Regarding the Issue of the Executive Regulation of Law No. (5) For year 1997, related to the Encouragement of Foreign Capitals Investment.

- After having reviewed the law commercial law;

- And the Law No. (5) for year 1997, regarding the encouragement of foreign capitals investment, and its amendment by the law No. (7) for year 2003;

- And the law No. (1) for year 2001, regarding people's congresses and people's committees, and its executive regulation;

- And the law No. (1005) for year 1991, regarding the formation of a committee to set out an integrated development plan for some areas;

- And the decision of the General People's Committee No. (20) for year 2002, regarding the reorganization of the Investment Encouragement Authority;

- And the decision of the General People's Committee No. (21) for year 2002, regarding the executive regulation of the law No. (5) for year 1997, related to the encouragement of foreign capitals investment.

- And upon what has been proposed by the Secretary of the General People's Committee for Economy and Commerce, in his letter No. (2952/1), dated 14/12/2003, and the letter of the General People's Committee for Economy and Commerce No. (101/2/5), dated 13/01/2004.

It has hereby decided

Article (1)

The rules of executive regulation of the law No. (5) for year 1997, amended by the law No. (7) for year 2003, related to the encouragement of the foreign capitals, enclosed with this decision.

Article (2)

The decision of the General People's Committee No. (21) for year 2002, above mentioned, shall be cancelled.

Article (3)

This decision shall come into force as of date of its issue.

Executive Regulation of the Law No. (5) for year 1997,related to the Encouragement of Foreign Capitals Investment Amended by The Law No. (7) for year 2003 Issued by virtue of the Decision of the General people's Committee No. (9) for year 2004.

Chapter One

Areas of Investment and its Applications Review

Article (1)

Determination of Investment Areas and Terms

It is allowed to invest the foreign capital, owned by Arab Libyan nationals and to subjects of Arab and foreign countries, in the fields of industry, agriculture, tourism, services and other fields decided to be added thereto by the General People's Committee.

The national capital, owned by physical or moral persons, may partner the foreign capital in investment according to the following terms and restrictions:

1- Contribution in cash.

2- Contribution in kin.

3- Part reinvested from project profits and revenues.

The People's Committee for the Authority determines the value of the investment project capital, as well as the partnership portions, as per the field of investment and the nature of each investment project separately.

Article (2)

Evaluation of the Portion in Kind

If the invested capital contains a portion in kind, then its value shall be evaluated by a specialized technical committee, to be formed by virtue of a decision to be taken by the Secretary of the People's Committee for the Authority. The decision of the committee shall be taken by majority and to be approved by the Secretary of the People's Committee for the Authority. The investor, or his representative, is allowed to attend the deliberation committee, with no right to vote for the taken decision.

Article (3)

Applications Submitting

The applications of investment shall be submitted by the concerned, or his representative, to the Secretary of the People's Committee for Authority in a form to be specified therefor, provided that the application shall include the following data:

- Applicant's name, nationality, legal form and head office.

- Project general description, including, in particular, the field to be invested in, the time period necessary for project execution completion, a statement of the invested money nature, its amount and units.

It may submit applications through commercial attachés at the People's Bureaus abroad, or who represent them. Those bodies shall refer the application immediately when submitted to the Authority.

Article (4)

Required Documents for Investment

The applicant shall enclose with his application the following documents:

1. A feasibility and social study of the investment project, showing in particular:

a) Value of the capital to be invested in Libya, its nature, evaluated by one of the transferable currencies, or equivalent by the Libyan currency when submitting the application.

b) Raw materials and other elements existing in Libya, which will be exploited by the project, if any.

c) Raw materials and other elements existing in Libya, which will be exploited by the project, if any.

c) Technical specifications of the project and estimations of its expected production as well as the extent of its service rendered to the National Economy.

d) Timetable determining the duration of the investment project execution and the capital flows.

e) National and foreign manpower needed to operate the project.

2. A Certificate evidencing the nationality of the investor issued by the competent body in his country.

3. A recent official extract of the registration sheet of the concerned from the Commercial Register in his origin country, if he has an economic activity therein.

4. Last approved balance sheet of the concerned, if he is a moral person.

5. An official certificate issued by the competent body, in the place where the head office of the concerned is located, evidencing the non-bankruptcy.

The Authority may require any clarifications or additional information, related to data submitted by the concerned about the project intended to be established, which may remove any ambiguity or non-clearness therein.

The documents submitted for the project, mentioned in this article from (2-5), shall be approved and legalized by the Arab Libyan People's Bureau in the country of residence of the concerned, or where there is a head office of the concerned. All documents shall be original enclosed with an Arabic translation.

In all cases, it shall satisfy all required documents within a period not exceeding sixty days as of date of application submitting.

The Secretary of the People's Committee for the Authority may extend the said period for objective consideration he sees fit.

Article (5)

Data Required to be Included in the Receipt

The applicant shall be granted a receipt proving the application submitting, which includes the following data:

1. Number and date of application submitting.

2. Applicant's name, surname, nationality and capacity.

3. Name and signature of the employee who receives the application.

4. Statement of documents enclosed with the application.

5. Desired field of investment.

Article (6)

Applications Registration

The applications are registered when arrived to the Authority, in a special register with sequential numbers as per date of reception. Each application shall be maintained in a special file in which all relevant documents, papers and correspondences are deposited.

The application number, concerned's name, address and nationality, name of the project and sector to be invested in shall be recorded on the file external cover. In the internal cover, a statement of documents and papers deposited therein, together with their sequential numbers in the file, their dates, and number of sheets and date of deposit are recorded.

Article (7)

Settlement of Applications

The People's Committee for the Authority undertakes the study of applications, preparation of necessary recommendations, technical and administrative reports related thereto, including its opinion in the project, and a statement of the extent of its service rendering to the national economy. This is will be done within a period not exceeding sixty days as of date of having satisfied the required documents. The Authority shall refer its proposals and recommendations tot eh Secretary in order to issue the necessary decision.

The Secretary may return the application with its whole enclosures to the Authority, if it appeared to him that some particles of the investment project are not clear, or there is a lack in the submitted data. And in such a case, it shall sate the return reasons expressly so that the Authority will complete or clarify them.

Article (8)

Notification of the Concerned

The Secretary of the People's Committee for the Authority undertakes to notify the applicant in writing, through direct handover or by a letter with acknowledging receipt, by the approval or refusal of the Secretary regarding the investor's application, within tend days as of date of receiving the decision of an approval, a refusal or a suspended approval by the Authority.

If the approval is suspended on one or more conditions, then the Secretary of the People's Committee for the Authority shall state that and notify the concerned to satisfy what is required within a specified time period. As to the case of approval, the Authority will issue the necessary licenses for investment in coordination with the competent bodies in Libya, where the licenses issued by the Authority are sufficient with no need for other licenses decided by the applicable legislations.

Article (9)

Project Form

The investment project shall have one of the following forms:

1. Joint venture companies.

2. companies with limited responsibility.

3. Branches of foreign companies.

4. Individual project.

5. Any other legal form.

And it shall be registered at the Authority as per procedures and rules shown in this regulation.

Article (10)

Establishment of the Investment Register

A register special to the Authority, named (Investment Register), in which all projected having obtained the investment licenses from the Authority are registered. A special sheet paper in the said register will be reserved for each project, in which the following date will be registered:

1. Project name, investment area and the activity practiced by the project, and its site and head office.

2. Value of the project capital and the part paid therefrom.

3. Names of investors in the project, their nationalities and the value and share of each of them in the project capital.

4. Name, surname, capacity and nationality of the legal representative.

5. Number and date of the decision related to the permission of investment.

6. Number and date of execution license, as well as the project activity practice.

7. Project investment costs and its financing sources.

8. Statement of the exemptions granted to the project and their validity period, as well as other facilities and privileges, and a statement of breaches and type of punishments issued against the project.

9. Statement of portions in kind and in cash entrant in the formation of the capital.

10. Any other data related to the investment project.

Article (11)

Registration in the Investment Register

The licensee shall submit an application to the Bureau of the Investment Register, according to the form prepared by the Authority to register in the Register, accompanied with the following documents:

1- Memorandum of Foundation and Articles of Association of the Project, which will take one of the forms stipulated in the article (9) of the regulation, or the Memorandum of Foundation and Articles of Association of the mother company, if the project will take the form of such company branch, together with the decision of the board of directors regarding the establishment of the branch, appointment of its manager, and its legal representative in Libya. As to the matter where the investor is a physical person, the data submitted by him when submitting the application to obtain the investment license is sufficient.

2- Authorization document in competencies, or agency of management issued by the project manager and its legal representative, provided it includes expressly their competencies and the validity period of authorization or agency.

3- Form bearing the signature of the project manager, or its legal representative in Libya.

4- Certificate from the relevant competent bodies evidencing the entry of the project capital, or a part thereof, into Libya.

The Registration in the Investment Register incur all legal effects incurred on the registration of the Commercial Register, including the affirmation of the moral personality. After having satisfied all data and documents specified in this article, the Bureau of the Investment Register will issue to the concerned a certificate evidencing his registration in the Investment Register according to the form to be prepared by the Authority.

Article (12)

Complaint

The investor may complain from the administrative procedures issued against him. He may also have recourse to the court, if one of the following decisions are issued against him:

- Refusal to register the project in the Investment Register at the Authority.

- Depriving the project from some privileges stipulated by the law of the encouragement of foreign capitals investment.

- Obliging the investor to pay the double of what he is exempted therefrom.

- Issuing a decision to withdraw the project or to liquidate it finally.

- Withdrawing the license.

The complaint is submitted in writing to the Secretary of the People's Committee for the Authority, within thirty days as of date of notifying the complainant by the decision issued against him.

And in case of reaching no solution with the complainant, the Secretary of the People's Committee for the Authority shall refer the complaint enclosed with the opinion of the Authority to the competent secretary within two weeks, for reviewing and issuing his decision accordingly, within fifteen days as of date of referring the complaint to him.

The complaint at the Authority shall not prejudice the investor's right in having recourse to the court.

Chapter Two

Privileges and Exemptions

Article (13)

Import Right

Every investor, licensed for investment, has the right to import all project needs and requirements from abroad, whether they are machines, equipment, heavy machines or apparatuses necessary for the project execution, or they are spare parts or raw materials necessary for its operation.

The imported materials are exempted, within the limits stipulated in the article ten of the law No. (5) for year 1997, above mentioned, from all customs fees and duties as well as taxes having similar effect, imposed on the import, according to the following terms:

1. Such materials shall be imported in the name of the project and in its favour.

2. The imported materials shall be suitable (in quantity and quality) to the licensed field of investment.

3. The investment license shall be valid in the time of import.

4. Undertaking to use such materials in the project, and do not act therein with any manner of action for other bodies, unless obtaining a written permission therefor from the Authority.

In case of approval to the investor to sell such machines, equipment or apparatuses to another persons, other than those included in a similar customs exemption, than he shall pay the customs fees due thereon, which were exempted previously.

Article (14)

Export Right

The investor may export his products outside Libya, when he so desires, whether they are primary, intermediate goods or ready for direct consumption, provided the following:

1. The investment license shall be valid in the time of export.

2. The goods desired to be exported shall be among the project production conducted by the investor.

The goods oriented to export are exempted, when being exported, from the production tax, and from all customs fees and duties having similar effect, which are imposed on export.

Article (15)

The exemptions stipulated in this regulation do NOT include fees imposed against some services, such as port and store fees and handling revenues.

Article (16)

Exemption from Stamp Tax

The investment project, established within the frame of law, is exempted from the stamp tax imposed on the commercial written papers, actions and other papers to be established, concluded or used by the project.

Article (17)

Manpower Employment

The investor has the right to bring and employ foreign manpower and technical experiences necessary for project establishment and operation, according to the following terms and restrictions: