Libya is encouraging investment opportunities to foreign firms and making reforms reforms to make the business environment more attractive for foreign investors.
The government passed the Foreign Investment Law 9 of 2010 (previously Law 5 of 1997) and the Free Trade Act in 1999. The Free Trade Act in 1999 includes tax incentives and allows for the transfer of project ownership, the re-export of employed capital, and the hiring of foreign workers, while also creating a specialized agency to promote and supervise the law. As for the Free Trade Act, it enables the establishment of offshore free-trade zones in order to enhance exports, revenue, training, and technology in land, water, energy, telecommunications, and manufacturing facilities
The Government has promulgated Investment Promotion Law No. 9/2010 to encourage the investment of foreign capital. This Law aims at attracting foreign capital within the country’s framework of the general policy and the objectives of economic and social development, particularly to:
- Assist the transfer of modern technology
- Build up Libyan technical cadres
- Accelerate the diversification of income sources
- Encourage the development of national products to infuse these into the internal markets, and
- Achieve regional development.
The law is applicable to the investment of foreign capital emanating from foreign sources and from foreign capital owned by Libyan Arab citizens. Investment is being targeted in the following areas:-
- Any other field specified by a decision of the General People’s Committee upon recommendation of the Secretary.
The taxation policy in respect of the projects undertaken within the scope of the Law No. 9/2010 is as follows:
- The project shall be exempted from income tax for a period of five years from the date of commencement. This period may be extended for an additional period of three years. Losses incurred during the exemption years can be carried forward to the subsequent years.
- The project shall be exempted from stamp duty specified on commercial contracts and documents.
Exemptions mentioned above shall not include the fees relating to services such as port, storage and handling fees.
Libya has decided from 1 August 2005 to remove customs duty on more than 3500 commodities imported into the country with the exception of 81 items. This is aimed at liberalizing trade together with protecting local products.
Goods which will not be exempted from customs duty are luxurious cars or others that compete with locally assembled items including refrigerators, TV sets and agricultural items.
The Libyan Foreign Investment Board (L.F.I.B.)
It processes applications under the incentives package scheme and acts as a liaison between investors and the government. The L.F.I.B. provides full information to promoters that wish to consider investment in Libya. Both the Initial inquiries and subsequent applications for the setting up of these projects are processed by the L.F.I.B.
The Government promulgated Law No. 9 of 1430 (2000 A.D) effective 1 March 2000 for organizing transit & free zones. This was done to promote the transit trade and various manufacturing or processing operations that change the condition of goods or their preparation as required for exchange and market. It also includes the provision of banking, insurance, investment services and other services of all kinds.
The Free Zones are exempted from tax, customs, commercial and monetary restrictions for all those investing therein and achieving the purposes of the Free Zones.