Lebanon - Country Commercial Guide
Market Challenges

Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.

Last published date: 2022-07-26

Lebanon has the legal underpinnings of a free-market economy, a highly educated labor force, and limited restrictions on investors.  But Lebanon’s economic crisis, which is likely to be long and painful, represents a huge market challenge.  Insolvent banks have banned most overseas transfers, meaning that U.S. and other international firms cannot transfer any profits earned overseas.  Many U.S. companies have complained about millions of dollars’ worth of deposits – which are impaired and unrecoverable in their current form – stuck in the local financial system.  A lack of hard currency means that contracts once paid in U.S. dollars are now fulfilled in a devalued and volatile local currency.  The local currency’s continued depreciation has resulted in a year-on-year increase in inflation of 240 percent, which has hurt consumers and driven an increasing number of Lebanese below the poverty line.  Businesses have been forced to close or change prices on a near daily basis to keep up with the fluctuating currency.  Recovery can only be accelerated through quick but careful implementation of reforms.  The potential for social unrest in the wake of this crisis remains high.

Corruption and a lack of transparency have continued to cause frustration among local and foreign businesses.  According to the 2021Transparency International’s Corruption Perception Index (CPI), Lebanon ranked 154 of 180 countries worldwide, making Lebanon among the 50 most corrupt countries in the world.  Foreign and local companies have complained about numerous impediments, namely institutionalized corruption, bureaucratic over-regulation, arbitrary licensing, complex customs procedures, outdated legislation, an ineffectual judicial system, poor telecommunication services, slow internet speeds, poor electricity provision, inconsistent interpretation of laws, and inadequate protection of intellectual property.  Lebanon also has fragmented and opaque tendering and procurement processes, which has deterred foreign investment. 

Lebanon adheres to the Arab League Boycott of Israel.  The Arab League’s Central Boycott Office maintains a blacklist of firms that are believed to contribute to Israel’s military or economic development.  As of July 2022, the U.S. Embassy in Beirut is not aware of any U.S. firms on this list.  As per U.S anti-boycott regulations, U.S. companies must refrain from certifying that their products do not come from Israel.  If there appears to be any request that might be in support of boycotts, companies should contact the Bureau of Industrial Security (BIS) at the U.S. Department of Commerce.  Finally, international companies should be mindful about sanctioned individuals and entities when conducting business in Lebanon.