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Foreign Investment Structure

Lebanon’s legal framework and investor-friendly public policies have played an important role in maintaining investors’ confidence in the local economy. Lebanon’s highly skilled multilingual and cost competitive labor force, in addition to the country’s liberal policies have been instrumental in keeping Lebanon on the radar of investors looking to serve the local and regional markets.

In 2015, despite regional imbalances challenging situation, around 44 foreign investment projects and foreign partnerships were announced, a number slightly higher than 2014 figures. 

European companies were the main investors in Lebanon, accounting for more than 48% of the foreign companies in 2015. The three main European countries are France with 9%, UK with 9% and Italy 4.5% of total foreign companies respectively. 

Arab investors’ share of foreign companies in Lebanon increased in 2015 to reach 32% from the total investors, with the UAE remaining the leader with 22.7% of total foreign companies, followed by Jordan with 4.5% of the total foreign investments in Lebanon. 

 

DISTRIBUTION OF FOREIGN COMPANIES BY COUNTRY OF ORIGIN (%share|2015) Distribution of Foreign Companies by Country of Origin (%share|2015)

Source: Ministry of Economy & Trade, ANIMA Investment Network, fDi Intelligence

 

In terms of distribution by sector, More than 68% of these investment projects were made in the Services, Trade / Retail, and Industry sectors. The Lebanese economy, traditionally service-driven has attracted around 34% of total direct foreign investments in the services sector in 2015 compared to 26% in 2014. More specifically 4companies operating in the financial sector opened either a branch or representative office in Lebanon. These investments reflects the confidence of foreign investors in the Lebanese financial sector that remains strong due to Central Bank policy of maintaining high foreign currency reserves that cover almost 80% of local currency money supplies, as well as stable prices and a favorable interest rates.

Moreover, 3 airlines companies opened Rep offices to accommodate for the growing number of Lebanese as well as the Syrian passengers located in Lebanon.

A trend worth noting is the increase in investments in the Information Technology (software development) accounting for around 7% of total foreign projects, a 2% increase from 2014 figures. 

 

DISTRIBUTION OF FOREIGN COMPANIES IN LEBANON BY SECTOR OF ACTIVITY (2015)Distribution of Foreign Companies in Lebanon by Sector of Activity (2015)

Source: Ministry of Economy & Trade, ANIMA Investment Network, fDi Intelligence


In addition to including the traditional components of FDI from equity capital to re-invested earnings UNCTAD specifies that real estate investments of a private, non-business nature covering recreational facilities, vacation homes and residences owned by non-residents for personal use or leased to others should, in principle, be included in foreign direct investment.

In Lebanon, the real estate sector has always been one of key attractive sector for foreigners. Despite the relative slowdown in the real estate market due to the internal and regional situation, prices remained stable. Arab investors have remained committed to maintaining businesses in Lebanon despite hard conditions prevailing in the country, with the real-estate sector in particular staying noticeably active.

According to statistics of the General Directorate of Real Estate Affairs, the value of real estate transactions by foreigners in 2015 reached around USD 546.13 million and distributed among 5 main districts.

Beirut grasped the lion share (49.16%) of total real estate acquisitions by foreigners in Lebanon. Arab nationals renowned for their consistent demand for luxurious spacious flats in Lebanon. Those apartments 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 (2015)Distribution of Foreign Investments in the Real Estate Sector in Lebanon by District (2015)

Source: General Directorate of Real Estate Affairs


It is worth noting that the value of sales to foreigners, after two consecutive years of decline, has increased by 10.3% from 2014 levels.

 

 

EVOLUTION OF REAL ESTATE ACQUISITIONS BY FOREIGNERS IN LEBANON (million USD)Evolution of Real Estate Acquisitions by Foreigners in Lebanon (in Million USD)

Source: General Directorate of Real Estate Affairs


As for the distribution of the real estate acquisitions by foreign nationalities, Syrian has seized the largest portion of real estate acquisitions in 2015 (14.87%). The presence of Syrian in Lebanon (around 1.1Million registered refugees by UNHCR) explains this high share of acquisition. Saudi Arabia came second with 13.62% of total real estate acquisitions. 

 

DISTRIBUTION OF REAL ESTATE ACQUISITIONS BY FOREIGNERS IN LEBANON (%share|2015)

Distribution of Real Estate Acquisitions by Foreigners in Lebanon (%share|2015)

Source: General Directorate of Real Estate Affairs

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