LIBYA Law and Practice Contributed by: Salaheddin El Busefi, Heba Gedwar and Mahmud Zahaf, Zahaf & Partners
3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity Commercial companies in Libya are broadly divided into two categories: partnerships (per - son-based companies) and capital companies. The most commonly used forms are capital companies, especially limited liability compa - nies (LLCs) and joint stock companies (JSCs). In addition, joint ventures, branches, and rep - resentative offices are also frequently used for foreigners. Below is an overview of the key types and their characteristics. Joint-Stock Companies (JSCs) Main characteristics and governance Joint stock companies are capital-intensive enti - ties best suited for large-scale business ven - tures, including public offerings or greenfield projects. Shareholders are only liable up to the value of their capital contribution. • Minimum Shareholders: Ten • Shareholding Limit: No natural person may own more than 10% of the company’s capital. • Minimum Share Capital: LYD100,000 • Capital Payment: At least 30% must be paid at incorporation; the remainder within five years. Governance structure Libyan commercial law provides for a three-tier governance system in joint stock companies, comprising: • The General Assembly: This includes all shareholders and functions as the supreme authority in the company. It is divided into: (a) Ordinary General Assembly: This assem - bly handles routine matters, such as approving annual reports, appointing
• exploiting and using local raw materials; • developing remote areas; • producing a commodity for export that would reduce reliance on importing that commodity; • offering services required by the national economy; and • committing to employ a local Libyan labour force of at least 30% and providing them with training and expertise This list can be fulfilled in whole or in part, mean - ing that in practice an investor can fulfil those commitments that are reasonably more feasible for their project. 2.4 Right to Appeal Investors have the right to challenge any deci - sion issued under the Investment Law, including the rejection of an investment application or the revocation of an existing approval. The investor may submit a formal written appeal to the Pri - vatisation and Investment Board (PIB) within 30 days of being notified of the decision. The PIB is required to review the appeal and take the necessary steps to resolve the matter within 30 days of receiving the complaint. During this period, the investor may be asked to provide additional clarifications, with the aim of reach - ing an amicable solution. Filing an appeal with the PIB does not affect the investor’s right to pursue the matter before the Libyan courts. If the dispute is not resolved administratively, the investor may initiate legal proceedings to challenge the decision under the general rules of administrative litigation. The courts have jurisdiction to review the legality of the decision and whether the authorities acted within their powers.
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