16.10.2005
Libyaninvestment.com

Article 1

     The aim of this law is to attract investment of foreign capital in investment projects within the framework of the general policy of the state and of the objectives of economical and social development and in particular:

- Transfer of modern technology

- Training the Libyan technical personnel

- Diversification of income resources

- Contribution of the development of the national products so as to help in their entry into the international markets.

- Realization of a locale development

Article 2

     This law shall apply to the investment of the foreign capital held by Libyans and the nationals of Arab and Foreign States in investment projects.

Article 3

     In the application of this law unless the context otherwise requires, the following words and phrases shall have the meaning assigned to each:

   1. Jamahiriya means The Great Socialist People's Libyan Arab Jamahiriya.

   2. The law means The law of Foreign Capitals Investment Encouragement.

   3. The Secretary means The Secretary of the General People's Committee for Planning, Economy and Commerce.

4. Authority means Libyan Foreign Investment Board

   5. The Executive Regulation means the Regulation issued for the implementation of the provisions of this law.

   6. The Foreign Capital means the total financial value brought into the Great Jamahiriya whether owned by Libyans or foreigners in order to undertake an investment activity.

   7. Project means any economic enterprise established in accordance with this law, the result of its work is the production of goods for end or intermediate consumption, or investment goods, or the export or provision of service , or any other enterprise approved as such by the General people's Committee.

   8. Investor means Any natural or juridical entity national or non-national, investing in accordance with the provisions of this law. 

Article 4

     This law regulates the investment capital brought into the Jamahiriya in any of the following forms:

- Convertible foreign currencies or substitutes thereof brought through official banking methods

- Machinery, equipment, tools, spare parts and the raw materials needed for the investment project.

- Transport means that are not locally available.

- Intangible rights; such as Patents, licenses, trade marks and commercial names needed for the investment project or operation thereof.

- Reinvested part of the profits and returns of the project.  

     The Executive Regulation Shall regulate the manner for the evaluation of the in kind portions used in the formation of the capital designated for investment in the Jamahiriya .  

Article 5

     There shall be established an Authority to be known as " Libyan Foreign Investment Board " having its own independent juridical

      Personality, under the jurisdiction of the General people's Committee for planning, Economy and Commerce. The Authority shall be established by a decision From the General People's Committee upon a proposition by the Secretary stating the Authority's legal domicile, its secretary and members of its management committee.

     The Executive Regulation shall regulate the meeting of the administrative procedures required for establishing Project. 

Article 6

     The Authority Shall work for the encouragement of foreign capital investment and promotion for the investment projects by various means; in particular it shall:

1. Study and propose plans to organize foreign investment and   s upervise foreign investment in the country.

 2. Receive the applications for foreign capital investment to determine whether they satisfy the legal requirements and the feasibility study for the project and then submit its recommendations to the Secretary accordingly.

 3. Gather and publish information and conduct economic studies relevant to the potentials of investments in the projects that contribute to the economic development of the country.

4. Take proper actions to attract foreign capitals and promote the chances of investment through various means.

5. Recommend exemptions, facilities or other benefits for the projects that are considered important for the development of the national economy, or recommend the renewal of the exemptions and benefits as provided for in the law for further periods of time. It shall submit its recommendations to the relevant authority.

 6. Consider without prejudice to the right of the investor to petition and litigate complains, petitions or disputes lodged by the investors resulting from the application of this law.

 7. Study and review periodically the investment legislations, propose improvement thereof and submit same to the concerned authority.

 8. Perform any other functions assigned to it by the General People's Committee. 

Article 7

     The project is required to realize all or some of the following:

-  Production of goods for export or contribution to the increase of export of such goods or substitute imports of goods in total or in part.

 - Make available positions of employment for Libyan manpower, train and enable some to gain technical experience and know-how. The Executive Regulation shall set the conditions and terms of employment of Libyan manpower.

 - Use of modern technology, trademark or technical expertise.

  - Provision of a service needed by the national economy or contribute to the enhancement or development of such service

- Strengthen the bounds and integration of the existing economic activities and projects or reduce the cost of production or contribute in making available materials and supplies for their operations.

- Make use or held in making use of local raw materials.

- Contribute to the growth and development of the remote or underdeveloped areas. 

Article 8

     Investment is permissible in the following areas:

 -   Industry

   -   Health

   -   Tourism

   -   Services

   -   Agriculture

    And any other area determined by a decision from the General People's Committee according to a proposal from the Secretary. 

Article 9

     The permit for foreign capital investment shall be granted by the Authority after the issuance of the Secretary's decision approving the investment. 

Article 10

     Project established within the framework of this law shall enjoy the following benefits

A) An exemption for machinery, tools and equipment required for execution of the same impact.

B ) An exemption for equipment, spare parts and primary materials required for the operation of the project from all custom duties and custom taxes imposed on imports as well as other taxes of the same impact for a period of five years.

C ) Exemption of the project from the income taxes on its activities for a period of five years as from the date of commencement of production or of work, depending on the nature of the project this period shall be extendable by an additional duration of three years by a decision from the General people's Secretary. Profits of the project will enjoy these exemptions if reinvested. The investor shall be entitled to carry the losses of his project within the years.

D ) Goods directed for export shall be exempted from excise taxes and from the fees and taxes imposed on exports when they are exported.

   E) The project shall be exempted from the stamp duty tax imposed on commercial documents and bills used .

     Exemptions mentioned in paragraphs A, B, and D of this Article do not include the fees imposed in consideration of services such as harbor, storage and handling dues . 

Article 11

     Equipment, machinery, facilities, spare parts and primary materials imported for the project may neither be disposed of through sale or abandoned without the approval of the Authority and after payment of custom duties and taxes imposed on importation thereof; nor be used for purposes other than those licensed therefore .

Article 12

     The investor shall have the right to:

A) Re-export invested capital in the following cases:     

- End of the project's period.

- Liquidation of the project.

- Sale of the project in whole or in part.

- Elapse of a period of not less than five years as of the issuance of the investment permits.

B) Re-transfer the foreign capital abroad in same form   

In which it was first brought in cases where  

Difficulties or circumstances out of the investor's  

Control prevent its investment.

C) It is permissible to transfer annually the net of the 

Distributed profits realized by the project and interest thereof.

 D) The investor has the right to employ foreigners whenever the national substitute is not available.

- The foreign employees who come from abroad have the right to transfer aboard a percentage of their salaries and wages and any other benefits or rewards given to them within the framework of the project

- Conditions and terms regarding the implementation of this Article shall be set by the Executive Regulation.

Article 13

     The project shall not be subject to registration at the commercial register nor at the register of the Importers and Exporters; the Executive Regulation will set the procedures of the registrations at the Authority.

Article 14

    A project established in the local development areas or a project which contributes to food security or a project which uses installation and means conducive to save energy or water or contributes to the protection of environment, will enjoy the exemption mentioned in paragraphs  B) And C) of Article 10 of this law for an additional period by a decision from the General People's Committee upon a proposal from the Secretary. The Executive Regulation will set the terms and conditions according to which the project could be considered as achieving these goals. 

Article 15

     Not withstanding ownership laws in force, the investor shall be entitled to hold title for land use. The investor may also lease such land, construct buildings thereof required for establishment or operation of the project; all as per the terms and conditions set in the Executive Regulation.

Article 16

     The investor shall have the right to open his project in an account in the Libyan Arab Bank. 

Article 17

     Ownership of the project may be transferred in whole or in part to another investor with the approval of the Authority; the new owner will replace its predecessor in all rights,  undertakings and obligations arising there from in accordance with the provisions of this law and other legislation in force . The Executive Regulation shall set the terms and conditions for the transfer of ownership.

Article 18

    In case it is proven that the investor has violated any provisions of this law or the Executive Regulation; the Authority shall issue a warning to the investor to rectify the violations within a period of time specified therein. In case of failure by the investor to adhere thereto, the Secretary upon a recommendation by the Authority, may:

 - Deprive the project from some of the benefits provided for in this Law.

   - Oblige the investor to pay double the exemptions granted to him. 

Article 19

     The permit of the project may be withdrawn or the project finally liquidated in the following cases:

 - Failure to start or complete the project in accordance with the terms and conditions set by the Executive Regulation;

- Violation of the general provisions of this law and Executive Regulation;

- Repetition of violations.

     All in accordance with the procedures specified by the Executive Regulation. 

Article 20

     The investor shall be entitled to petition in writing against any decision affecting him as per article 18 or article 19 of this law, or against any disputes arising because of the implementation of the provisions of this Law within thirty days as of the date of notifying him by a delivery guaranteed letter; the Executive Regulation shall specify the proper authority to which petitions should be submitted and processes of petition.

Article 21

     The investor should:

- Maintain regular books and records for the project.

 - Prepare an annual budget and profit and loss account audited by a chartered accountant as per the conditions set forth in the Commercial Law.

Article 22

     The employees of the Authority designated by decision from the Secretary shall have the power of the judicial officers to control the enforcement of this Law and to unveil and record the violations and refers same to the competent authority; for this purpose the said employees shall be entitled to inspect the projects and check the books and records relevant to their activities.

Article 23

     The project may not be nationalized, dispossessed, seized, expropriated, received, reserved, frozen, or subjected to actions of the same impact except by force of law or court decision and just compensation provided that against an immediate and just compensation provided that such actions are taken indiscriminately; the compensation will be calculated on the basis of the fair market value of the project in the time of action taken. The value of the compensation in convertible currencies may be transferred within a period not exceeding one year and according to the rate of exchange prevailing at the time of transfer.

Article 24

     Any dispute arising between the foreign investor and the State, due to the investor's act or to actions taken by the State, shall be referred to a count having jurisdiction in the Jamahyria except where there is a bilateral agreement between the Jamahyria and the State to which the Jamahyria and the State to which the investor belongs are parties that provide for relevant reconciliation or arbitration, or there is a special agreement between the investor and the State containing provisions in regard to an arbitration clause.

Article 25

     Foreign investments in existence on the date of issuance of this Law shall enjoy the privileges and exemptions provided for herein.

Article 26

      Provisions of this law shall not apply to foreign capital invested  or to be invested in petroleum projects as per the provisions of law number 25 of 1955 , as amended .

Article 27

     The Executive Regulation to this law will be issued by a decision from the General people's Committee upon a proposal from the Secretary.

Article 28

      Law number 37 of 1968 regarding investment of foreign capitals in Libya is hereby repealed and so are any other provisions that may contradict the provisions of this law.

Article 29

This law shall be published in the Official Gazette and in the different media and be effective as of its publication in the Official Gazette.