Law No. (5) of 1426 PB (1997) for Promotion of Investment of Foreign Capital, as Amended by Law No. (7) of 1371 PD (2003)
(as published by http://www.investinlibya.com/index2.htm)
The General People’s Congress
In compliance with decisions of the Basic People’s Congresses in their 2nd ordinary session for 1425 PB 1995, as formulated by the General Meeting of Basic People’s Congresses and Committees, Syndicates, and Trade Unions and Associations (General People’s Congress) in its ordinary session held during the period from (25 – 30) Shawal 1426 PB, corresponding to (4-9) March 1997,
After perusal of the Declaration for establishing People’s Authority,
The Grand Green Charter for Human Rights in the Era of the Masses,
Law No. (20) of 1991 for enhancing freedom,
The Commercial Law and its amendments,
Law No. (37) of 1968 for investment of foreign capital.
Income Tax Law No. (64) of 1973, and its amendments.
Customs Law No.(67) of 1973,and its amendments .
Law No. (1) of 1993 regarding Banks, Money – Currency and Credit, and its amendments,
Law No. (1) of 1369 PD (2001) regarding People’s Congresses and Committees
Do hereby formulate the following law:
Article (1)
This law aims at promotion of investment of foreign capital for construction of investment projects within the framework of the general policy of the State and the objectives of economic and social development, particularly as follows:
Ø Transfer of modern technology
Ø To build up Libyan technical cadres
Ø Diversification of income sources
Ø Contribution to development of national products to assist in entry thereof into the international markets
Ø To achieve regional development
Article (2)
This law shall be applicable to investment of foreign capital owned by Libyan Arab citizens and nationals of Arab and Foreign States in investment projects.
The national capital may participate with the foreign capital in investment. The executive regulation for this law shall specify the basics and rules for such participation (1)
Article (3)
In applying this law, the following works and phrases shall have corresponding meanings, unless the context indicates otherwise:
1- Great Jamahiriya: Great Socialist People’s Libyan Arab Jamahiriya.
2- The Law : Law for promotion of investment of foreign capital.
3- The Secretary: The Secretary of the General People’s Committee for Economy and Trade .
4- The Board : Libyan Foreign Investment Board .
5- Executive Regulations :The Regulations issued in implementation of
the provisions of this Law.
6- Foreign Capital: Total financial value entered into the Great Jamahiriya in whether owned by Libyans or foreigners for performing investment activities .
(1) Amended by Law No. (7) of 1371 PD (2003)
7- National Capital: Amount in cash or kind assessed by local currency, as involved in formation of the investment project capital, can owned by Libyan citizens or corporate bodies whose capital is fully owned by Libyans (1) .
8- Investment Project: Any economic establishment based on the Law, whose work results in production of commodity for final or intermediary consumption or investment commodities or for export or providing service or any other establishment approved by the Secretariat of General People’s Committee.
9- The Investor: Any national or foreign natural or juridical person investing under the provisions of this law .
Article (4)
This law shall regulates the investment of foreign capital brought into the Jamahiriya in any of the following forms:
Ø Convertible foreign currencies or substitutes thereof in coming by official Banking methods.
Ø Machinery, equipment, devices, spare parts, and raw materials necessary for the investment project.
Ø Transport means unavailable locally.
Ø Intangible rights, such as patents ,invention , licenses, trade marks and commercial names necessary for construction or operation of the investment project.
Ø The part reinvested from the project profits and revenues.
The executive regulation shall organize the manner of evaluating the shares in kind, involved in formation of the capital to be invested in the Jamahiriya.
(1) Amended by Law No. (7) of 1371 PD (2003)
Article (5)
There shall be established an authority to be called (The Libyan Foreign Investment Board) as an independent autonomous / corporate body, to be attached to General People’s Committee for Economy and Trade. It shall be established by decision of General People’s Committee upon submission of the Secretary, specifying its legal domicile, and Secretary and members of its Management Committee. The Executive Regulations shall organize the manner of holding the meetings of the Board and the Administrative procedures necessary for establishing of the project.
Article (6)
The Board shall encourage investment of foreign capital and promote investment projects by the various means, and shall particularly deal with the following:
1- To study and propose the plans for organising foreign investment and supervision of foreign investments in the country.
2- To receive the applications for investment of foreign capital and specifying their fulfillment of the legal conditions and economic feasibility study for the investment project and submit its recommendations to the Secretary.
3- To collect and publish information and prepare economic studies related to the possibilities of investment in the projects which would contribute to the economic development in the country.
4- To take the necessary measures for attracting foreign capital and promotion of investment opportunities by various means.
5- To recommend for exemption, facilities or other privileges for important projects for development of the national economy or recommend for renewal of exemptions and privileges mentioned in this law for another period and to submit its recommendations to the competent authority.
6- To consider the complaints / appeals or disputes presented thereto by the investors as a result of applying the provisions of this law without prejudice to the right of the investor to complain / appeal or litigation.
7- To study investment legislations and revise them from time to time, and to submit its proposals for development thereof to the competent body.
8- Any other functions entrusted thereto by General People’s Committee.
Article (7)
The project is required to achieve all or part of the following:
Ø To produce commodities for export or contribute to increasing exports thereof or resulting in ending imports of commodities wholly or partly.
Ø To provide opportunities for employment of Libyan manpower and to train them for gaining technical skills and experiences. The executive regulation shall specify the terms and conditions for employment of national manpower.
Ø To use modern technology or trade mark or technical experience.
Ø To provide service for the national economy or contribute to improvement or development thereof.
Ø To lead to strengthening the ties and integration between existent economic activities and projects or reduction of production costs or contribute to providing materials and operation necessities thereof.
Ø To utilize or assist in utilising local raw materials.
Ø To contribute to development of remote economically underdeveloped areas.
Article (8)
Investment shall be allowed in the following fields:
Ø Industry
Ø Health
Ø Tourism
Ø Services
Ø Agriculture
Ø Any other field specified by a decision of the General People’s Committee upon submission of the Secretary.
Article (9)
Licensees for investment of foreign capital shall be granted by the Board after issue of the decision for approval of the investment by the Secretary.
Article (10)
The projects established within the framework of this Law shall enjoy the following privileges:
a) Exemption of Machinery, Equipment and tools necessary for executing the project from all customs duties and taxes and taxes of similar effect.
b) Exemption of Equipment, Spare Parts and Raw Materials necessary for operation of the project from all customs duties and taxs imposed on import and other taxes of the same impact for a period of five years.
c) Exemption of the project from income tax on its activity for a period of five years as from the date of starting production or work as per nature of the project. This period may be extended to an additional period of three years by decision of General People’s Committee upon submission of the Secretary. The profits resulting from the project activity shall also enjoy such exemptions if reinvested.
d) Exemption of goods orientated to export from production tax as well as from tax and fees imposed on export when exported.
e) Exemption of the project from stamp duty tax imposed on Commercial documents and documents used thereby.
Exemptions mentioned in paras (a, b, d) hereof shall not include the fees imposed against services such as port, storage and handling fees.
Article (11)
Machinery, equipment, tools, spare parts and raw materials imported for the purposes of the project shall not be disposed of by sale or abandonment unless by approval of the Board after payment of the Customs duties and taxes imposed on import thereof. It is not allowed to use them for other than the purpose for which the license was granted.
Article (12)
a) The investor has the right to re-export his invested capital in the following cases:
Ø Expiry of the project period.
Ø Liquidation of the project.
Ø Sale of the project wholly or partly.
Ø Elapse of a period not less than (5) five years from the date of issue of permits for investment.
b) Retransfer of foreign capital to abroad in the same manner as it was brought after expiry of six months from the date of entry thereof if difficulties or conditions beyond control of the investor prevent investment thereof.
c) Net profits and benefits distributed and interests achieved by the project are allowed to be transfered annually abroad.
d) The investor has the right to employ foreigners / whenever the national substitute is not available the foreign employees recruited from abroad shall have the right to transfer their salaries, wages and any other benefits or gratuities for them within the framework of the project to abroad.
Ø The executive regulations shall organize the terms and conditions for implementing the provisions of this Article.
Article (13)
The investment project shall not be subject to the forms specified in prevailing legislations, nor subjected to registration procedures in the Commercial and Industrial Register and Importers and Exporters Register.
The executive regulation shall specify the legal forms of investment projects allowed for construction under the provisions of this Law, and the rules for construction and procedures for registration in the Investment Register prepared for this purpose.
The investment project shall have autonomous status with independent financial commitment by mere registration thereof in the said Register (1)
(1) Amended by Law No. (7) of 1371 PD (2003
Article (14)
The project constructed in regional development areas or as would contribute to achieving food security or using equipment as would achieve savings in electric power / energy or water or environmental protection shall enjoy the exemptions indicated in paragraphs (b & c) of Article (10) of this Law for an additional period by decision of General People’s Committee, upon submission of the Secretary. The executive regulations shall specify the conditions for considering the project as achieving these considerations.
Article (15)
In exception of the effective legislations related to ownership, the investor has the right to own land based on title of use and to rent it and construct buildings thereon and to own or rent the necessary real estate for construction or operation of the project under the terms and conditions specified in the executive regulations.
Article (16)
The investor shall have the right to open an account in transferable currencies with a Commercial Bank or the Libyan Arab Foreign Bank.
Article (17)
The ownership of the project may be transferred wholly or partly to another investor by consent of the Board. The new owner shall replace the previous owner regarding rights, duties and obligations thereon under the provisions of this law and other legislations applicable.
The executive regulation shall specify the terms and conditions for transfer of ownership.
Article (18)
If the foreign investor violates any provision of this Law or the executive regulations, he shall be notified by the Board for remedying the violation within the period specified in the notice / warning. If he does not respond thereto, the Secretary may upon recommendation of the Board carryout the following:
Ø Deprive the project of certain privileges specified in this Law.
Ø Obligate the investor to pay double amount of exemptions.
Article (19)
The permit issued for the project may be withdrawn or liquidate the project finally in the following cases:
Ø Failure to start the construction of the project or non-completion thereof under the rules and conditions specified by the executive regulations.
Ø Violation of the general rules / provisions of this Law or its executive regulations.
Ø Repetition of contraventions.
All in accordance with the procedures specified by the executive regulations.
Article (20)
The investor may complain / appeal in writing against any decision issued against him under Article (18) or (19) of this law or any disputes arising from applying the provisions of this Law, within (30) days from the date of informing him by registered letter with acknowledged receipt. The executive regulation shall specify the authority for appeal thereto and the appeal procedures.
Article (21)
The investor shall carry out the following:
· Keep regular books and records of accounts for the project.
· Prepare annual / balance sheet and profit and loss account, certified by a Chartered Accountant as per the conditions specified in Commercial Law.
Article (22)
The employees of the Board with the capacity of judicial Officers by decision of the Secretary shall have the power to control implementation of the provisions of this Law and unveil and record the violations, and to this effect they may inspect the projects and check the books and documents related to their activities.
Article (23)
The project shall not be nationalized, expropriated compulsorily acquired or confiscated or imposing guardianship conservation or freezing thereof or subjected to procedures having the same effect unless by law or judiciary verdict against a prompt, adequate and fair compensation, provided that such procedures shall be taken indiscriminately. Compensation shall be calculated on the basis of fair market value for the project in taking the procedure. The value of compensation is allowed for transfer in transferable currency within a period of one year at exchange rates prevailing at the time of transfer.
Article (24)
Any dispute arising between the foreign investor and the State, either by action of the investor or as a result of procedures taken against him by the State shall be presented to the competent Courts in the Great Jamahiriya, unless there is bilateral agreement between the Great Jamahiriya and the State to whom the investor belongs or multi-lateral agreements in which the Great Jamahiriya and the State of the investor are parties thereof, including provisions for conciliation, arbitration or special agreement between the investor and the State providing for arbitration clause.
Article (25)
Foreign investments existent under previous legislations at the time of issue of this law shall enjoy the privileges and exemptions indicated in its provisions.
Article (26)
The provisions of this Law shall not be applicable to foreign capital invested or to be invested in oil projects in accordance with the provisions of Law No. (25) of 1955 and its amendments .
Article (27)
The executive regulations for this Law shall be issued by decision of the General People’s Committee upon submission of the Secretary.
Article (28)
Law No. (37) of 1968 regarding investment of foreign capital in Libya shall repealed as well as any provision contravening the provisions of this law.
Article (29)
This law shall be published in the Official Gazette and the various information media and shall come into force as from the date of its publication in Official Gazette.
The General People’s Congress
Issued in Sirte on 9 March 1997
The Executive Regulations for Law No. (5) issued by Decision of General People’s Committee No. (138) of 1372 PD (2004), as Amended by Decisions of General People’s Committee No. (29) of 1373 PD (2005) and
No. (117) of 1373 PD (2005)
Decision of the General People’s Committee No. (138) of 1372 PD (2004) for issuing the Executive Regulations for Law No. (5) of 1426 PB (1997) for Promotion of Investment of Foreign Capital.
The General People’s Committee,
After perusal of the Commercial Law
Law No. (5) of 1426 PB (1997) as amended by Law No. (7) of 1371 PD (2003),
Law No. (1) of 1369 PD (2001) regarding People’s Congresses and Committees, and its executive regulation,
Decision of the General People’s Committee No. (1005) of 1991 for setting out an integrated development plan for certain regions,
Decision of the General People’s Committee No. (94) of 1371 PD (2003) for transfer of attachment of General Productive Companies to Fund for supporting Local Industries,
Decision of the General People’s Committee No. (20) of 1370 PD (2002) for reorganizing the Libyan Foreign Investment Board.
Decision of the General People’s Committee No. (9) of 1372 PD (2004) for issuing the executive regulation for Law No. (5) of 1426 PB (1997) for promotion of investment of foreign capital, and
Acting upon submission of Secretary of the General People’s Committee for Economy & Trade by his letter No. (5/1/1387) dated 13-05-2004 and,
Minutes of 2nd ordinary meeting of General People’s Committee doe 1369 PD (2001), and
Decision of Secretariat of General People’s Committee in its 22nd ordinary meeting for 1372 PD (2004)
Do hereby decide
Article (1)
The provisions of executive regulations for Law No. (5) of 1426 PB (1997), as amended by Law No. (7) of 1371 PD (2003) for promotion of investment of foreign capital, attached hereto, shall be applicable.
Article (2)
Decision of the General People’s Committee No. (9) of 1372 PD (2004) shall be superseded as well as any provision contrary to this decision.
Article (3)
This decision shall come into force from the date of its issue and shall be publish in the Procedures Encyclopedia.
Issued on 15 Jumadan El-Akhar 1372 PD
Corresponding to 1-08-2004
The Executive Regulations for Law No. (5) of 1426 PB (1997) as Amended by Law No.(7) of 1371 PD(2003) for Promotion of Investment of Foreign Capitals,
Article (1)
Specifying the Investment Fields and its Conditions
Foreign Capital Investment shall be allowed for Libyan Arab citizens and
nationals of Arab and foreign citizens in the fields of industry, health,
tourism, agriculture, services in different kinds and other fields decided to
be, added by the General People's
Committee.
National capital possessed by normal personalities or legal personalities
may participate foreign capital in
investment in one of the following forms:-
a. Cash Participation.
b. In kind Participation.
c. Reinvested part of project profits
and returns.
Minimum value of investment project investment shall be (L.D. 5,000.000) Five million Libyan Dinars on conditioned that foreign capital cash participation shall be in an exchangeable currency.
In case of national capital participation in investment project with a percentage of (50%) fifty percent or more of project capital value, minimum value of investment project shall be (L.D. 2,000.000) Two million Libyan Dinars . National and foreign capital possessed by Libyan shall be excluded from the Minimum Condition.(1)
Article (2)
Estimation of Share in Kind
If the invested capital contains a share in kind, it’s cash value shall be estimated by consent of the parties of investment project.
(1)Amended by decision of General People’s Committee No. (86) of 1374 PD (2006).
Article (3)
The Applications for investment shall be submitted by the person concerned or his representative to the Secretary of People’s Committee for the Libyan Foreign Investment Board on a special Form, containing the following data:
- Applicant’s name, nationality, legal status and main domicile
- General description of the project, indicating specifically the proposed field of investment, and the necessary period for construction thereof, and nature, amount and units of invested capital.
The Applications may be submitted through the Commercial Attaches in the Fraternity and People’s Bureaus abroad or their deputies. Such bodies shall refer the applications immediately on submission thereof to the Board.
Article (4)
Documents Required for Investment
The applicant shall enclose with his file the following documents:
1- Memo on the project indicating the following:
a) Value and nature of capital to be invested in the Great Jamahiriya, estimated in a transferable currency or equivalent in Libyan currency at the time of application.
b) Imported and local materials, if any to be used in the project.
c) Technical specifications of the project.
d) A time table specifying the investment project construction period.
e) Estimated national and foreign manpower for operation of the project.
2- Certificate of the investor’s nationality, to be issued by the competent body in his country with respect to natural persons.
3- Up to date official extract from Commercial Register in the country of origin of the juridical person
The documents submitted for the project as indicated in paragraphs (2-3) shall be original and enclosed with translation into Arabic.
Article (5)
Data to be Indicated in the Receipt
The applicant shall be given a receipt for submission of the application, containing the following data: -
1- Number and date of submission of the application.
2- Applicant’s name, surname, nationality and title/capacity.
3- Name & signature of the official who received the application
4- Description of documents enclosed with the application.
5- The proposed field of investment.
Article (6)
Registration of Applications
The applications shall be recorded on delivery to the Board in a special register in serial numbers as per the dates of receipt thereof. Each application shall be kept in a special file including all relevant documents, papers and correspondence.
The application number, name, address and nationality, of the applicant and project name and sector proposed for investment therein shall be inserted on the outside cover of the file, and from outside, the papers and documents included therein shall be indicated, as well as the serial number, dates, number of pages and date of submission thereof.
Article (7)
Decision for Applications
The People’s Committee for the Board shall study the applications, and prepare the necessary recommendations and the relevant technical and administrative reports, indicating its opinion on the project, and services to the national economy, within a maximum period of (60) sixty days from the date of providing all documents required. The Board shall submit its proposal and recommendations to the Secretary of General People’s Committee for Economy and Trade for issuing the necessary decision.
Article (8)
Notification of the Applicant
The Secretary of the People’s Committee for the Board shall inform the applicant in writing by direct delivery or by registered letter of approval or rejection of the application of the investor by the Secretary, within ten days from the date of receipt by the Board of decision for approval or rejection or conditioned approval.
If approval is subject to a condition or more, the Secretary of People’s Committee for the Board shall indicate that and inform the applicant for fulfilling the requirements within a specific period. However, In case of consent, the Board shall issue the necessary license for investment, in coordination with the competent bodies in the Great Jamahiriya .so that the licenses issued by board covers for all required licenses under the effective legislations .
Article (9)
The investment project shall take any status as follows:
1- Joint-Stock companies
2- Companies with limited liability .
3- Branches of foreign companies
4- Individual project
It shall be registered with the Board under the procedures and rules indicated in this regulations. (1)
Article (10)
Establishment of Investment Register
A special register shall be prepared in the Board, to be called (The Investment Register) for recording therein all the projects obtaining investment licenses from the Board. A special page in this register shall be allocated for each project, indicating the following data:
1- Name of project, investment field, project activity and its site and main domicile.
2- Project capital value and paid up capital.
3- Names of investors in the project and their nationalities, and their respective contribution value and percentage in the project capital.
4- Name, surname, title/capacity and nationality of the legal representative.
5- Number and date of the decision for permission of investment.
6- Number and date of the license for execution and performing activity of the project.
7- Investment capital costs of the project and sources of financing thereof.
8- Description of exemptions granted to the project and their validity period, and other facilities privileges, as well as description of contravention and penalties issued against the project.
9- Description of participation in kind and in cash included in capital formation.
10- Any other data related to the investment project.
(1)Amended by decision of General People’s Committee No. (29) of 1373 PD (2005).
Article (11)
Registration in the Investment Register
The licensee shall submit to the Investment Register Office an application on the relevant Form prepared by the Board for recording him in the Register, together with the following documents: -
1- Memorandum & Articles of Association for the project which taking a status specified in Article (9) hereof or Memorandum & Articles of Association of mother company, if the project takes the form of branch for that Co., together with decision of Board of Directors for establishing the branch, and appointment of its General Manager and legal representative in the Great Jamahiriya.
If, however, the investor is a natural person, the data submitted thereby shall be sufficient for submission of the application for obtaining investment license.
2- Authorization document for function/power or power of attorney for management, as issued to the Project Manager or his legal representative, indicating clearly his powers & validity of authorization or power of attorney.
3- Specimen of signature of Project Manager or his representative in the Great Jamahiriya.
4- Certificate from relevant competent bodies, confirming bringing of the project capital or a part thereof into the Great Jamahiriya.
Registration in the Investment Register shall involve all legal effects of registration in the Commercial Register, including proof of juridical personality .
After providing all data and documents specified in this Article, the Investment Register Office shall issue to the person concerned a certificate proving his registration in the Investment Register in accordance with the Form prepared by the Board for this purpose.
Article (12)
Granting Certificates and Extracts
The Board shall grant the person concerned upon his request certificate or extract from the Commercial Register against payment of the specified fees.
Chapter Two
Privileges & Exemptions
Article (13)
Right of Import and Exemption from Customs Duties and Taxes
The investment project licensed for investment shall have the right to import the following:
a) All project requirements and necessities from abroad whether in form of building materials, furniture, machinery, equipment, transports means or tools necessary for executing the project, to be exempted from Customs duties, taxes and taxes of similar effect.
b) All project requirements and necessities from abroad in the form of equipment, spare parts or raw materials necessary for operation of the project, shall enjoy exemption from Customs duties and taxes and similar impact taxes for a period of five years, this period may be extended to further period of three years by a decision of Secretary of General People’s Committee upon submission by the secretary of the General People’s Committee of Economy and Trade.
The investment project shall enjoy exemptions indicated in paragraphs (a and b) of this Article under the following conditions:
1- The materials to be imported in the name and favour of the project.
2- The imported materials shall, in terms of quantity & quality, be compatible with the licensed investment field.
3- The investment license should be valid at the time of import.
4- Obligation to use such materials in the project and not to dispose thereof in any way to other bodies, unless a written permission is obtained from the Board.
In case of conse