Lebanese economy faces new hit with exit of major Emirati firm

A Dubai-based conglomerate has announced it is shutting down all of its operations in Lebanon and laying off its entire workforce there, citing prolonged instability and a deepening legal dispute with Lebanese authorities.

Al Habtoor Group announced on January 28 that it would close its businesses in Lebanon, bringing an end to its 25-year presence in the country. The decision comes just two days after the company announced plans to pursue legal action against the Lebanese government over alleged investment losses totaling $1.7 billion, as reported by Arab News.

In an official statement, the group said it had continued operating in Lebanon despite years of crises, wars and economic collapse, but that the situation had become untenable. 

“Throughout years marked by successive wars and crises, the Group absorbed substantial operational and financial burdens, honoured its obligations to its employees, and treated this period as a humanitarian responsibility before a commercial one, despite the absence of effective state decision-making and the failure to provide the minimum levels of stability and protection required,” the statement said.

Lebanon has been mired in its worst economic crisis since late 2019, when banking restrictions effectively froze deposits and cut off businesses and individuals from their savings. The country also suffered significant damage during the 14-month Israel–Hezbollah war, which ended with a ceasefire in November 2024. The World Bank has estimated reconstruction and recovery costs at around $11 billion.

Al Habtoor Group said its decision to exit Lebanon was driven by “prolonged instability, ongoing hostile campaigns, public attacks and defamatory actions” directed at the company and its businesses, as well as the broader legal proceedings underway with the Lebanese state.

The closure will result in the termination of contracts for all employees in Lebanon. The group’s portfolio in the country includes the Metropolitan Palace Hotel Beirut and the Al Habtoor Grand Hotel Beirut, both located in the capital, as well as Habtoor Land, a large theme park east of Beirut. Last year, the company reversed earlier plans to dismantle the Metropolitan Palace Hotel.

Earlier this week, Al Habtoor Group confirmed it would move ahead with legal action after what it described as years of unresolved investment disputes and mounting losses tied to Lebanon’s financial system. In a statement, the company said its assets had suffered “severe and sustained harm” due to measures imposed by Lebanese authorities and the Banque du Liban, which it says prevented access to and transfer of lawfully deposited funds.

“These enormous losses are not limited to the unlawful deprivation of access to the Group’s funds in the Lebanese banks, but also arise from the broader collapse of institutional stability,” the statement said.

In 2024, the group formally notified the Lebanese government of an investment dispute through an international law firm, triggering a six-month cooling-off period under the UAE–Lebanon Bilateral Investment Treaty, which has been in force since 1999.

By Nazrin Sadigova