Libyan foreign investment law

1. All-sector limitations on the entry of FDI including screening and prior approval procedures

General

Foreign investment is important to Libya not so much for the financial flows it brings but for the spill over effects in terms of know-how and access to export markets, among other benefits.
Full foreign ownership is permitted, in ventures established in the context of Law No. 5 and approved by the Foreign Investment Board.  
Foreign Investment Law 5 of 1997 amended in 2003 allows for investment in the following sectors: industry, health, tourism and agriculture, following the positive list approach.
The law 5 of 1997, modified by several decrees that followed, encourages investment of foreign capital in the areas that necessitate transfer of technologies, formation of Libyan technical cadre, and regional development. Foreign investment in the tourism sector is regulated by the law 7 of 6 March 2004 and its application decree 139 of 26 august 2004, which are similar to in spirit to Law 5.
 Furthermore, controls on outward direct investment are also in place.
Foreign participation in industrial ventures set up after May 20, 1970, is permitted on a minority basis, but only if it leads to increased production in excess of local requirements, introduction of the latest technology, and cooperation with foreign firms in exporting the surplus production.
Additionally, decree number 3 of 3 January 2005 regulates the establishment of a branch of a foreign company in Libya.

Approval and Screening Requirements

All foreign investments require approval by the Libyan Foreign Investment Board. Approval is granted for projects that lead to domestic job creation or training, use of local raw materials, transfers of technology, and inflows of foreign currencies.105 Licensees for investment of foreign capital are granted by the Board after issue of the decision for approval of the investment by the Secretary.

2. Limitations on foreign purchase of domestic shares (portfolio investment)

Specific information on limitations on purchase of debt or equity securities in Libya is not publicly available, although there are restrictions on capital and money market instruments for residents.
'

3. Restrictions on transfers abroad of the proceeds of the liquidation of a foreign direct investment

Foreign capital invested in projects deemed to contribute to the economic development of the country may be transferred freely to the country of origin. Capital invested in projects set up in the context of Law No. 5 and approved by the Foreign Investment Board, may also be transferred to the country of origin without restrictions. This Investment law regulates the investment of foreign capital brought in any of the following forms: 
'
 · Convertible foreign currencies or substitutes thereof in coming by official Banking methods.  · Machinery, equipment, devices, spares parts, and raw materials necessary for the investment project.  · Transport means unavailable locally. 
'
 · Intangible rights, such as patents, inventions, licenses, trademarks and commercial names necessary for construction or operation of the investment project.  
'
· The part reinvested from the project profits and revenues.  Investors have the right to re-export his invested capital in the following cases: expiry of the project period, liquidation of the project, sale of the project wholly or partly, elapse of a period not less than (5) five years from the date of issue of permits for investment. They also have the right to transfer back foreign capital in the same manner as it was brought after expiry of six months from the date of entry thereof if difficulties or conditions beyond control of the investor prevent investment thereof, and the net profits and benefits distributed and interests achieved by the project are allowed to be transferred annually abroad. All proceeds on of exports must be repatriated within three months of shipment.
'

4. Sectoral limitations to establishment of FDI, including reciprocity

No negative list available.
'

5. Acquisition of real estate for FDI purposes by foreign investors

As an exception to the effective legislations related to ownership, according to the Investment Law of 1997, the investor has the right to own land based on title of use and to rent it and construct buildings thereon and to own or rent the necessary real estate for construction or operation of the project under the terms and conditions specified in the executive regulations.
'

6. Exception to national treatment of foreign-controlled enterprises

No national treatment principle in the Investment law.
'

7. Performance requirements on foreign direct investors

The project is required to achieve all or part of the following: 
'
 · To produce commodities for export or contribute to increasing exports thereof or resulting in ending imports of commodities wholly or partly.  
'
· To provide opportunities for employment of Libyan manpower and to train them for gaining technical skills and experiences. The executive regulation shall specify the terms and conditions for employment of national manpower.  
'
· To use modern technology or trade mark or technical experience. 
'
 · To provide service for the national economy or contribute to improvement or development thereof.  
'
· To lead to strengthening the ties and integration between existent economic activities and projects or reduction of production costs or contribute to providing materials and operation necessities thereof. 
'
 · To utilise or assist in utilising local raw materials.  
'
· To contribute to development of remote economically underdeveloped areas.