Προφίλ συναλλασσόμενης χώρας Λιβύη

Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Legal business entities

Types of companies and capital (max/min)	Number of partners/shareholders and liability	Maximum and/or minimum capital	Liabilities	Registration fees
Joint stock company. The law defines 4 thresholds.	Minimum number of shareholders according to the 4 thresholds: - 13 shareholders, - 25 shareholders, - 50 shareholders, - 100 shareholders.	- 1st threshold: maximum capital of 1 million LYD, - 2nd threshold: capital of between 1 and 2 million LYD, - 3rd threshold: capital of between 2 and 4 million LYD, - 4th threshold: capital above 4 million LYD.	Maximum share of capital available per shareholder according to the 4 thresholds: - 4% of capital, - 2% - 1%, - 0.5%.	The Joint Stock Company is subject to law number 21/1369 dated 21st December 2001.
The foreign company	Minimum of 2 partners. One of them must be of Libyan nationality.	The capital must be between a minimum of 5 000 LYD and a maximum of 30 000 LYD.	The Libyan partner must hold at least 51% of the capital.	Foreign companies are regulated by the clauses of law number 65 dated 20th May 1970.
The office of representation	A minimum of 2 partners, one of whom must be of Libyan nationality.	The office of representation must open a non-resident bank account with funds supplied by the parent company. The deposit must be at least equal to 50 000 LYD.		The office of representation is subject to decree number 8 dated 9th January 2005. It provides for the deposit of a request that includes the name, the profession and the postal address of the representative responsible for filing the request. The company has to pay a registration tax of 25,000 euros.
The foreign subsidiary	A minimum of 2 partners, one of whom must be of Libyan nationality.	The subsidiary must set aside a sum reserved for setup and operating that must be at least 150 000 LYD.		The subsidiary is regulated by decree number 3 dated 3rd January 2005. The request must be filed with the General Popular Committee's Bureau of the investment Register and Commercial Register.

Business setup procedures: The company must be registered with the Bureau of the investment Register and Commercial Register. There is a registration tax of 2% of the contract for foreign suppliers contracting with public organizations.
The competent organization: Decree n°8 of 9 January 2005 modifying some provisions of law 65/1970 stipulates that depositing a request with the Bureau of the investment Register and Commercial Register is compulsory for any foreign company wishing to open an office of representation in Libya. In the request the following must be mentioned: the name, profession and postal address of the representative responsible for filing the request.

FDI in figures

Foreign Direct Investment	2007	2008	2009
FDI of inward flow (millions USD)	4689	4111	2674
FDI inward stock (millions USD)	8723.3604	12834.3604	15508.3604
Performance Index*, ranking on 141 economies	42/141	60/141	42/141
Potential Index**, ranking on 141 economies	35/141	36/141	-
Number of Greenfield investments***	22	40	17
FDI inwards (in % of GFCF****)	76.039691501055	46.7389730709243	18.0169219195512
FDI stock (in % of GDP)	13.9199517019525	14.1313279626981	25.4384828113677

πηγή:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.*** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest Libya

Strong points

Libya's main strong points are:
- Its geographical location: The country is in the center of a triangle formed by Europe, Africa and the Arab countries of the Middle East;
- Considerable natural wealth;
- Inflows of money associated with oil which generate large surpluses;
- The force of private consumption and public investment;
- Opening up and liberalization policies which favor private investment and should revitalize Libya's economy;
- Low foreign debt;
- A dynamic demography. In between 2007 and 2015, the population will increase more than one million persons and will surpass the 7 million bar.

Weak points

Libya's main weak points are:
- The State is omnipresent in the economy;
- Extremely dependent on oil resources;
- An inefficient administration which hinders the development of the private sector;
- Lack of credit, control of price and changes, constraining economic growth;
- Imports restrictions, which have caused shortage of basic goods and food products;
- A high unemployment rate, estimated on 25%, mainly among the youth.

Finally, even if Libya's rehabilitation in the international community has given confidence to investors, structural reforms remain essential.

Government measures to motivate or restrict FDI

Foreign investors in Libya are required to have an agent in the country; in addition, it is difficult to find a good business partner and there is an absence of reliable statistics for marketing studies. Through the Law n°5 of 1997, amended by law n°7 of June 2003, the Libyan government has taken measures regarding the training of local technicians, transfers of technology, participation to the development of local production, creation of regional development and diversification of sources of income.

Tourism, industry, health, services or agriculture are sectors defined by the General People's Committee as being open to foreign investment. Advantages such as tax exemptions are reserved for projects carried out within the framework of this law. However, the percentage held by Libyans or Libyan companies within the framework of this law cannot be less than 51%.

The fields of activity authorized for foreign subsidiaries are specified in decree n°13 of January 9, 2005. They are: building and public works, electricity (except production), hydrocarbons (except extraction; the petroleum sector is regulated by the petroleum law n°25 of 1955, amended several times, especially in 1983), industry, topography, environment, information technology, engineering & technical studies and health. Moreover, the financial sector, telecommunications and wholesale and retail sales are reserved domains. Foreigners have also been able to buy landed property since October 2003.

Procedures relative to foreign investment

Freedom of establishment: Freedom of establishment in Libya is recent: Libya's political and economic system, socialist and centralized as it is, has prevented it for decades from opening up to foreign investment (with the exception of petroleum partnerships). To this must be added the international embargo which aggravated Libya's isolation considerably.

Since 2003, a new policy has appeared in Libya and the lifting of international sanctions coupled with the new policy of encouraging foreign investment has improved the country's attractiveness. In addition, imports are no longer a State monopoly. Law n°5 creates a bureau to encourage foreign investment which authorizes each investment project by granting a five-year operating license, which can be extended for 3 years.
This law allows partnerships between Libyans and foreigners (with no limit on foreign holdings, except those concluded with State companies and the banking sector). Finally, foreign investment projects are freed from the main legal obligations that govern the activity of Libyan companies.
Acquisition of holdings: In the authorised sectors (industry, health, tourism, services and agriculture), a majority holding in the capital of a local company is possible.
Obligation to declare: Before being able to set up in Libya, certain documents must be presented to the Libyan Foreign Investment Board , which authorizes investment projects for a period of 5 years (within the framework of an operating licence). This authorization can be extended for 3 years.
The documents to be submitted are:
- 1 application form that includes the name of the applicant, the nationality, the legal status and headquarters, the description of the project, the investment sector, the schedule of payments, the nature and amount of capital,
- 1 feasibility study,
- 1 certificate of nationality,
- the extract of the company register in the country of origin, 1 copy of the balance sheet and a certificate of non-bankruptcy.
Competent organization for the declaration: The Libyan Foreign Investment Board
Requests for specific authorizations: Apart from the domain of petroleum and associated products which comes under Law n°25 of 1955, and the tourism sector which comes under Law n°7 of 6 March 2004 and Decree n°139 of 26 August 2004, the sectors open to foreign investment include health, industry, services, tourism, agriculture or any other sector defined by a decision of the General People's Committee. Foreign investment is supported by Law n°5 amended by Law n°7 of 2003 and the decrees of application covering the fields of transfer of technology, training of Libyan technicians, diversifiying of sources of revenue, participation in the development of local production in such a way as to allow it access to world markets, and realization of regional development.

Finding assistance for further information

Investment aid agency: Libyan Investment Board
Bank of Commerce and Development
Other useful resources: Invest in Med program

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