Lebanese Investments in Syria: Opportunities Raising Questions

Drawing on the old saying, “A close neighbor is better than a distant brother,” hundreds of Lebanese companies have recently rushed to invest in Syria. “More than 500 companies have been officially registered in Syria,” revealed Mohammad Choucair, head of Lebanon’s economic bodies. Lebanon’s private sector also received an additional boost from Syrian President Ahmad al-Sharaa, who, according to statements following his meeting with Deputy Prime Minister Tarek Mitri, said he is working to move beyond the past with Lebanon and open the door to bilateral cooperation.

This renewed momentum among Lebanese investors toward Syria stems from a combination of factors, as explained by Syrian economic analyst and director of the “Iqtisadi” platform, Younes al-Kareem. Chief among these factors:

- Arab pressure—especially from Gulf states— is exerting significant effort to support President al-Sharaa’s government.

- Lebanese investors’ desire to expand beyond their borders, by the stagnation of Lebanon’s economy, particularly on the level of reforms, along with persistent security instability.

- The recognition among Lebanese investors that Syria is not only a neighboring country rich in investment opportunities across all sectors, but also a gateway for Lebanon to reconnect with the outside world.

- Their reliance on Syria’s urgent need for support to recover from the crises of the war years makes it more receptive to any assistance it receives.

- An effort to accommodate countries supporting Syria—whether the United States or Arab states—by partnering with them in rebuilding the neighboring country.

Economic Obstacles

These broad headlines may appear promising at first glance. However, when digging into the details, a long list of obstacles emerges—challenges that stand in the way of expanding and strengthening economic cooperation and rebuilding it based on parity and mutual benefit.

Lebanon was notably absent from the 62nd edition of the Damascus International Fair—held between September 27 and August 5—dedicated to reconstruction. While more than 70 Arab companies participated, Lebanon had no dedicated pavilion, and not a single Lebanese company took part. Moreover, Syrian-Lebanese economic relations currently lack a structured cooperation framework; no initiative has yet been taken to establish a joint business council that would serve as an organizational and economic bridge between the private sectors of both countries to facilitate business and broaden investment. This role used to be fulfilled by the now-dissolved “Lebanese-Syrian Higher Council.”

Among the risks looming over Lebanese investments in Syria is the possibility that major banks with Lebanese capital may falter, following the Syrian central bank’s decision to classify their trapped deposits in Lebanese banks—estimated at $1.6 billion—as bad debt. As a result, it imposed a requirement for 100% provisioning. Since such a measure requires injecting fresh capital that Lebanese banks may not be able to provide, this could ultimately force them out of the Syrian market.

Legal and Political Challenges

Establishing balanced relations requires revisiting the laws regulating imports, exports, customs duties, and transit fees. Although both countries officially raise customs duties between them, Lebanese traders have recently reported an increase in informal customs fees reaching nearly 18%. On top of that, Syria continues to impose high transit costs on Lebanese goods passing through its territory—still exceeding $2,000 per truck—despite attempts to reduce these fees by 50%.

While Lebanon seeks to expand its investments abroad, Syria simultaneously needs substantial and weighty investments capable of lifting its economy out of the devastation it has endured. Sectors such as seaports and airports, electricity, telecommunications, roads, and railways all require massive capital—capital that often cannot be secured except through giant corporations or even full-fledged state-level investments.

That is the economic dimension. Politically and security-wise, the relationship requires a comprehensive review addressing the delineation of land and maritime borders, the issue of Syrian prisoners in Lebanese jails, and enhanced security cooperation to prevent cross-border violations.

The Opportunity Exists—But…

Despite their importance, these measures may not materialize soon due to various internal factors related to political will and institutional capacity. This, in turn, could create an opening for investors to engage in “piecemeal deals”, convincing relevant actors to grant them project shares or exclusive agency rights. However, “this type of unstructured relationship is unprofessional and may not last long,” says Younes al-Kareem, adding that “Syria’s new leadership is working to encourage local talent and attract Syrian expertise that left the country due to the crisis.”

If a genuine opportunity exists for Lebanese investors, he says, it lies in securing Arab and international agency rights to operate in Syria, given the ongoing weakness in intermediary business channels inside the country. This would require offering solutions based on deep, serious studies of Syria’s realities—an approach that appeals both to Syrians and potentially to international investors.

The window of opportunity for Lebanese investors is open—but the clock is ticking. Seizing it requires not only structuring bilateral cooperation with Syria, but also accelerating Lebanon’s internal reforms. Syria’s reintegration into the global system, the suspension of sanctions, and the reactivation of the SWIFT banking system have attracted major investments into its seaports and reopened access to imports that were once prohibited. This could soon allow Syria to no longer rely on Lebanon as a financial or logistical platform for money transfers and import operations.

The emerging reality may push the trade balance between Lebanon and Syria back into deficit—after it had posted, according to the Lebanese Export & Industrial Directory, a surplus in Lebanon’s favor exceeding half a billion dollars between 2016 and March 2025.