Doing Business with Libya
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Libya's economy is dominated by the hydrocarbons sector, which contributes 98 per cent of hard currency earnings and approximately 25 per cent of GDP. Agriculture accounts for around 5% of GDP and employs about 7% of the labour force. Climatic conditions and poor soil have severely limited agricultural production, causing Libya to become heavily reliant on imported food products. The non-oil manufacturing and construction sectors have expanded from processing mostly agricultural products to now include petrochemicals, iron, steel and aluminum.

A series of economic liberalization measures designed to encourage privatization of public sector companies and to broaden the scope of private sector activities to include retail trade, small-scale industries and agricultural businesses have been initiated. Reforms to make the business environment more attractive for foreign investors include the Foreign Currency Investment Law of 1997 and the Free Trade Act in 1999.

The effective way of making inroads into the Libyan market is, first, by sending your company profile, product catalogue and precise quotations direct to the concerned companies so as to generate interest in them. Correspondence through letters has little chance of evoking response from Libyans and hence, you should keep in touch with them on telephone/ fax/e-mail (if available). Do not feel discouraged if you do not get a quick response from the Libyan side. Once initial contact is established, a visit to Libya would be necessary to firm up a deal.

Prior to entering into any deal with the party, you should seriously consider mode and schedule of payment. We feel that only a 100% confirmed irrevocable Letter of Credit guaranteed by a Foreign Bank would ensure full and timely payment of your deals. It may be noted that there have been cases of blocked payments by the Libyans in the past. You may also consider appointing an agent in Libya.

In case the Libyan importing company invites you for discussions, you need a Libyan Visa. The Libyan Embassy in New Delhi (22, Golf Links, New Delhi-110003, Telephone: 011-24697717, 24697771, Fax 011-24633005, 24651308, Email: libya@bol.net.in ) issues business visas only after receiving advice from the importing company in Libya. Therefore, please telex/fax your passport particulars to the importing company well in time, and request them to send an invitation for you, to the local immigration department. Libyan Businessmen Council also arranges business visas at a payment of Euro 100. The contact details of the Libyan Businessmen Council are as follows:

Mr. Isa Ayad Babaa 
Executive Director, Libyan Businessmen Council 
Dat El-Emad Complex 
Tower No.5, First Floor 
P O Box 91491 
Tripoli , Libya 
Tel: 00 218 21 335 0213/4, 335 0373, 361 4489 - Dir 
Fax: 00 218 21 335 0374 
E-mail: i-baba@hotmail.com

You may be aware that sanctions against Libya including US and UN have been lifted. Direct flights to Libya have started from several destinations in Europe and the Middle East. There are good numbers of connecting flights from Gulf also.

For further details you may also contact the Chambers of Commerce (details enclosed), visit the website at:
www.libyaninvestment.com 
www.yellopages.com 
www.investlibya.com
For any Trade Enquiries, Please contact us at commerce@indianembassy.ly

Contact details of various Chambers of Commerce in Libya

General Union of the Chambers of Commerce, Industry & Agriculture P O Box 12556, Tripoli
Tel: 3365127-30, Fax: 3365133
E-mail: unionchambers@hotmail.com
Contact Person: Mr. Idris Ben Omran, Chairman 
Mr. Saleh El Mabrouk Al Abedi, Deputy
Mobile: 0912092323, 0928140936
Email: saleh.alabde@yahoo.com
Tripoli Chamber of Commerce, Industry & Agriculture Al-Majd Street, Tripoli Centre Area 
P O Box 2321, Tripoli
Tel: 334 2917, 480 1279, 1280, 7386, 333 4539, 2655, 3755
Fax: 334 2916, 336 6855
Contact Person
Mr. Khalil Masoud, Chairman
Mr. Ahmed Al Fagih, Director General
Mr. Lutfi Laga, Public Relations Manager, Mobile: 0913182134
Benghazi Chamber of Commerce, Industry & Agriculture P O Box 208, Benghazi
Tel: 061-88439, 80971, 88791, 061-9080 553
Fax: 061-88790, 880761, 061-9080554
Mr. Saleh El Mabrouk Al Abedi, General Manager
Misurata Chamber of Commerce P O Box 84, Misurata
Tel: 051-620 340, Fax: 051-616 497
E-mail: idarrat@hotmail.com
Zawia Chamber of Commerce, Industry & Agriculture P O Box 16765, Zawia
Tel: 023-620 301, 021-361 4661
Fax: 023-627 595

Foreign Investment Law in Libya

The Ministry of Economy has published new legislation covering the activities of foreign companies in Libya, limiting foreign shareholdings in joint ventures to 49% and specifying restricted sectors.

Decision 207 was approved in early July by the Ministry of Economy.

It sets out the rules on the formation of joint venture companies between Libyan and foreign firms, the establishment of Libyan branches of foreign companies, and the establishment of representative offices of foreign companies.

In line with Law 23 of 2010, joint venture companies must have a capital of at least LD1m ($787,000), of which a minimum of 30% must be subscribed. Joint venture companies are not permitted to be holding companies.

The decision notes that joint venture companies can also be limited liability companies with a minimum capital of LD50,000 ($39,400).

Foreign shareholdings in Libyan joint venture companies cannot exceed 49%, unless special or technical considerations require a larger shareholding. This may go up to 60% and requires specific case-by-case approval from the Ministry of Economy.

The new decision, like its predecessors, sets out restricted sectors where joint venture companies are not permitted to operate. These are:

  • retail or wholesale trade
  • import services
  • supply services
  • commercial representation services in all their forms
  • land transport services
  • Inspection services on all imported or exported goods
  • cargo, receiving and loading services at all airports
  • accounting, financial consultancy, legal consultancy, economic consultancy services
  • quarrying
  • recruitment
  • contracting
  • any other activities restricted to Libyans by law.

The chairman of any joint venture company must be a Libyan national.

Joint venture companies are required to operate within the following guidelines:

  • knowledge transfer
  • employment of Libyans according to the ratios set out by the law
  • establishing an annual training programme for nationals to build their skills in jobs conducted by foreigners.
  • establishing an annual programme where national staff replace foreigners
  • using machinery, equipment and raw materials available on the local market.

Foreign companies may open branches in Libya providing the investment in the branch is no less than LD250,000 ($197,000) and either the branch manager or the deputy manager is a Libyan national. Branches will be granted a five-year renewable license.

Areas where branches are permitted to operate are:

  1. Contracting:
    • Contracting (including construction, road, bridge and dam building)
    • Construction of sea defences, docks, harbour dredging
    • Construction of airports and runways
    • Laying railway tracks and constructing railway stations
    • Laying gas pipelines
    • Setting up and maintaining domestic gas distribution network
  2. Electricity:
    • Building and maintaining power plants
    • Setting up and maintaining electricity cable networks
    • Setting up water treatment plants
  3. Oil:
    • oil exploration
    • geological surveys
    • drilling and maintenance of oil wells
    • storage and pipelines
    • construction and maintenance of oil refineries and petchem facilities
    • provision of sea transport facilities to service the oil sector
    • mine clearance from oil fields and other areas
  4. Telecoms
  5. Industry
  6. Surveys and planning
  7. Environmental protection
  8. Computing
  9. Technical studies, training and supervision
  10. Healthcare
  11. Air transport

No branch can carry out more than one activity at a time. Foreign companies which already had a branch office in Libya at the time of the decision (5 July 2012) are exempt from the conditions in this decree.

Foreign companies which do not already have a branch or a joint venture company in Libya may establish a representative office in order to study the local market. They are not allowed to enter into contracts. Representative offices will be granted a two-year renewable license.

The decision also sets out the documents and procedures involved in setting up a branch, representative office or joint venture company. The economy ministry says it will give a response within 15 days of a complete application being made, and a decision within 30 days."




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