“Lebanon Debate” – written by Dr. Riad Asaad Hilal
In the midst of the debate surrounding the “golden residency” project, the Lebanese were divided between supporters who saw it as an opportunity to attract capital, and opponents who feared it would turn into a back door to naturalization or to change demographic and economic balances. But beyond the political and media hype, the real question may be very different:
Is Lebanon’s problem today attracting new investors, or maintaining the confidence of existing investors?
In essence, the Golden Residency Project does not grant Lebanese citizenship, does not amend property laws, and does not create exceptional political rights. The project is essentially based on granting a special tax residency to the non-resident Lebanese investor or to the foreign investor who chooses to reside and invest in Lebanon, in exchange for bringing in funds from abroad and investments not less than certain limits, in addition to direct financial fees to the treasury.
In theory, the project does not seem strange to international experiences. Many countries, from Europe to the Gulf and Asia, adopt similar programs to attract capital, talent, and high-net-worth individuals.
But the success of these programs is not based on residency alone. Investment moves not only towards privileges, but towards trust.
Here the Lebanese paradox appears.
At a time when Lebanon is discussing mechanisms to attract a new investor, the file of Emirati investor Khalaf Al Habtoor stands before it, who has become, in recent years, one of the most prominent symbols of the crisis of investment confidence in the country.
Al Habtoor was not a hypothetical investor looking for residency or a tax concession. Rather, he was an actual investor who entered Lebanon decades ago, pumping investments into hotels, real estate, and tourism, and betting on the Lebanese economy at stages when many were hesitant to invest in it.
Today, the dispute between Al Habtoor and the Lebanese state does not revolve around a new project or investment incentives, but rather around a simpler and more dangerous question:
Does the investor feel that his rights are protected when a crisis occurs?
This question is at the core of any investment environment. An investor does not decide to invest only when things are good. Rather, he decides based on what will happen when things get bad.
Precisely for this reason, the Al Habtoor case goes beyond its direct financial value, because it has turned into a test of Lebanon’s investment image before the world.
If an investor who has worked in Lebanon for decades feels that he has to resort to international arbitration to protect his rights, how can a new investor be convinced that merely obtaining a tax residency will be sufficient to make an investment decision?
The problem here is not the golden residency project itself, but rather the order of priorities. Successful countries do not just sell residency, they sell trust.
Capital is not attracted by incentives alone, but by institutions, the judiciary, stability, and the ability to protect rights.
In the UAE, Singapore and Switzerland, residency programs have succeeded not because of residency itself, but because the investor knows in advance that the legal and financial system is able to protect his investment in the event of a dispute.
In Lebanon, the investor faces a different question: If a new crisis occurs, who will protect his investment?
Here, talk about golden residency becomes incomplete if it is not accompanied by broader reforms that include the judiciary, the banking sector, property protection, dispute resolution mechanisms, and the stability of laws.
From this angle, the Golden Residence Project should not be viewed as an alternative to reforms, nor as a magic solution to the economic crisis.
An investor does not come to a country because he has obtained residency. Rather, he comes because he trusts that his money will be safer and more productive in it.
Therefore, perhaps the most important lesson presented by Khalaf Al Habtoor’s file today is that regaining the confidence of the current investor may be more important than attracting a new investor.
The message that reaches global markets is not created by legal texts alone, but rather by facts.
If Lebanon succeeds in addressing its crises with current investors in a fair and transparent manner, this will be the best promotion for any golden residency project.
However, if investment disputes remain open, and the picture of the investment environment remains linked to risks and uncertainty, any new incentives will have limited impact.
In the end, Lebanon may succeed in selling residency. But the real challenge remains selling trust. This is a commodity that cannot be imported from abroad, but must be built from within.
