Click Here To Get Law No 5

 

Investment Law
 

This law aims at promotion of investment of foreign capital for construction of investment projects within the framework of the general policy of the State and the objectives of economic and social development, particularly as follows:

 Ø            Transfer of modern technology .

Ø            To build up Libyan technical cadres .

Ø            Diversification of income sources .

Ø            Contribution to development of national products to assist in entry thereof into the international markets .

Ø            To achieve regional development
  • In realizing by the Great Jamahiriya for importance of direct foreign investment, it enacted Law No (5) of 1997 for promotion of investment of foreign capital.
  • This law came into force on 29 May 1997, and its executive regulation was issued on The same year.
  • The Law aims at promotion of investment of foreign capital owned by Libyans, Arabs and foreigners for investment in the Great Jamahiriya.
  • Limited amendment was introduced into this law by Law No. (7) of 2003, thus enabling the national capital assessed in Libyan Dinar to participate in construction of investment projects together with foreign capital .
 
 

Permissible Investment Fields:

  
   The Investment Law aims at promotion of direct foreign investment in the fields of (Industry, Agriculture, Health, Tourism and Services). Decision of General People’s Committee No. (108) of 2005 specified the detailed fields allowed for investment therein as follows:
  1. Agricultural, industrial and services projects
  2. Oil refining and petrochemicals industry
  3. Electric power generation
  4. Communication services
  5. Real estate and infrastructure investment projects
  6. Tourist project.
 

Incentives Provided by the Law to Foreign Investors

  

  • Exemption of the machinery, equipment and devices necessary for construction of the project from all Customs duties, fees and taxes of similar effect.

  • Exemption of furnishings, spare parts and raw materials necessary for operation of the project from all Customs duties and taxes imposed on import and other taxes of similar effect for a period of (5) five years.

  • Exemption of the project from income tax on its activity for a period of (5) five years from the date of starting the project. This period may be extended to an additional period of (3) three years. The profits accrued from the project also enjoy such exemptions, if re-invested.

  • Exemption of export-oriented commodities from Production Tax, and taxes and fees imposed on export in case of exporting them.

  • Exemption of the project from stamp duty / tax specified for Commercial writes and documents used thereby.

 

Rights Guaranteed by the Law for the Investor

  

  • Opening of Bank accounts in the name of the project in local and foreign currency

  • Transfer of net profits and interest achieved by the project, as declared for distribution annually

  • Ownership of lands for use and the right to rent lands and construction of buildings thereon and to own and rent the necessary real estates for construction and operation of the project.

  • The right to carry forward the loss incurred by the project during the exemption years to subsequent years.

  • Assignment of ownership of the project and transfer of ownership to another investor wholly or partly.

  • Return of the invested capital to abroad in the following cases:

  1. Expiry of the project period

  2. Selling the project wholly or partly

  3. Elapse of period not less than (5) five years from the date of issue of license for investment

  4. Liquidation of the project.

  • The investor may also re-transfer his capital to abroad in the same way of entry thereof, after elapse of (6) six months form the date of entry thereof, if conditions beyond control of the investor prevent investment thereof.

  • Import of all necessities for the project from abroad, whether building materials, furniture, machinery, equipment, transport means or equipment necessary for construction of the project or spare parts and necessary raw materials for operation of the project, enjoying the specified exemptions.

  • Export of the project products to outside the Great Jamahiriya, whether raw or intermediary materials or prepared for direct consumption, enjoying exemption from production Tax and export taxes with respect to the exported products.

  • The investor has the right to recruit the necessary foreign technical manpower and expertise for construction and operation of the project when substitutes of Libyan citizens are unavailable

The foreign employees under written contracts may transfer their salaries and wages and other financial privileges or gratuities there to

 

Guarantees Provided by the Law
Under the provision of Article (23) of the Law, it is not allowed to nationalize the project or expropriate its ownership or compulsory possession thereof or imposing custody, conservation or freezing thereon or subjecting it to procedures having the same effect, unless by law or judicial verdict against prompt and fair compensation, provided that such procedures shall be taken indiscriminately. The compensation will be calculated on the basis of fair market value of the project in taking the procedure. It is allowed to transfer the compensation value in transferable currencies within a period not exceeding one year at exchange rates prevailing at the time of transfer
 
Settlement of Disputes
Under the provision of Article (24) of Investment Law (Any dispute arising between the foreign investor and the State, either by action of the investor or resulting from procedures taken against him by the State shall be presented to the competent Counts in the Jamahiriya, unless there is bilateral agreement between the Jamahiriya and the country to which the investor belongs or multi-lateral agreements in which the Jamahiriya and the country of the investor are parties, including provisions for conciliation or arbitration or special agreement between the investor and the State, providing for arbitration condition)