Setting up a company

FDI in figures

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.

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, 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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Last updates: May 2012