LIBYA Law and Practice Contributed by: Salaheddin El Busefi, Heba Gedwar and Mahmud Zahaf, Zahaf & Partners
• transfer and localisation of modern knowl - edge, technology, or intellectual property; • integration with existing economic projects, reduction of production costs, or contribution to the supply chain; • utilisation or support in the exploitation of local raw materials; • development of remote or underdeveloped regions; • production of export goods or reduction of reliance on imports; • improvement, development, or rehabilitation of essential services for the national econo - my; and • creation of job opportunities for Libyan nationals, with a minimum local workforce participation of 30%, alongside providing training and technical skill development for Libyan employees. While Law No 9 opens most sectors to foreign investment, certain industries, specifically the exploration, extraction and marketing of oil and gas, remain restricted. Other sectors may be subject to additional regulatory requirements depending on the nature of the activity. 2.2 Procedure and Sanctions in the Event of Non-Compliance Under Law No 9 (2010), obtaining an investment licence in Libya involves a two-stage approval process. The first stage grants permission for the investment to be undertaken, while the second stage provides authorisation to carry out the investment in practice. Each approval stage necessitates the submission of specific documentation, which generally includes the investment plan, budget confirmation, technical approvals, and project timetables, statement of workforce and payment of required fees. Inves - tors should bear in mind that it can take up to
three months for an investment company to be set up from the date of the application. All commercial activities, including investing in Libya, cannot be carried out without first obtain - ing an approval. Conducting activities without a licence or approval will result in financial pen - alties for operating without authorisation, as stipulated under the Commercial Code. In cas - es where an entity is established without proper approval, or based on incorrect or incomplete information, criminal sanctions, including impris - onment, apply under the Penal Code. While there are instances where businesses operate without formal approvals, this approach carries significant legal, operational, and reputa - tional risks. In addition, foreign investors and their staff must comply with Libya’s immigration regulations. Any foreign national entering Libya to conduct work must obtain a valid work permit and be spon - sored by a registered company under invest - ment law or other legal framework. Entering the country under a tourist or other non-work visa does not authorise the individual to engage in business activities. Violations of these require - ments result in fines, detention, or deportation. 2.3 Commitments Required From Foreign Investors For the myriad of incentives and exemptions afforded to investors under the Investment Pro - motion Law, authorities have a list of commit - ments they expect in return. Aside from the man - datory minimum capital of LYD5 million, these commitments include: • transferring knowledge and technology; • contributing to the production or reduction of costs of ongoing projects;
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