Improvements undertaken by the public sector to improve doing business procedures have boosted Lebanon's ranking in the World Bank's Doing Business Index from 115th globally a year ago to 111th. The general positive investment climate have encouraged many companies to approach IDAL for support services and incentives, many of which from the Agro-Food sector. On the same note, you notice that mega projects are underway in Beirut with multi-million real estate projects coming to conclusion, coinciding with the city being ranked 20th in the world's best cities according to Conde Nast Traveler's 2013 Readers' Choice Awards.

We have dedicated a section in this issue to discuss Lebanon's potential in becoming an outsourcing hub for the MENA region through an analysis of the business process outsourcing landscape in the country.


I hope you will find the information useful, for any feedback please do not hesitate to contact us. 


Best Wishes,


Nabil Itani

Chairman-General Manager


While the prevailing politico-security conditions are affecting the investment climate at large, the Investment Development Authority of Lebanon is still managing to attract investors every month, highlighting the continuous faith in the Lebanese economy.


In September and October 2013, eight Lebanese investors requested IDAL's support for their projects, 4 of which have projects are in the Agro-Industry sector, while the rest of the projects are scattered across the Agriculture, Industry, IT and Tourism sectors. All of the projects are greenfield or new projects with only one project an expansion of an existing factory producing candies and cake. In terms of the distribution of projects by region, we notice that 50% of the projects intend to set up in the Bekaa, 25% in Mount Lebanon, and the rest in Beirut and the Northern. The latter shows a decentralization of the economic activity across various regions in the country. 



The concentration of projects in the Agro-food sector, is a shift from the trend of projects that IDAL used to witness in the past, where projects were mostly concentrated in the Tourism sector. The increase of investments in the Agro-food sector highlights the presence of business opportunities for local companies to serve the regional market, opportunities arising from the competitiveness of Lebanese goods in high-quality niche products. The projects that were brought forward in the last 2 months consisted of an olive oil refinery in Mount Lebanon, a beer factory in the Bekaa, a mineral water bottling factory and a packaging house in Batroun. It is important to note that exports of olive oil have been on an upward trend, growing at a rate of 22% between 2011 and 2012. 

As for the other projects, they consisted of a factory manufacturing a new type of agriculture bacteria in the Bekaa, a software development (mobile application) company in Beirut, and a 3-star hotel with chalets in Mount Lebanon.



The demand for Agro-food and Agricultural projects stems from a shortage in regional supply and the increasing competitive quality of Lebanese products; with agricultural exports increasing by a noticeable 34.4%, from USD 93 million in the first half of 2012 to USD 125 million in the first half of 2013. Agricultural and food products represent 15.1% of total exports in the corresponding period.


Of those eight projects, five are eligible for IDAL's incentives. The remaining three did not meet the requirements of Investment Law No. 360, be it in the number of jobs created or investment size, or the date of establishment of the company. 







  • The Lebanese landscape for business process outsourcing (BPO) activities has been evolving over the last decade with a number of Lebanese companies mushrooming to offer a broad range of outsourcing services under three main subsectors: Call Centers, BPO services (back office operations such as IT, HR, Accounting, etc...), and ITO (Information technology outsourcing).  
  • Services offered by local companies include Sales & marketing, Technical support, Transaction processing, Customer care, Finance & accounting, CRM consulting & support, Software products, and other businesses
  • More than 200 companies are involved in Call center, ITO and BPO activities, with 13 operating as call centers and the remaining offering IT solutions
  • The 13 call centers in Lebanon, employ around 850 employees and companies involved in ITO activities employ 4100 employees
  • In total, the sector employs more than 5000 employees, engaged in Call center, BPO, and ITO activities with more than 90% of these employees in high value added services
  • Local companies have already established a solid track record and now serve an array of local regional and multinational companies such as Samsung, Toshiba, Orange, Nestle, etc.



What can Lebanon do to become the outsourcing hub for the MENA region? 

As economic growth is now coming from emerging markets, countries which are strategically positioned to access these emerging markets may be able to reap great business advantages. Lebanon is adequately positioned to serve the growing Gulf market, given its location and cultural affinities to the region


Three main elements usually affect the decision of companies in the outsourcing industry: Labor (both cost and quality), Infrastructure, and an adequate Business environment. While Lebanon is able to compete successfully at this stage with regards to its labor pool, additional improvements have to be made at the level of the infrastructure and the Business Environment.


The labor pool poses as one of Lebanon's key advantages in the industry for a variety of reasons. The country has one of the best educational systems internationally, allowing Lebanon to offer a tri-lingual highly skilled labor force - a top consideration for outsourcing decisions. While this labor force may not be as cheap as global outsourcing giants like India and the Philippines, it is cost competitive and able to offer comparable quality to Eastern European countries which have recently become a preferred high quality outsourcing destinations for multinationals (with an average labor cost of 9.6 USD / hour for Lebanon compared to around 13.2 USD / hour in the Czech Republic for instance). In fact, while cost has been the main variable in outsourcing decisions, the past 5 years have seen a heavier shift towards talent and quality considerations, with increased importance allocated to efficiency and customer satisfaction. Where Lebanon cannot position itself in terms of cost and scale, it can definitely compete at the level of productivity. 

That being said, it remains evident that as companies move higher into the value chain of the BPO industry, activities will shift into more skill demanding subsectors, especially in the BPO and IT outsourcing industry. While the industry gains pace, ultimately it will require the presence of ITO focused university programs and training to allow for a transition from entry level call center tasks into more technical and IT focused skills that are at the high end of the outsourcing industry. This will strengthen Lebanon's positioning as a provider of high quality call center and back office operations, especially for accounting and finance tasks.


The outsourcing industry is one where Lebanon is highly capable of competing at the regional and international levels, given its cost competitive and highly skilled labor force.

Going forward, the government of Lebanon, through IDAL, aims to more aggressively promote its available talent to the world. By increasing its presence in relevant forums, and utilizing multiple investment promotion tools, IDAL can showcase Lebanon's competitive advantages and position the country among other prominent locations for successful IT and outsourcing operations and as such be able to create more job opportunities in the local market. 


Business Meeting


In the World Bank's latest Doing Business report (2014), Lebanon's rank improved by 4 places, from 115th place to 111th place globally. This progress is the result of Lebanon's efforts to make life easier for the private sector. The government worked on facilitating the start-up process through:
  • The simplification of the formalities to stamp company books
  • The reduction of the cost of securing electricity by reducing application fees and security deposits for new connections.
  • Enhancing its credit information system by allowing banks online access to the public credit registry's reports.
  • Making it easier to pay taxes by eliminating the requirement to obtain permission to use accelerated depreciation, and introducing an electronic payment system that enabled taxpayers to pay taxes and fees to the treasury on the Internet.



IDAL has participated at the "3rd Global Free Trade and Special Economic Zones Summit" held in Dubai, UAE on Oct 21-23. Chairman of IDAL had an intervention on "Establishing and Efficiently Running a "One-stop-shop" best practices" in tenant after care, development and retention. You can download the white paper on the subject matter.






In light of enhancing economic relations between Lebanon and Japan, Chairman of IDAL, Mr. Nabil Itani has met with First Secretary of the Japanese Embassy in Lebanon Mr. Masami Aishii.

The discussion revolved around the  business advantages of both countries and the possible ways of increasing joint activities that will improve the balance of trade and facilitate investment through focusing on business opportunities in sectors with potential especially in Technology, Industry, Agriculture, and Agro Food.




The Investment Development Authority of Lebanon (IDAL) is the national investment promotion agency of Lebanon. Established in 1994, IDAL aims to promote Lebanon as key investment destination and attracting, facilitating and retaining investments in LebanonIDAL reports to the President of the Council of Ministers which exercises a tutorial authority over it.



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