How to Establish a Presence in Libya and Fields of Activities Allowed for Foreigners

With the great economic potentials that Libya has, it quickly became one of the preferred markets for investment in North Africa.

After the unrest, the Libyan market has demonstrated many investment opportunities, especially in sectors such as Oil & Gas, Construction and telecommunication.

If you are a foreign entity and wish to establish a presence in Libya, then you have come to the right place. Fares Group has the experience and expertise, and would be more than happy to assist you by providing you with the full support throughout the process, from the guidance regarding the options available to you, and the requirements needed up to activating your entity in the country and obtaining the necessary licensing.

As such, many companies who left the country back in 2011 or after are seeking to renew their presence there; yet, multiple factors must be considered in this regard as summarised hereafter.

The Forms of Legal Presence

In general, and based on its activity, as a foreign entity you will be able to practise your business and set up your legal presence in Libya by one of the following options:

• Establishing a Branch: To be wholly owned by the Mother company abroad;
• Establishing a Joint Venture Company: Whereby the foreign entity may own up to 49% shares;
• Establishing a Representative Office: This entity form is not permitted to engage commercial activities. It is used for marketing and scouting purposes;
• Concluding an Agency Agreement with a Local Agent: It grants the opportunity to sell in the market its own products;
• Registering under the Provisions of Investment Law: It grants a broad range of advantages;
• Registering a company in the Free Zone: Ensuring tax reliefs and facilitations.

What Activities can the Foreign Investor Conduct in Libya?

The Libyan Commercial Code No. 23 of 2010, along with the Ministry of Economy Decree 207 of 2012 and the Libyan Investment Law No. 9 of 2010, are the main sources regulating the incorporation of foreign entities in Libya and the permissible activities.

The permissible activities for foreigners were divided into general sectors, including:

• Contracting and Civil Works Sector;
• Electricity Sector;
• Oil & Gas Sector;
• Environment Protection Sector;
• Health Sector;
• Technical Consulting, Studies, Training and Supervising.

As well as:

• Communication Sector;
• Industry Sector;
• Survey & Planning Sector;
• Computer & IT Sector;
• Air Transport Sector.

Each of the above sectors includes certain activities that are permissible to conduct by foreigners. As for the activities that are prohibited to be practised by foreigners in Libya, these include:

• Retail and Wholesale Trade;
• Catering Services;
• Land Transport Services;
• Inspection Activity on all Imported and Exported Commodities and Goods;
• Legal, Financial and Audit Works as well as Financial, Economic and Legal Consultation;
• Stone Crushing (Breakers).

Any other fields whose exercise is limited to the Libyans by virtue of special laws:

• Importation Activities;
• All Types and Fields of Commercial Agency Activities;
• Activity of Handling, Shipment and Discharge in the Airports;
• Packing and Packaging Activity;
• Contracting and Civil Works, including the Activity of Construction and Building with regards to the Contract where the value is less than thirty million (30,000,000) Dinars.

The current Libyan government, as one of its objectives and methods to support the local economy, is encouraging foreign investors who are seeking to extend their business to Libya, and has confirmed on many occasions that it will seek to facilitate the arrangements and processes for foreign companies.

Yet, the registration process in Libya is very detail-orientated and requires the right expertise in order to be concluded hassle-free and with the least expense and minimal time frame that is possible.

Fares Group team, with its extensive expertise in the Libyan market (and upon receiving your request and the activities you wish to conduct), will advise you of the best option available to you, and may suggest tailored solutions that match your needs.

Our team on the ground will fully support the process of registration and keep you posted with the progress. They will help you in preparing the required documents and meeting the necessary legalisation at the country – and will represent you before the local authorities until the licences are acquired.

Contact us now via cm@fareslegal.com for more information.