Openness to, and Restrictions Upon, Foreign Investment
Libya continues to present a challenging investment climate. While Prime Minister Zeidan has strongly advocated for greater foreign investment, lingering concerns about the government’s control over armed groups across the country and its willingness to enact security sector reform worry companies seeking investment opportunities. Questions also remain about the government’s review of contracts signed prior to the revolution that began in February 2011 and whether or not these outstanding contracts will be honored.
New legislation also has significant implications for companies. Recent ministerial decrees preclude foreigners from establishing limited liability companies in Libya, though it is unclear if these decrees are enforceable since they conflict with existing laws. While foreign investors are allowed to form joint stock companies (JSC) with Libyan shareholders, the government has stated that no one, whether Libyan or foreign entity, can have more than a 10% shareholding in a JSC.
The Privatization and Investment Board (PIB), established in 1997 and supervised by the Ministry of Economy, serves as the main government agency responsible for encouraging the investment of foreign capital and promoting investment projects across the country. (PIB) chairman G.I. Guider has expressed interest in drafting a new investment law and would like to present it for approval to the General National Congress by September 2013. However, he has yet to disclose any details about how a new law would differ from current regulations.