Business in Lebanon

Aired April 2005

Centrally located on the eastern Mediterranean coast, Lebanon has 7,000-year history as a trading hub linking Europe, Africa and the Middle East. Its sophisticated capital city, Beirut, is a melting pot of cultures that has long been known for its lively cultural scene and vibrant business sector.

For investors, Lebanon offers a strategic location, a business-friendly environment, free movement of capital and foreign exchange, a highly skilled and multilingual workforce, a business sector that welcomes international partnerships, and excellent quality of life. Numerous investment incentives include tax exemptions on income and profits as well as reduced fees concerning work and residency permits.

Tourism and related services, property development and construction, agriculture and related activities, information technology and telecommunications are sectors with particularly strong growth potential.

Since war ended in 1992 Lebanon has been experiencing extremely rapid development and is well on its way to once again serving as a major international hub for the eastern Mediterranean and beyond. Now is the time to explore investment opportunities in dynamic Lebanon.

FINANCE

The Lebanese financial sector includes the Banking Control Commission, the Central Bank, the Lebanese Banking Association, credit institutions and international banks. Lebanon’s Central Bank is the financial sector’s leading institution, responsible for maintaining stability and implementing monetary policy. It regulates the domestic banking industry, issues currency, stabilizes the Lebanese Lira, tries to curb inflation and advises the government.

Lebanon’s banking sector is known for its openness, and has attracted extensive international investment in both onshore and offshore activities. The sector currently includes 52 commercial banks (of which 10 are foreign), 8 investment banks and 18 representative offices of foreign banks, a relatively high percentage of foreign activity for such a small country. Lebanon also offers the strongest bank secrecy laws in the region, one reason it has been chosen as a business base by a number of international companies.

Lebanon’s banking sector has a history of close collaboration with the government and has strongly supported the country’s reconstruction efforts. Lebanese banks hold 68 percent of outstanding treasury bills, and the generous agreement among the banks to take on $4 billion in no-interest Eurobonds has greatly assisted the government in its efforts to balance the budget.

The US dollar is by far the preferred currency in the Lebanese banking sector, with only around 25 percent of banking activities conducted in the local currency, the Lebanese lira. Lebanese banks are fully protected against foreign-exchange risks and are also highly liquid compared to banks in other developing economies.

Lebanon’s insurance sector has seen strong growth in recent years and is much more developed than those of other countries in the region.

The sector can provide world-class services to US companies operating in Lebanon or anywhere in the Middle East.

INFRASTRUCTURE

Over the past 15 years, Lebanon has invested heavily in rebuilding and upgrading it’s infrastructure and central districts. Both leisure and business visitors alike will find that Lebanon has adopted international standards and is poised for continued growth.

A number of major construction projects have been undertaken in Lebanon since the end of the war and include Saifi Village, Sannine Zenith, the development of the Byblos area and Solidere, the most ambitious reconstruction project ever undertaken in the region.The Solidere project involves the complete reconstruction of Beirut’s financial district using state-of-the-art technology.

TOURISM

Lebanon is a natural for tourism development thanks to its sophisticated culture, friendly population, great natural beauty, attractive climate, historic landmarks and varied landscapes that allow the visitor to travel from high mountains to beautiful beaches in the same day. Additional attractions include a cuisine considered one of the most varied and sophisticated in the world, fine wines, vibrant nightlife, exceptional shopping, excellent business facilities, and a number of luxury hotels, such as new Four Seasons and Hilton properties.

The tourism sector offers high-potential opportunities for investors.

MADE IN LEBANON

Lebanese industry is dominated by small and medium-sized companies, most of them family-owned, and many of these firms represent excellent opportunities for foreign investors looking to profit from Lebanon’s well established trade infrastructure and strong development potential.

IT &TELECOM

Thanks to its well educated and multilingual population and long tradition of entrepreneurship, Lebanon has been able to develop a strong information technology sector with a fast-growing software industry. The Investment Development Authority of Lebanon is promoting the establishment of the Beirut Emerging Technology Zone (BETZ), a comprehensive technology park designed to attract new investors and create more IT jobs. BETZ offers a number of advantages for US information technology companies wishing to establish a base in the region through partnering with a local company.

LUXURY GOODS

Beirut has been recognized throughout the years as being the trend setter of the Middle East. In fact, its key Mediterranean location near to Europe, North Africa and the Orient has made this country inevitable to a unique variety of flavors, cultures and trends. Even prior to the war, Beirut was renown to have many faces such as the Switzerland of the middle east for its dynamic finance and banking sectors and Paris of the Orient for its inclination toward fashion, clever craftsmanship, jewelry, trade and trend setting for the region.

Beirut was indeed a hub for leisure and travel with dynamic nightlife, casinos, shows and of course as an altogether fashionable destination.

Today, after years of war, One of Lebanon’s prosperity is the success in the local market of luxury goods made in Lebanon. The fashion scene is particularly lively, and Lebanese designer Elie Saab has made his mark internationally known, creating designs for high profile clients such as Halle Berry and Catherine Zeta Jones. In 2004, Elie Saab creations are seen in most important American fashion magazines and worn by fashion icons to events such as the Oscars.

The other remarkably lively industry would be the Lebanese jewelry scene. Tabbah jewelry, for instance, which has been designing for over 100 years has been able to brand high end oriental and european styled creations through exclusive designs, innovative techniques, creativity and the finest quality and materials. Jewelry happens to be one of Lebanon s largest exports to the Arab, European and American world.

Nowadays Beirut is filled with exquisite local designers and the downtown area reflects this in beautifully ornamented boutiques, shops and people! The jewelry industry is in full bloom and is one of the most exciting and stable sectors of the Lebanese economy. Jewelry creation and production ranges from ethnic Phoenician styles to elegant designs that reflect the European standards and tradition of prestigious jewelry creations.

The jewelry is continuing to peak great interest and is expanding internationally. Producers of luxury goods will find a ready market in Lebanon.