What are the objectives of the Law and the fields allowed for investment ?

1. What are the objectives of the Law and the fields allowed for investment ? • The Law No( 9 ) for direct foreign investment aims at promotion of investment of foreign capitals for construction of investment projects within the framework of the general policy for the state, and Socio-Economic Development objectives, especially the following: • Transfer of modern technology. • Building up Libyan technical elements. • Diversification of income sources. • Contribution to development of national products to help in entry into the international markets. • To achieve regional development .

2. What is the role of the Privatization and Investment Board in applying the law? • The Law specified in thereof establishing the Privatization and Investment Board, entrusting it with the task of applying the law and specifying its functions in Article (6) mainly the following: • Study and proposal of the plans for regulating foreign investment and supervision of foreign investments in the country. • To receive applications for investment of foreign capitals, and specifying their fulfillment of the legal conditions and economic feasibility of the investment project. • Taking the means for attraction of foreign capitals and providing the investment opportunities by the various means.

3. What are the conditions to be fulfilled by the investment project? The project shall fulfill all or part of the following: • Production of commodity for export or contribution to increasing the exports therefrom, or resulting in dispensing with import of commodities wholly or partly. • Providing employment places for the Libyan manpower and training thereof for gaining the technical skills and experience. • Using modern technology, trade mark or technical expertise. • Providing service required by the national economy or contribution to improvement or development thereof.

4. Supporting the ties and integration between existent economic activities and projects or reducing the production costs or contribution to providing operation materials and necessities thereto. • Utilizing or assistance in utilizing local raw materials. • Contribution to development of remote or economically underdeveloped area.

5. What are the fields allowed for investment therein? It is allowed for investment in the following fields: • Industry, Health, Tourism, Services, Agriculture, and any other field specified by decision of General People’s Committee upon submission of the Secretary.

6. What are the privileges and exemptions granted by the Law for the investment project? The projects constructed under this Law shall enjoy the following privileges: • Exemption of the machinery, equipment and devices necessary for executing the project from al customs duties and taxes of similar effect. • Exemption of the logistics, spare parts and raw materials necessary for operation of the project from all fees and taxes of similar effect for a period of five years. • Exemption of the project from income taxes on its activity for a period of five years from the date of starting production or work, as per the nature of the project. This period may be extended to additional period of three years. The profits resulting from the project shall enjoy such exemptions, if reinvested.

7. Exemption of the export-oriented commodities from production tax, and as well as from the fees and taxes imposed on export thereof. • Exemption of the project from the stamp duty on the commercial writs and documents used thereby. • The project constructed in regional development areas or contributing to achievement of food security or using equipment as would achieve savings in energy or water or environmental protection shall enjoy the exemptions indicated in paragraphs (b, c) of Article (10) of this Law for on additional period by decision of General People’s Committee.

8. What are the rights guaranteed by the Law for the foreign investor? From among the most important rights specified are the following: • Opening of Bank accounts in favour of the project in local currency, and has the right to open an account in transferable currency with Commercial Bank or Libyan Arab Foreign Bank. • The right to transfer the net profits distributed and interests achieved by the project annually to abroad. • The right to own lands for use and to lease them or construct buildings thereon, as well as owning and lease of the necessary real estates for construction or operation of the project. • The right to employ foreigners, if the national substitutes are unavailable.

9. The right to carry forwards the losses incurred by the project during the exemption years to subsequent years. • The right to transfer ownership of the project from one investor to another wholly or partly.

10. The right to return the invested capital to abroad in the following cases: • Expiry of the project period. • Liquidation of the project. • Selling the project wholly or partly • Elapse of time period not less than five years from the date of issue of license for investment.

11. What are the guarantees by the Law for the investment project? • It is not allowed to nationalize, expropriate or posses the project compulsorily or confiscate it or impose guardianship or conservation, freezing or subjection thereof 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 shall be calculated on the basis of the fair market value of the project. It is allowed for transfer of the compensation value in transferable currencies within a period not exceeding one year at the prevailing exchange rates at the time of transfer.

12. What are the documents required for investment? • Application for approval of construction of investment project (Form prepared by the Board). • Memo on the project including the following: • Capital value to be invested in Libya, and its nature, assessed by a transferable currency or its equivalent in Libyan currency on submission of the application. • Imported and local materials, if any, to be used for the project. • Technical specifications of the project (Technical designs and maps / plans). • Site documents: (Sketch, site photo / Google Earth, indicating the surrounding area, ownership certificate, lease contract).

13. Program or schedule specifying the project construction period. • Estimated national and foreign manpower for operation of the project. • Needs of the project for energy (Electricity, Gas and Water).

14. Legal agreement approved between the constituents, including authorization of a partner or their representatives for finalizing the procedures for approval of the project. • Deposit voucher in the Board account or certified cheque in the value of (LD 200) (Two hundred Libyan Dinars) against submission of application for construction of investment project. • Deposit voucher in the Board account or certified cheque in the value of (LD 300) (Three hundred Libyan Dinars) against submission of application for operation, management or development of investment project (in case of existent project). • Negative certificate for the project after obtaining approval.

15. Document of Foreign Partner • Certificate of the investor’s nationality, to be issued by the competent body in his country with respect to the natural person. • Up-to-date official extract from the registration page in the Commercial Register in the original country of the artificial person. • Memorandum and Articles of Association of mother company (in case of joint investment + company’s branch). • Decision of Board of Directors of the Company for opening a branch for the company in Libya. • Consent of all partners on entry into the investment under Law No. (9).

16. Documents of national partner • Photocopy of Identity Card of the natural person. • Certificate of registration in the Commercial Register • Copy of Memorandum and Articles of Association of the Partnership or Company. • Consent of all partners on entry into the partnership with the foreign partner.

17. Remarks regarding the foreign partner’s documents • The documents shall be only accepted after approval and authentication thereof by the Fraternity or Libyan Arab People’s Bureau in the country, where the investor resides or the Main Office of the project exists abroad. • All documents submitted to the Bard shall be original and translated officially into Arabic Language. • All documents required shall be provided within a period not exceeding (60) sixty days from the date of submission of the application.

18. What is the time period for approval? • The executive regulation for Law No. (9) specified decision for the applications within a maximum period of (60) sixty days from the date of providing the required documents. Then, the Board will refer its proposal and recommendations to the Secretary of General People’s Committee for Economy, Commerce and Investment for issuing the necessary decision.

19. Manner of specifying the project capital, advantage of participation and number of shareholders • The capital of investment project is specified under Decision No. (86) of 2007 for amendment of certain provisions of the executive regulation for Law No. (9) in the amount of (LD 5,000,000) (Five million Libyan Dinars) provided that participation of the foreign monetary capital shall be in a transferable currency. In case of participation of national capital of the investment project at the rate of (50%) or more of the project capital, the minimum value of the investment project capital shall be (2,000,000) (Two million Libyan Dinars).

20. What is the legal status taken by the project constructed under the Investment Law, and the number of shareholder in the project? The investment project shall take any of the following forms: • Joint-stock companies. • Limited liability companies. • Branches of foreign companies. • Individual project. • As to the number of shareholders, it will be as per agreement of the participant and investing parties in the project.

21. What is the procedures before approval of the project • The application shall be recorded in special register (Investment Application Register) in serial numbers, as per the dates of receipt thereof. Each application shall be kept in a special file for depositing all relevant documents, papers and correspondence. • The documents will be revised by Investment Affairs Section, in cooperation with the Legal Affairs Office regarding provision of documents and data. • The data and information on the project will be emptied in the information card of the Board, to be presented to the technical and economic team. • The file will be returned to the Director of Investment Department for seeing the project, and expressing any remarks or directives in this respect.

22. The file will be referred to the technical and economic team for studying the project. • Then, the information card on the project will be referred to the Office of Committee’s Affairs, for inclusion thereof in the agenda of the Management Committee. • The information card will be seen by the Secretary of Management Committee for the Board for expressing any directives or remarks.

23. Afterwards, the investment project will be presented to the Management Committee for expressing opinion and recommendation for approval of the project or not as follows: • For approval, decision for approval should be issued • Approval under conditions Disapproval • The project will be referred to the Technical Committee for Investment Projects for expressing opinion on the project. • Minutes of meeting of Management Committee will be prepared by the Committee’s Affairs Office, to be approved by Secretary of Management Committee for the Board, and refer it to Secretary of General People’s Committee for Economy, Commerce and Investment for issuing decisions for approval of the projects agreed upon.

24. What is the procedures after approval of the project • After issue of decision for approval, it will be referred to the applicant in writing by direct delivery or by registered letter with acknowledged receipt, within ten days from the date of receipt of the Board for the decision, including the necessary documents to be provided for establishing the legal status of the project, as specified, including the following: • Legal status of the project (Memorandum and Articles of Association) if it takes the status of company, and attestation thereof by Tax Department, or Memorandum and Articles of Association of mother company, if the project takes the status of branch for that company, together with decision of Board of Directors for establishing the Branch, and appointment of its General Manager and legal representative in Libya.

25. If, however, the investor is a natural person, it will be sufficed by the data submitted thereby in the application for obtaining license for investment. • Certificate of depositing (10%) in cash of the capital value in the project account. • Technical description of the project site, to be approved by the competent bodies (in case of being inside the plan). • Cadastral certificate for lease / rent contract for the real estate to be used for the purpose of the project activity. • Certificate from the competent bodies that the use of the land on which the project will be constructed would not contradict the urban plans approved, nor the project site would cause damage to the environment or natural, tourist or agricultural resources (in case of being outside the plan).

26. Detailed schedule as necessary for executing the project (as per its kind). • Deposit voucher in the Board account or certified cheque in the value of (LD 3600) and (LD 3,000) against fees for license for construction of • investment project and (LD 500) against registration in the Commercial Register, and (LD 100) against obtaining extract form the Register. • Deposit voucher in the Board account or certified cheque in the value of (0.1%) of the total investment costs against propaganda and advertisement fees in the local and international forums and providing all necessary services through the unified window, and technical and legal contacts and follow-up with the Board.

27. After finalizing the procedures for establishing the legal body for the project by the investor and fulfilling all documents required for obtaining the license for construction of investment project and registration in the Investment Register (Application Form prepared by the Board). • The project file will be referred to the Follow-up Section for performing visit and submission of report. • The investor will be granted license for construction of investment project, to be recorded in the Investment Register and granting him extract from the Register (for enjoying the necessary privileges and exemptions).

28. The investor shall start the procedures for executing the project and preparation and import of all the project needs and necessities from abroad, whether in the form of building materials, furniture, machinery, equipment, transport means or necessary devices for executing the project, as needed, whether furnishings, spare parts or raw materials necessary for operation of the project.

29. After completion of construction stage, the investor shall submit to the Board Management an application for obtaining a license for performing the project activity. After ascertaining completion of construction stage and fulfilling the necessary documents, the permission shall be granted to the investor for starting the activity, and granting license for performing investment project activity, after fulfilling these documents represented in the following: • Evaluation of the project assets for specifying the preliminary project costs (Enclosed Form prepared by the Board). • List of national and foreign manpower in the project, indicating their specializations and experience. • Deposit voucher in the Board account or certified cheque in the value of (LD 1,000) against fees for license for performing investment project activity.

30. The Supervision and Follow-up Section shall follow-up the projects during operation periods regarding applying the provisions of Law No. (9) for promotion of investment of foreign capitals. • The Investors Service Section shall provide all facilities for the investor and the project, especially facilitating the granting of visas and residence for the investors and foreign manpower, as well as the procedures for approval of clearance of machinery, equipment and raw materials, etc. imported for the project. • The investor shall submit final balance sheet annually, approved and specifying the profits / looses and transfer of (5%) of the project profits at the end of each fiscal year.