Líban: Invertir al Líban
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 World Investment Report 2023 published by UNCTAD, FDI inflows were estimated at USD 458 million in 2022, down by 24.3% compared to one year earlier. Meanwhile, the stock of FDI stood at USD 70.5 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 years, Lebanon has been hit by a series of shocks: an economic and financial crisis, followed by the COVID-19 pandemic, a political crisis, the explosion at the port of Beirut, and more recently the escalation in the attacks between Hezbollah and Israel. The unprecedented economic crisis has had large and persistent negative impacts that continued affecting the country, deterring FDI. Historically, the main foreign investors in Lebanon are France, the U.S., 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).
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 98% 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 154th out of 184 countries in the 2023 Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | 1,607 | 605 | 458 |
FDI Stock (million USD) | 69,477 | 70,083 | 70,540 |
Number of Greenfield Investments* | 4 | 1 | 5 |
Value of Greenfield Investments (million USD) | 28 | 0 | 12 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Lebanon | Middle East & North Africa | United States | Germany |
Index of Transaction Transparency* | 9.0 | 6.4 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 1.0 | 4.8 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 5.0 | 4.7 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
With its liberal economy, Lebanon has attracted foreign investors for many years. Advantages for FDI in Lebanon include:
Disadvantages for FDI in Lebanon:
Vols fer algun comentari sobre aquest contingut? Escriu-nos.
© eexpand, Tots els drets reservats.
Actualitzacions: July 2024