Here is a comparative analysis of potential investments, foreign direct investment (FDI), and business climate attractiveness in Lebanon and Syria based on the latest available data and reports:
Contents
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People queue in front of a teller next to a pile of banknotes of different currencies at a commercial bank affiliated with Syria's central bank in Damascus on December 16, 2024. Governments worldwide are stepping up efforts to engage with Syria's new interim rulers, just over a week after Islamist-led rebels ousted president Bashar al-Assad, ending decades of brutal rule and civil war. (Photo by Louai Beshara / AFP) / "The erroneous CAPTION appearing in the metadata of this photo by Louai Beshara has been modified in AFP systems. Please immediately remove the erroneous mention[s] from all your online services and delete it (them) from your servers. If you have been authorized by AFP to distribute it (them) to third parties, please ensure that the same actions are carried out by them. Failure to promptly comply with these instructions will entail liability on your part for any continued or post notification usage. Therefore we thank you very much for all your attention and prompt action. We are sorry for the inconvenience this notification may cause and remain at your disposal for any further information you may require." (Photo by LOUAI BESHARA/AFP via Getty Images)
Photo by LOUAI BESHARA on Getty Images
Foreign Direct Investment (FDI) Overview
| Aspect | Lebanon | Syria |
|---|---|---|
| FDI Inflows (Recent) | Less than USD 200 million annually in recent years, down sharply from a peak of USD 4.4 billion in 20093. Monthly FDI inflows showed slight increases recently (e.g., USD 42.6 million in Dec 2023)2. | Near zero during conflict years but showing signs of recovery post-sanctions. FDI stock reached USD 10.7 billion in 2022, indicating renewed investor interest7. |
| FDI as % of GDP | Historically volatile; currently very low due to economic crisis and political instability13. | Estimated at 2.8% of GDP in 2010, with heavy concentration in oil and gas sectors4. |
| Sector Focus | Services, banking, tourism, and real estate (though banking sector is currently weak)13. | Oil and gas dominate FDI; reconstruction-related sectors (construction, infrastructure, energy, telecommunications) are emerging as major investment areas46. |
Investment Climate and Business Attractiveness
| Factor | Lebanon | Syria |
|---|---|---|
| Political Stability | Political paralysis and economic mismanagement continue to undermine investor confidence despite recent leadership changes3. | Post-conflict reconstruction phase with improving but still fragile political stability; sanctions easing improves outlook36. |
| Legal Framework | Established investment laws but weakened by governance issues and banking crisis; recent BIT with Syria offers some protections5. | Improving legal frameworks with new bilateral investment treaties (BITs), free trade agreements, and special economic zones offering incentives56. |
| Infrastructure | Deteriorated but still functional in many areas; potential for logistics hub development (e.g., airports)3. | Severely damaged but undergoing reconstruction; opportunities for building modern infrastructure and renewable energy projects34. |
| Access to Capital | Banking sector crisis limits credit availability; international aid mostly humanitarian, not investment-focused3. | Reconstruction financing expected to rise significantly with sanctions relief and international support; large-scale projects planned36. |
| Trade and Regional Integration | Historically strong regional trade links but currently constrained; cross-border trade with Syria limited (~4% of combined GNP)5. | Reintegrating into regional and global markets; free trade agreements with neighbors and Turkey enhance attractiveness5. |
Investment Potential and Outlook
- Lebanon faces a challenging environment for attracting FDI and investment due to ongoing economic instability, high public debt (over 170% of GDP), and political uncertainty. While sectors like tourism and logistics have potential, actual investment remains low and cautious13.
- Syria offers significant upside potential driven by post-conflict reconstruction needs estimated at USD 250-400 billion, abundant natural resources, and improving legal protections for investors. The government’s focus on infrastructure, energy diversification (including renewables), and special economic zones creates attractive opportunities for investors willing to navigate political risks346.
Summary
| Criterion | Lebanon | Syria |
|---|---|---|
| FDI Volume | Low and declining (~<USD 200M/year) | Recovering, with USD 10.7B stock in 2022 |
| Business Climate | Politically unstable, weak banking sector | Improving legal framework, reconstruction-driven growth |
| Investment Sectors | Services, tourism, logistics | Construction, energy, infrastructure, natural resources |
| Regional Integration | Limited by political and economic crisis | Strengthened by BITs, free trade, and regional agreements |
| Investor Confidence | Low, due to economic crisis and governance issues | Increasing, driven by reconstruction and sanctions relief |
In conclusion, while Lebanon retains some traditional strengths, its current business climate and FDI attractiveness are severely constrained. Syria, despite higher risks, presents a more compelling investment opportunity due to reconstruction demand, improving legal frameworks, and growing investor interest, positioning it as the more attractive destination for potential investments and FDI in the near to medium term.
Sources:
1 UNCTAD WIR 2025 Lebanon Fact Sheet
2 CEIC Data Lebanon FDI Dec 2023
3 Nowlebanon: The “Phoenix Economy” Potential, Lebanon or Syria?
4 Syria National FDI Report 2010
5 Crowell & Moring Client Alert on Syria-Lebanon Investment Ties
6 International Trade Council, Invest in Syria (2025)
7 Stanbic Bank TradeClub, Syria FDI Report 2023
8 LBC Group News on Syria’s Investment Comebac
