Al Habtoor pulls out of Lebanon after $1.7B dispute

The UAE-based Al Habtoor Group has announced the closure of all its operations in Lebanon and the termination of its workforce, ending a business presence that began more than 2 decades ago. The decision follows a prolonged dispute with Lebanese authorities and comes amid mounting economic and institutional pressures that have weighed heavily on foreign investors operating in the country.

In a formal statement, the Group cited sustained instability, what it described as hostile public campaigns against its businesses as well as ongoing legal proceedings with the Lebanese government as central factors behind its withdrawal. The company stated that the cumulative impact of these pressures has made continued operations financially and operationally untenable.

Legal and financial fallout

The closure comes days after the Group announced plans to pursue legal action over alleged investment losses it estimates at more than $1.7 billion. According to the company, its assets were severely affected and the Group absorbed “substantial operational and financial burdens” due to Lebanon’s financial collapse that began in 2019, when banking restrictions effectively froze large deposits and limited the ability of businesses to access or transfer funds.

Al Habtoor Group argued that it had attempted to maintain operations despite absorbing heavy losses, framing its earlier approach as a long-term commitment to employees and local partnerships rather than a short-term commercial calculation. However, it now says that continuing under current conditions is no longer viable and would expose the company to further unjustified financial damage.

The shutdown of hotels and leisure projects, including prominent hospitality properties in and around Beirut, is being presented by the group as a necessary legal and operational safeguard while arbitration and related proceedings continue under international investment frameworks.

Lebanon’s investment climate under scrutiny

The announcement places renewed attention on Lebanon’s fragile investment environment. Since 2019, the country has faced one of the world’s deepest economic crises in modern history, compounded by political paralysis, infrastructure strain and the aftershocks of regional conflict. Reconstruction needs and financial reform efforts remain ongoing, but progress has been uneven.

Foreign investors have increasingly raised concerns about legal predictability, capital controls and the absence of structural safeguards. The Al Habtoor case may become a high-profile test of how Lebanon manages disputes with international investors at a time when it is actively seeking external support to stabilize its economy.

Lebanese officials have not yet issued a detailed public response, but the dispute is expected to carry diplomatic as well as economic implications given the group’s prominence in the Gulf business community.

In conclusion, Al Habtoor Group’s departure is more than a corporate decision; it is a symbolic moment that underscores the strain between Lebanon’s urgent need for foreign investment and the realities confronting companies on the ground. Whether the legal battle leads to reform, compensation or further investor caution remains uncertain. What is clear is that the exit of a major regional investor sends a stark signal about the cost of prolonged instability for Lebanon’s broader recovery prospects.