRY OF ORIGIN (% Share|2017)DISTRIBUTION OF FOREIGN COMPANIES IN LEBANON BY COUNTRY OF ORIGIN (% Share | 2017) 

Source:  fDi Markets, IDAL’s Calculations

 

In a further boost to the economy, foreign investor appetite has returned to the real estate market. According to statistics of the General Directorate of Real Estate Affairs, the value of real-estate transactions by foreigners increased by 11% reaching  USD 614 million in 2017.

 

EVOLUTION OF REAL ESTATE ACQUISITIONS BY FOREIGNERS IN LEBANON (USD Million|2017)EVOLUTION OF REAL ESTATE ACQUISITIONS BY FOREIGNERS IN LEBANON (USD Million | 2017) 

Source: General Directorate of Real Estate

 

Beirut grabbed the lion share with 46.84% of total real estate acquisitions by foreigners in Lebanon. Arab nationals renowned for their consistent demand for luxurious spacious flats which are usually above 220 square meters and are very well located mainly in Beirut.

 

DISTRIBUTION OF FOREIGN INVESTMENTS IN THE REAL ESTATE SECTOR IN LEBANON BY DISTRICT (% Share|2017)DISTRIBUTION OF FOREIGN INVESTMENTS IN THE REAL ESTATE SECTOR IN LEBANON BY DISTRICT (% Share l 2017) 

Source: General Directorate of Real Estate

 

As for the distribution of real estate acquisitions by foreign nationalities, Saudis seized the largest portion of real estate acquisitions in 2017 (18.3%). The real estate market remained attractive to Saudi investors unaffected by the political crisis with the Kingdom. Syria came second with 13.9% of total real estate acquisitions.

 

DISTRIBUTION OF REAL ESTATE ACQUISITIONS BY FOREIGNERS IN LEBANON (% Share|2017)DISTRIBUTION OF REAL ESTATE ACQUISITIONS BY FOREIGNERS IN LEBANON (% Share l 2017) 

Source: General Directorate of Real Estate

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