Investment Law No. 5

Article 1 Article 2 Article 3 Article 4 Article 5 Article 6 Article 7 Article 8 Article 9 Article 10

Article 11 Article 12 Article 13 Article 14 Article 15 Article 16 Article 17 Article 18 Article 19 Article 20

Article 21 Article 22 Article 23 Article 24 Article 25 Article 26 Article 27 Article 28 Article 29

Article 1  

The aim of this law is to attract investment of foreign capital in investment projects within the framework of the general policy of the state and of the objectives of economical and social development and in particular:

-       Transfer of modern technology

-        Training the Libyan technical personnel

-        Diversification of income resources

-        Contribution of the development of the national products so as to help in their entry into the international markets.

-        Realization of a locale development

 

This law shall apply to the investment of the foreign capital held by libyans and the nationals of Arab and Foreign States in investment projects.

 

In the application of this law, Unless the context otherwise requires, the following words and phrases shall have the meaning assigned each:

1.     Jamahyria means The Great Socialist People’s Libyan Arab Jamahyria.

2.     The law means The law of Foreign Capitals Investment Encouragement.

3.      The Secretary means The Secretary of the General People’s Committee for Planning, Economy and Commerce.

4.      Authority means Libyan Foreign Investment Board

5.      The Executive Regulation means The Regulation issued for the implementation of the provisions of this law.

6.      The Foreign Capital means the total financial value brought into the Great Jamahyria whether owned by Libyans or foreigners in order to undertake an investment activity.

7.     Project means Any economic enterprise established in accordance with this law the result of its work is the production of goods for end or intermediate consumption, or investment goods, or the export or provision  of service , or any other enterprise approved as such by the General people’s Committee.

8.      Investor means Any natural or juridical entity national or non-national, investing in accordance with the provisions of this law

 

This law regulates the investment capital brought into the Jamahyria in any of the following forms:

-       Convertible foreign currencies or substitutes thereof brought through official banking methods

-       Machinery, equipment, tools, spare   parts and the raw materials needed for the investment project.

-       Transport means that are not locally available.

-       Intangible rights; such as Patents , licenses , trade marks and commercial names needed for the investment project or operation thereof.

-       Reinvested part of the profits and returns of the project. 

The Executive Regulation Shall regulate the manner for the evaluation of the in kind portions used in the formation of the capital designated for investment in the Jamahyria .

 

There shall be established an Authority to be known as “ Libyan Foreign Investment Board ” having its own independent juridical

Personality, under the jurisdiction of the General people’s Committee for planning, Economy and Commerce. The Authority shall be established by a decision From the General People’s Committee upon a proposition by the Secretary stating the Authority’s legal domicile, its secretary and members of its management committee.

The Executive Regulation shall regulate the meeting of the administrative procedures required for establishing Project.

 

The Authority Shall work for the encouragement of foreign capital investment and promotion for the investment projects by various means; in particular it shall:

1.    Study and propose plans to organize foreign investment and  

     Supervise foreign investment in the country.

2.    Receive the applications for foreign capital investment to determine whether they satisfy the legal requirements, and the feasibility study for the project and then submit its recommendations to the Secretary accordingly.

3.     Gather and publish information and conduct economic studies relevant to the potentials of investments in the projects that contribute to the economic development of the country.

4.     Take proper actions to attract foreign capitals and promote the chances of investment through various means.

5.    Recommend exemptions, facilities or other benefits for the projects that are considered important for the development of the national economy, or recommend the renewal of the exemptions and benefits as provided for in the law for further periods of time. It shall submit its recommendations to the relevant authority.

6.     Consider without prejudice to the right of the investor to petition and litigate complains, petitions or disputes lodged by the investors resulting from the application of this law.

7.     Study and review periodically the investment legislations, propose improvement thereof and submit same to the concerned authority.

8.     Perform any other functions assigned to it by the General People’s Committee.

 

The project is required to realize all or some of the following:

      -  Production of goods for export or contribution to the increase of

          Export of such goods or substitute imports of goods in total or in part.

-       Make available positions of employment for libyan manpower, train and enable some to gain technical experience and know-how. The Executive Regulation shall set the conditions and terms of employment of libyan manpower.

-       Use of modern technology or a trademark or technical expertise.

-       Provision of a service needed by the national economy or contribute to the enhancement or development of such service

-       Strengthen the bounds and integration of the existing economic activities and projects or reduce the cost of production or contribute in making available materials and supplies for their operations.

-       Make use or held in making use of local raw materials.

-       Contribute to the growth and development of the remote or underdeveloped areas.

 

Investment is permissible in the following areas:

   -   Industry

   -   Health

   -   Tourism

   -   Services

   -   Agriculture

And any other area determined by a decision from the General People’s Committee according to a proposal from the Secretary.

 

The permit for foreign capital investment shall be granted by the Authority after the issuance of the Secretary’s decision approving the investment.

 

Project established within the framework of this law shall enjoy the following benefits

A) An exemption for machinery, tools and                 

                 Equipment required for execution of the same impact.

2nd)         An exemption for equipment, spare parts and primary materials required for the operation of the project, from all custom duties and custom taxes imposed on imports as well as other taxes of the same impact for a period of five years.

3rd)  Exemption of the project from the income taxes on its activities for a period of five years as from the date of commencement of production or of work, depending on the nature of the project this period shall be extendable by an additional duration of three year by a decision from the General people Secretary. Profits of the project will enjoy these exemptions if reinvested. The investor shall be entitled to carry the losses of his project within the years.

4th)   Goods directed for export shall be exempted

From excise taxes and from the fees and taxes imposed on exports when they are exported.

         E) The project shall be exempted from the stamp duty tax imposed   

                  on commercial documents and bills used .

Exemptions mentioned in paras A,B, and D of this Article do not include the fees imposed in consideration of services such as harbour, storage and handling dues .

 

Equipment ,  machinery ,  facilities , spare parts and primary materials imported for the project may neither be disposed of through sale or abandoned without the approval of the Authority and after payment of custom duties and taxes imposed on importation thereof ; nor be used for purposes other than those licensed therefore .

 

The investor shall have the right to:

A) Re-export invested capital in the following cases:     

-       End of the project’s period.

-        Liquidation of the project.

-        Sale of the project in whole or in part.

-        Elapse of a period of not less than five years as of the issuance of the investment permits.

B) Re-transfer the foreign capital abroad in same form   

     In which it was first brought in cases where  

     Difficulties or circumstances out of the investor’s  

     Control prevent its investment.

C) It is permissible to transfer annually the net of the 

     Distributed profits realized by the project and interest thereof.

D) The investor has the right to employ foreigners 

      Whenever the national substitute is not available.

-       The foreign employees who come from abroad the right to transfer aboard a percentage of their salaries and wages and any other benefits or rewards given to them within the framework of the project

-        Conditions and terms regarding the implementation of this Article shall be set by the Executive Regulation.

 

 

 

 

 

 

-       Deprive the project from some of the benefits provided for in this Law.

-        Oblige the investor to pay double the exemptions granted to him.

 

-        Failure to start or complete the project in accordance with the terms and conditions set by the Executive Regulation;

-        Violation of the general provisions of this law and Executive Regulation;

-        Repetition of violations.

All in accordance with the procedures specified by the Executive Regulation.

 

 

-       Maintain regular books and records for the project.

-       Prepare an annual budget and profit and loss account audited by a chartered accountant as per the conditions set forth in the Commercial Law.