LIBYA Law and Practice Contributed by: Salaheddin El Busefi, Heba Gedwar and Mahmud Zahaf, Zahaf & Partners
1. Legal System 1.1 Legal System and Judicial Order Libya primarily operates under a civil law system, with the Libyan Civil Code and Commercial Code serving as the cornerstone of civil and commer - cial affairs. However, there is also an emphasis on case law precedent at the Supreme Court level, where the bearing of its judgments and rulings over all courts and entities is enshrined in legislation. The Libyan codified system is predominately derived from the Egyptian legal system, sharing much in common with the Egyptian civil code. There are also influences from the French, Italian and Ottoman systems of old that have histori- cally shaped legal procedures. Currently, together with its mainly codified sys - tem, Islamic Sharia law also plays a vital role in the Libyan legal system, particularly in areas of family law and matters concerning estates and wills. The Libyan judiciary takes the form of a four-tier court system: summary courts, courts of first instance, courts of appeal and the Supreme Court. Each court tier is competent to hear both civil and criminal matters within its circuit, although serious criminal cases are reserved for the appellate courts. The courts are organised by locality, with each court of first instance also having a summary court within its jurisdiction. 2. Restrictions on Foreign Investments 2.1 Approval of Foreign Investments Foreign investors can enter the Libyan mar - ket in several ways. They may partner with a
Libyan national to establish a joint venture, or, if they have an existing foreign entity abroad, they can open a branch office in Libya, both of which require prior approval from the Ministry of Economy and Trade under Resolution No 207 of 2012, which governs foreign participation in joint ventures, branches, and representative offices. In addition to these options, Libyan legislation provides a distinct route for foreign investors through Law No 9 of 2010 on Investment Promo - tion. This law allows 100% foreign ownership of investment projects, along with a range of com - mercial incentives, including: • a five-year exemption from taxes and stamp duties; • exemption from customs duties on the impor - tation of machinery, equipment, and goods related to the project, as well as for exports; • full repatriation of net profits; • the ability to access financing from local banks; • the right to re-export invested capital if the project is terminated or unrealised within six months of approval; and • eligibility for a renewable residence permit valid for no less than five years. To operate under Law No 9, foreign investors must obtain an investment licence from the Pri - vatisation and Investment Board (PIB), the sole authority responsible for granting approvals. This approval must be secured prior to conduct - ing any investment activities in Libya. The criteria for approving investment projects are outlined in Law No 9. To be eligible, the pro - ject must achieve some or all of the following objectives:
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