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Executive Summary

Libya presents a challenging investment climate. Reconstruction needs, severely underserved consumer demand, and abundant natural resources provide many opportunities for domestic and foreign investors, and the Government of National Unity (GNU), which took office in March 2021, has expressed a strong desire to receive greater foreign investment and partner with foreign companies. Nonetheless, the country’s prospects for foreign investment continue to be hampered by security risks posed by the presence of non-state militias, foreign mercenaries, and extremist and terrorist groups, and opaque bureaucracy, onerous regulations, and widespread rent-seeking activity in public administration.  The Libyan government has a long history of not honoring contracts and payments, and several U.S. firms continue to be owed back payments for work done before and after the 2011 revolution. The sectors that have historically attracted the most significant investment into Libya are oil and gas, electricity, and infrastructure.

Following years of civil conflict, Libya’s warring parties signed a ceasefire in October 2020 that paved the way for a United Nations-facilitated political process that resulted in the country’s first unified national government since 2014. The GNU is an interim government charged with leading the country toward national elections that were scheduled for December 2021, but ultimately postponed. Since the postponement of elections Libya has entered a new period of political uncertainty that has slowed down any attempts to improve the business climate.

Libya holds Africa’s largest (and the world’s ninth largest) proven oil reserves and Africa’s fifth largest gas reserves.  Most government revenues derive from the sale of crude oil.  Libya’s oil production has been making a gradual recovery from repeated attacks on oil infrastructure by ISIS-Libya and other armed groups in 2016 and a nine-month forced shutdown in 2020 due to the civil conflict. Production has reached 1.2 million barrels per day (bpd) as of March 2022.  Technocrats heading the NOC, an independent, apolitical institution, continue to lay the groundwork for the long-term development and stabilization of the energy sector. The Ministry of Oil and Gas has attempted to exert political control over the NOC, at times complicating matters for companies working in the sector.

The Privatization and Investment Board (PIB), supervised by the Ministry of Economy, is the primary governmental body for encouraging private foreign investment in Libya.The Investment Law of 2010 provides the primary legal framework for foreign investment promotion. Passed prior to the 2011 revolution that toppled the Qadhafi regime, the law lifted many FDI restrictions and provided a series of incentives to encourage private investment. No significant laws related to investment have been passed since the revolution. No pandemic- or green-related measures have been instituted that can affect the investment climate.

Perceived corruption is deeply embedded in Libya and is widespread at all levels of public administration. The lack of transparency or accountability mechanisms in the management of oil reserves and revenues, the issuance of government contracts, and the enforcement of often ambiguous regulations continue to provide government officials with substantial opportunities for rent-seeking activities.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 172 of 180
Global Innovation Index N/A N/A
U.S. FDI in partner country (USD Millions, historical stock positions) 2020 341
World Bank GNI per capita (in USD PPP) 2020 11,250

Policies Towards Foreign Direct Investment

The Libyan government’s efforts to attract FDI, primarily through the PIB and NOC, are relatively recent. Until the 1990s, FDI was only permitted in the oil sector through sovereign contracts to which the state was a party. A number of foreign investment laws were passed in subsequent years to encourage and regulate FDI, culminating in “Law No. 9 of the year 1378 PD (2010) Regarding Investment Promotion” (known as the 2010 Investment Law). Though promulgated prior to Libya’s 2011 revolution, the law remains in effect. This new law lifted many FDI restrictions and provided a series of incentives to qualifying investments, such as tax and customs exemptions on equipment, a five-year income tax exemption, a tax exemption on reinvested profits and exemptions on production tax expert fees for goods produced for export markets. It also allowed for investors to transfer net profits overseas, defer losses to future years, import necessary goods, and hire foreign labor if local labor was unavailable. Foreign workers may acquire residency permits and entry reentry visas for five years and transfer earnings overseas.

The law regulates the establishment of foreign-owned companies and the setting up of branches in representative offices. Branches are allowed to be opened in a large number of sectors, including: construction for contracts over LYD 50 million; electricity works; oil exploration; drilling and installation projects; telecommunications construction and installation; industry; surveying and planning; installation and maintenance of medical machines and equipment; and hospital management. However, the investment law restricts full foreign ownership of investment projects to projects worth over LYD 5 million, except in the case of limited liability companies, and requires 30 percent of workers to be Libyan nationals and to receive training. Foreign investors are prevented from owning land or property in Libya and are allowed only the temporary leasing of real estate. Investment in “strategic industries” – in particular, Libya’s upstream oil and gas sector, which is controlled by the NOC – requires a foreign entity to enter into a joint venture with a Libyan firm that will retain a majority stake in the enterprise. It is not clearly defined which industries other than upstream oil and gas may be considered strategic.

The most important investment promotion institution Libya is the PIB, established in 2009 to assume responsibility for the Libyan privatization program and oversee and regulate FDI activities. The PIB’s screening process for incoming FDI to Libya is not clearly defined; the bidding criteria and process for investment are not published or transparent, and it is therefore not clear whether foreign investors have faced discrimination. The PIB states that it reviews bids or proposals for general consistency with Libya’s national security, sovereignty, and economic interest. The Minister of Economy must give final approval to all FDI projects, at the recommendation of the PIB. There is no information available on the timeline of the approval process or any potential outcomes of the process other than an affirmative or negative decision by the PIB or Minister of Economy. The PIB maintains that it keeps all company information confidential. U.S. firms have repeatedly expressed frustration about the slow pace by which the Libyan government makes business-related decisions. Despite these complaints, some U.S. firms have successfully invested in Libya, particularly in the country’s oil and gas sector.

Limits on Foreign Control and Right to Private Ownership and Establishment

The ownership of real estate in Libya is restricted to Libyan nationals and wholly-owned Libyan companies. The 2010 Investment Law permits the ownership of real estate in Libya by locally established project vehicles of foreign investors. However, such ownership is limited to leasehold ownership only. Foreign investors are allowed lease property from public holdings and private Libyan citizens, according to Article 17 of the 2010 Investment Law. There is considerable ambiguity in both the public and private rental markets; many aspects of these arrangements are left to local officials.

Other Investment Policy Reviews

Libya has not undergone any recent investment policy reviews by the OECD, UNCTAD, WTO, or any other international body. Civil society groups have not expressed nor provided any useful reviews of investment policy-related concerns. However, in July 2021, the UN-sponsored audit of the CBL was released to the stakeholders; the audit did include a number of top-level recommendations such as. Please refer to Section 6: Financial Sector – Money and Banking System for more details. Moreover, the Libya Investment Authority is currently being audited by an international accounting firm.

Business Facilitation

Business registration procedures in Libya are lengthy and complex. The Ministry of Economy is the main institution for processing business registration requirements. The Libyan government does not maintain an online information portal on regulations for new business registration or online registration functionality for registering a new business. There are multiple corporate structures based on the type of business undertaken (e.g. limited liability, joint venture, branch office) and each has specific registration requirements. Some requirements apply to all businesses, including: obtaining a Commercial Register certificate, registering with the Chamber of Commerce and the tax and labor departments, and obtaining a working license. If a company will be importing items, a statistical code will be required. If the company will be obtaining letters of credit in Libya, a Central Bank code will be required. A specialized agent must complete these tasks on behalf of the registering company. For the simplest corporate structure (limited liability with no Central Bank code) the process can take two to three months if the registration agent is familiar with the procedures.

Outward Investment

Libya is a member of the Islamic Corporation for the Insurance of Investment and Export Credit, which provides investment and export credit insurance for entities in member states. FDI outflows in 2020 were USD 205 million, compared to USD 2.7 billion in 2010. The Libyan government does not formally promote or incentivize outward investment. Stress in the banking sector has reduced liquidity, and this has negatively affected the ability of Libyan citizens to acquire the hard currency to invest abroad. The advent of a unified exchange rate in January 2021 has, however, facilitated international flow to a certain degree.

Libya has signed 39 Bilateral Investment Treaties (BIT), most notably with the following countries: Turkey, Italy, France, and Egypt. Detailed information can be found here: 

Libya has also signed 10 Double Taxation Treaties (DTT) with the following countries: Algeria, Belarus, Egypt, India, Italy, Kuwait, Malta, Pakistan, Singapore, Sudan, Saudi Arabia, Tunisia, and the United Kingdom.

Libya is a signatory to the following three multi-lateral Free Trade Agreements (FTA): Greater Arab Free Trade Area (GAFTA), Arab Maghreb Unions (AMU), and African Continental Free Trade Area (AFCFTA, but has not yet ratified the treaty). Libya also has bilateral FTAs with Morocco and Jordan.

Libya does not have a BIT, DTT, or FTA with the United States, but signed a Trade and Investment Framework Agreement (TIFA) with the United States in December 2013 that the Libyan government ratified in February 2019. There is positive momentum for advancing the TIFA with Libya.

Libya is not a signatory nor a jurisdiction collaborating on the implementation of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS).

Transparency of the Regulatory System

The Libyan regulatory system lacks transparency, and there is a general lack of clarity regarding the function and responsibilities of Libyan government institutions. Transparency International placed Libya 172 out of 180 countries (“1” indicates least corrupt) in its 2021 Corruption Perceptions Index, and Libya ranked 186 out of 190 on the most recent edition of the World Bank’s ‘Ease of Doing Business’ Index. Libya’s bureaucracy is one of the most opaque and amorphous in the Middle East region; its legal and policy frameworks are similarly difficult to navigate. The issuance of licenses and permits is often delayed for significant periods for unspecified reasons, and the adjudication of these applications is most often done in a subjective and non-transparent fashion. This has created an environment ripe for graft and rent-seeking behavior.

Neither ministries nor regulatory agencies publish the text or summary of proposed regulations before their enactment. Accurate, current information about key commercial regulations is difficult to obtain. These factors serve as a deterrent to foreign investment.

Libya does not promote or require companies to disclose environmental, social, and governance information in order to promote transparency. Libya scores zero out of five (with five being the best) in the World Bank’s Global Indicators of Regulatory Governance.

International Regulatory Considerations

Libya is not a member of the WTO. The WTO received Libya’s application on June 10, 2004. The General Council established a Working Party on July 27, 2004, but no formal progress on Libya’s application has been made.

Legal System and Judicial Independence

The 2011 Constitutional Declaration currently functions as the interim constitution. It states Islam is the state religion and sharia is the principal source of legislation. The Libyan civil code begins with a preliminary title containing general dispositions regarding law, sources of law, application of the law, and general dispositions regarding the legal definition of persons as well as the classification of things and property. Thereafter, the code is divided into two parts and four books. The first part addresses obligations or personal rights and contains similarly named subdivisions: Book I (Obligations in General) and Book II (Specific Contracts).  The second part of both codes is entitled “Real Rights” and contains Books III (Principal Real Rights) and Book IV (Accessory Real Rights). In the absence of a legal provision, the Libyan civil code requires courts to adjudicate matters “in accordance with the principles of Islamic law.”  In the absence of an Islamic rule on a particular matter, the Libyan civil code requires courts to look to “prevailing custom,” and in the absence of any custom, “to the principles of natural law and the rules of equity.”

Article 89 of the Libyan Civil Code states that “a contract is created, subject to any special formalities that may be required by law for its conclusion, from the moment that two persons have exchanged concordant intentions.”  The Libyan court system consists of three levels: the courts of first instance; the courts of appeals; and the Supreme Court, which is the final appellate level. Libya’s justice system has remained weak throughout the post-revolutionary period, and enforcement of laws remains a challenge for the government.

Laws and Regulations on Foreign Direct Investment

Laws and regulations on investment and property ownership allow domestic and foreign entities to establish business enterprises and engage in remunerative activities. Investment law and commercial law differ in their foreign ownership restrictions for business enterprises. Article 7 of the 2010 Investment Law specifies, in general accordance with standard international practice, conditions a project must fulfill in part or in full in order to qualify as an investment rather than a commercial vehicle. Investment projects that meet the conditions set out in the 2010 Investment Law enjoy a number of benefits, such as relief from income taxes for a set number of years. Further, a foreign investor may wholly own the enterprise if the foreign investment exceeds LYD 5 million. This is reduced to LYD 2 million if a Libyan partner holds at least half of the investment. For investment projects that do not meet the conditions set out in the 2010 Investment Law, these benefits do not apply and Libya’s Commercial Code stipulates no more than 49 percent foreign ownership unless the enterprise is a branch of a foreign company, which the foreign company can then fully own.

Competition and Antitrust Laws

Chapter 11 of the Libyan Commercial Code deals with the issue of competition and prohibits market abuse. The Commercial Code provides for the establishment of a Competition Committee to be responsible for reviewing complaints and investigating them and, in cases where the law has been violated, referring the cases to public prosecution. There is not an active Competition Committee at the moment, and since these issues are regulated by law and considered violations, interested/damaged parties can pursue legal action directly.

Expropriation and Compensation

Article 23 of the 2010 Investment Law provides an express guarantee against the nationalization, expropriation, forcible seizure, confiscation, imposition of receivership, freeze or subjection of procedures of similar effect, except by virtue of a law or court ruling and fair and equitable indemnity, and provides such procedures be applied indiscriminately. Article 43 of executive regulation No. 449 of 2010 implementing the law reinforces those provisions. The Libyan government’s history of state expropriation of private property, including the assets of foreign companies, most prevalent during the 1980s, had already been in decline before the law’s passage. There have been no reports of nationalizations or expropriations under the current investment law.

Dispute Settlement

ICSID Convention and New York Convention

Libya is not a signatory to either the International Center for Settlement of Investment Disputes (ICSID or also known as the Washington Convention) or the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (known as the New York Convention) and has not taken steps to accede to either. However, arbitration awards issued by arbitrators in foreign jurisdictions can be enforced in Libyan courts. In the case of commercial disputes, most foreign entities currently opt to try cases before the International Chamber of Commerce, whose judgments Libya has a history of respecting. Libya is a member of the 1983 Riyadh Convention on Judicial Cooperation, which facilitates recognition and enforcement of judgments and arbitral awards among the Arab member states.

Investor-State Dispute Settlement

Libya is not a signatory to a treaty or investment agreement in which binding international arbitration of investment disputes is recognized. Article 24 of the 2010 Investment Law mandates disputes initiated by a foreign investor or the state be settled by competent Libyan courts, unless there is an agreement between Libya and the state to which the investor is subject that includes provisions for alternative arbitration procedures.

International Commercial Arbitration and Foreign Courts

The Libyan Civil Code provides for the enforcement of foreign decisions or arbitral awards if they meet the following requirements: the decision must be issued from a competent authority, according to the laws of the country of origin of the decision; the parties must have been duly summoned to appear before the court that handed down the decision and must have been duly represented (the laws of the foreign country also apply in terms of summons to and presence before the court); the decision must not contradict decisions already issued by Libyan courts; and the decision must not include anything that conflicts with the principles of public order in Libya. Libya’s justice system remains weak, making enforcement of foreign judgments and arbitral awards through the Libyan courts challenging and lengthy.

Bankruptcy Regulations

Libya does not have a separate bankruptcy law, but bankruptcy issues are covered under articles 1012 and 1013 of the 2010 Commercial Code. According to this legislation, bankruptcy proceeds in two phases. The first is preventative reconciliation, during which the debtor attempts to rectify the financial situation of the business through an agreement with creditors under court supervision. The second phase commences in the event of the agreement’s failure, whereby the court intercedes to protect the rights of the creditors through liquidation. Libya is tied for last for ease of resolving insolvency in the World Bank’s most recent ‘Ease of Doing Business’ index.

Investment Incentives

Investments set up according to the 2010 Investment Law benefit from the following incentives: tax and customs exemptions on equipment, a five-year income tax exemption, a tax exemption on reinvested profits and exemptions on production tax expert fees for goods produced for export markets. It also allowed for investors to transfer net profits overseas, defer losses to future years, import necessary goods, and hire foreign labor if local labor is unavailable. The government does not offer any additional investment incentives.

Foreign Trade Zones/Free Ports/Trade Facilitation

Libyan Law Number 215 of 2006 established the Zuwara Free Trade Zone (ZFTZ), and Law Number 495 of 2000 (amended by Law Number 32 of 2006) created the Misrata Free Trade Zone (MFTZ). Both the ZFTZ and the MFTZ are overseen by the Libya Free Trade Zone Board, created by Law Number 168 of 2006. By law, the ZFTZ and MFTZ are financially and administratively independent, and are free to legislate “within the boundaries of Libyan law.” Foreign companies can apply for a license to operate in the free FTZs and enjoy the same benefits as Libyan companies.

Performance and Data Localization Requirements

The host government does not follow forced localization. The 2010 Investment Law mandates that 30 percent of a foreign-owned company’s workforce consist of Libyans. Exemptions are available if the required skills for a position are not available on the local labor market.

U.S. citizens traveling to Libya on business visas require an invitation from/sponsorship by a company operating in Libya. Obtaining a Libyan business visa regularly requires several weeks or months. There is anecdotal evidence of enhanced vetting of U.S. citizen visa requests by Libyan authorities. Libyan Embassies in third countries have followed varying rules and procedures regarding the issuance of visas, but all visa applications require approval by the Libyan Ministry of Foreign Affairs. Libyan law prohibits using a tourist visa to travel to Libya for business purposes. The Government of Libya does not allow persons with passports bearing an Israeli visa or entry/exit stamps from Israel to enter Libya. Further information can be found in the Consular Information Sheet for Libya at the State Department website The 2010 Investment Law grants investors the right to a residence permit for a period of five years, subject to renewal if the project continues.

Real Property

Libyan property rights are complicated by past government policy actions and a weak regulatory environment. The Libyan government eliminated all private property rights in March 1978 and eliminated most private businesses later in the same year. The renting of property was illegal, and ownership of property was limited to a single dwelling per family, with all other properties being redistributed. Reduced rate “mortgages” were paid directly to the Libyan government, but many Libyans were exempted from these payments based on family income. This process, and destruction of official documents that followed several years later, has served to greatly complicate any subsequent effort to prove clear title to property throughout Libya. Post-revolutionary governments have made little progress on improving the situation. As a consequence of the ambiguity of property ownership, banks are reluctant to take property as collateral for loans until property disputes are resolved. Libya is tied for last place for ease of registering property in most recent edition of the World Bank’s ‘Ease of Doing Business’ index.

Intellectual Property Rights

Article 1286 of the 2010 Commercial Code covers a set of rules which seek to protect intellectual innovations and the non-material aspects of industrial and commercial projects. It prohibits infringement of trademarks and transgression on registered trade names and logos; bans all acts of forgery, trademark or local counterfeiting, and all forms of intellectual property violations; and outlines the nature of financial and criminal procedures against those violations. The law provides for enforcement of the rules regulating registered industrial designs and models as well as information systems. Some additional laws providing protection of intellectual property rights (IPR) have been passed, such as Law No. 7 of 1984 and Law No. 8 of 1959 on patents, commercial designs, and models. The trademark office in the Ministry of Economy is responsible for enforcing the law of consumer and intellectual property protection, but trademark violations are widespread, especially in the retail sector, and enforcement generally requires a specific legal claim. U.S. brands remain vulnerable to such activity.

While Libya is in the process of applying for entry to the WTO, it is not currently a member, and thus is not a party to TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights). The IMF has asked Libya to bring its IPR regime in line with international best practice.

Resources for Intellectual Property Rights Holders:

Peter Mehravari
Patent Attorney
Intellectual Property Attaché for the Middle East & North Africa
U.S. Embassy Abu Dhabi | U.S. Department of Commerce U.S. Patent & Trademark Office
Tel: +965 2259 1455  

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at  

Capital Markets and Portfolio Investment

The Libyan government passed a law in 2007 to establish a stock market, primarily to support privatization of SMEs, but it is not well-capitalized, has few listings, and does not have a high volume of trading. Capital markets in Libya are underdeveloped, and the absence of a venture capital industry limits opportunities for SMEs with growth potential and innovative start-ups to access risk financing for their ventures.

Money and Banking System

Libya has been attempting to modernize its banking sector since before the revolution, including through a privatization program that has opened state-owned banks to private shareholders. The Central Bank of Libya (CBL) owns the Libyan Foreign Bank, which operates as an offshore bank, with responsibility for satisfying Libya’s international banking needs (apart from foreign investment). The banking system is governed by Law No. 1 of 2005, as amended by Law No. 46 of 2012 on Islamic banking. In accordance with that amendment, Law No. 1 of 2013 prohibits interest in all civil and commercial transactions. The banking modernization program has also been seeking, among other components, to establish electronic payment systems and expand private foreign exchange facilities.

The CBL is responsible for the receipt of all of Libya’s oil revenues, prints Libyan dinars, and controls the country’s foreign exchange reserves. After being effectively divided since 2014 between its eastern and western branches as a result of the civil conflict, the CBL officially began the process of reunification in January 2022. Based on UN-sponsored audit report conducted by an international accounting firm and completed in July 2021, the CBL is seven work streams to incorporate top-level recommendations such as: strengthen financial accountability and transparency, assess process for letters of credit, adopt widely accepted accounting standards for financial reporting, establish effective governance and internal controls, reconcile the two branches’ balance sheets, unify the ledger system of the two branches, and unify organizational structure, operations, resource needs, and plans. The CBL has put in place seven work streams aimed at incorporating these recommendations.

The CBL in Tripoli controls access to all foreign currency in Libya, and it provides Libyans access to hard currency by issuing letters of credit (LCs). Access to LCs in Libya has historically been an issue, but in January 2021, the CBL set a single, unified foreign exchange rate (described in the next section). This has increased importers’ access to hard currency at stable levels.

The availability of financing on the local market is weak. Libyan banks can only offer limited financial products, loans are often made on the basis of personal connections (rather than business plans), and public bank managers lack clear incentives to expand their portfolios. Lack of financing acts as a brake on Libya’s development, hampering both the completion of existing projects and the start of new ones. This has been particularly damaging in the housing sector, where small-scale projects often languish for lack of steady funding streams. Libya tied for last on the ease of getting credit in most recent edition of the World Bank’s ‘Ease of Doing Business’ index.

Libya boasts 19 commercial banks, the largest of which are majority-owned by the CBL, and four specialized banks. The six largest banks hold 90 percent of the system’s assets and loans, whereas it is estimated that 30 percent of all cash in Libya is not within the formal banking system. In total, the banking system employs 20,000 persons.

Foreign Exchange and Remittances

Foreign Exchange

The 2010 Investment Law provides investors the right to open an account in a convertible currency in a Libyan commercial bank and to obtain local and foreign financing. The Libyan Banking Law (Law No. 1 of 2005) allows any Libyan person or entity to retain foreign exchange and conduct exchanges in that currency. Libyan commercial banks are allowed to open accounts in foreign exchange and conduct cash payments and transfers (including abroad) in foreign currency. Commercial banks operating in Libya may grant credit in foreign exchange and transact in foreign exchange among themselves.

The Central Bank set a single, unified official exchange rate of 4.48 LYD/USD in January 2021. Previously, the official rate was 1.4 LYD/USD for the purposes of government procurement, while private entities were charged roughly 3.7 LYD/USD by the Central Bank. Entities engaging in foreign exchange must be licensed by the Central Bank. Foreign exchange facilities are available at most large hotels and airports, and ATMs are becoming more widely available. The importation of currency must be declared at time of entry. The Central Bank’s Decree No. 1 of 2013 regulates foreign exchange, including by specifying authorities for the execution of foreign transfers, and by prescribing limits on the transfer of currency abroad for different public and private entities.

Most firms seeking to receive payment for services/products in Libya operate using letters of credit (LC) facilitated through foreign banks (often based in Europe). Foreign energy companies remitting large sums often make arrangements for direct transfers to accounts offshore. Although the unified exchange rate simplified trade decisions, the LC approval process remains, however, opaque, often resulting in delayed payments.

Remittance Policies

The 2010 Investment Law allows for the remittance of net annual profits generated by an investment and of foreign invested capital in case of liquidation, expiration of the project period, or insurmountable impediments to the investment within the first six months. The CBL foreign exchange fee of 163 percent was eliminated in January 2021 with the introduction of the unified exchange rate.

Sovereign Wealth Funds

Libya maintains a sovereign wealth fund called the Libya Investment Authority (LIA). UN Security Council Resolution 1970 (2011) froze many of the LIA’s assets outside Libya. The freeze on the LIA’s assets is intended to preserve Libya’s assets through its post-revolutionary transition for the benefit of all Libyans. An evaluation of the LIA’s assets in 2019 put their value at USD 69 billion. The international community and private consultancies continue to provide technical assistance to the LIA to help it improve its governance, including adherence to the Santiago Principles, a set of 24 widely accepted best practices for the operation of sovereign wealth funds: the LIA is now compliant with 17 of the 24 best practices. The LIA is also currently undergoing an audit by an international auditing firm. The LIA comes under sporadic political pressure to make administrative and human resources changes to favor certain political actors.

The Libyan state is responsible for approximately 85 percent of economic activity in the country. On the periphery of the governmental apparatus, state-owned enterprises (SOE) dominate economic life. The largest are the National Oil Company (NOC), the Libyan Post, Telecommunication, and Information Technology Company (LPTIC), and the General Electricity Company of Libya (GECOL). The state is also involved in the following sectors: commercial banks, cement, transportation, airlines, construction, and oil and gas.

Privatization Program

The PIB is responsible for matters related to privatization of state-owned enterprises (SOEs). All enterprises in Libya were previously state-owned. Except for the upstream oil and gas sector, no state-owned enterprise is considered to be efficient. The state is deeply involved in utilities, oil and gas, agriculture, construction, real estate development and manufacturing, and the corporate economy.

Libya has gone through three previous phases of privatization, the latest between 2003 and 2008 during which 360 SOEs ranging from small to large in various sectors were either fully or partially privatized or brought in private partners through public-private partnerships. However, restrictions to individual shares and foreign ownership – individual investors’ share of the capital was restricted to 15 percent and local ownership had to be 30 percent – limited interest in the privatization program. Accusations of fraud further discouraged investments. Nonetheless, the food industry, healthcare, construction materials, downstream oil and gas, and education sectors are now partially or fully privatized. Fragile governments and lack of security since 2011 have impeded implementation of further privatization programs.

There is not a general awareness of, expectation of, or standards for responsible business conduct (RBC) in Libya, nor of businesses’ obligation to proactively conduct due diligence to ensure they are doing no harm (including with regards to environmental, social, and governance issues). The Libyan government has not taken measures to define or encourage RBC, such as promoting the OECD or UN Guiding Principles on Business and Human Rights or establishing a national contact point or ombudsman for stakeholders to get information or raise concerns about RBC. As far as domestic laws exist in relation to human rights, labor rights, consumer protection, environmental protections, and other laws/regulations intended to protect individuals from adverse business impacts, the capacity of the government to enforce these laws is very limited.

Libya is not a signatory of the Montreux Document on Private Military and Security Companies, and is not a participant in the International Code of Conduct for Private Security Service Providers’ Association (ICoCA).

Additional Resources

Department of State

Department of the Treasury

Department of Labor

Climate Issues

Libya does not have a well-defined national climate strategy. The government has not yet introduced any meaningful policies to reach net-zero carbon emissions by 2050. Moreover, Libya has not yet announced its Nationally Determined Contribution to the UN relevant authority. Libya scores in the bottom three of 148 countries as to efficient and sustainable resource use according to the Global Green Growth Institute.

Although Libya is a signatory to the Paris Climate Accords, it has not yet ratified the accord. Libya also signed the Global Methane Pledge during the COP26 in the United Kingdom. Libya recently reactivated the Renewable Energy Authority of Libya (REAL), which has communicated its plan to include renewable energy sources to contribute 22 percent of power generation by 2030; renewable energy sources currently contribute zero percent of power generation.

Foreign firms have identified corruption as an obstacle to FDI; corruption is pervasive in virtually all sectors of the economy, especially in government procurement. Officials frequently engage with impunity in corrupt practices such as graft, bribery, nepotism, money laundering, human smuggling, and other criminal activities. Although Libyan law provides some criminal penalties for corruption by officials, the government does not enforce the law effectively. Internal conflict and the weakness of public institutions further undermine enforcement. No financial disclosure laws, regulations, or codes of conduct require income and asset disclosure by appointed or elected officials.

The Libyan Audit Bureau, the highest financial regulatory authority in the country, has made minimal efforts to improve transparency. The Audit Bureau has investigated mismanagement at the General Electricity Company of Libya that had lowered production and led to acute power cuts. Other economic institutions such as the Ministry of Finance and the Central Bank published some economic data during the year.

Libya has signed and ratified the UN Anticorruption Convention. It is not party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Resources to Report Corruption

Akram Bannur
General Secretary
National Anti-Corruption Commission of Libya
+218 91 335 8583  

Contact at a “watchdog” organization (international, regional, local or nongovernmental organization operating in the country/economy that monitors corruption, such as Transparency International):

Ibrahim Ali
Libyan Transparency International

There is a significant recent history of politically-motivated damage and seizure by force of economic infrastructure and installations, particularly in the oil and gas industry. Most recently, forces allied with Libyan National Army Commander Haftar forced the near-total shutdown of Libya’s energy sector in January 2020, which was eventually lifted in September 2020. The October 2020 ceasefire and the peaceful transfer of power in March 2021 to a unity government has markedly reduced the civil disturbances that had been a daily occurrence. However, militias also shut down Libya’s largest oil field in December 2021. Moreover, due to the postponement of elections (scheduled for December 2021), the political scene is further complicated by questions regarding the tenure of the current interim prime minister, as the House of Representatives nominated a new interim prime minister in February 2022, who to date has not been able to take power. As a result of this instability, rival armed groups have continued to jockey for control over the country’s political institutions and economic resources, which means that insecurity and instability remains a cause for concern.

Libya’s labor market is characterized by a dominant public sector that employs 85 percent of the active labor force in the Libyan economy, according to the World Bank. Just four percent of the labor force works for private firms. The Libyan labor market has many skilled workers with high levels of education, but high public sector wages and benefits result in outsized expectations among job seekers, particularly among the highly-skilled. The World Bank has estimated Libya’s unemployment rate to be around 20 percent, and youth unemployment to be around 50 percent – numbers that, given the already bloated public sector, indicate a lack of private sector jobs for skilled and unskilled Libyans. The World Bank also noted significant “mismatches” between the skills Libyan degree holders possess and those demanded by foreign and domestic employers in Libya. The 2010 Investment Law permits investors to hire foreign workers when national substitutes are not available.

The law does not provide the right for workers to form and join independent unions. Formal sector workers are automatically members of the General Trade Union Federation of Workers but can opt out on request. Foreign workers are not permitted to organize. Workers are permitted to bargain collectively, but the law stipulates that cooperative agreements must conform to the “national economic interest,” thus significantly limiting collective bargaining. The government has the right to set and cut salaries without consulting workers. According to Freedom House, some trade unions formed after the 2011 revolution, but they remain in their infancy, and collective-bargaining activity was severely limited due to the ongoing hostilities and weak rule of law. There is no data available about the prevalence of collective bargaining, or about the effectiveness of labor dispute or arbitration services.

Workers may call strikes only after exhausting all conciliation and arbitration procedures. Over the past year, employees organized spontaneous strikes, boycotts, and sit-ins in a number of workplaces. The government or one of the parties has the right to demand compulsory arbitration, though state penalties for noncompliance were not sufficient to deter violations.

The law does not criminalize all forms of forced or compulsory labor.  Article 425 of the penal code criminalized slavery and prescribed penalties of five to 15 years’ imprisonment. Article 426 criminalized the buying and selling of slaves and prescribed penalties of up to 10 years’ imprisonment.  However, other forms of forced labor were not criminalized.  The government did not effectively enforce these laws, and the resources, inspections, and penalties for violations were not commensurate with those prescribed for other serious crimes such as kidnapping. There have been numerous anecdotal reports of migrants and IDPs being subjected to forced labor by human traffickers. The informal economy, largely composed of migrants, is concentrated in the agricultural, construction, and domestic help sectors. Private employers have sometimes used detained migrants from prisons and detention centers as forced labor on farms or construction sites; when the work was completed or the employers no longer required the migrants’ labor, employers returned them to detention facilities.

The law prohibits children younger than 18 from being employed except in a form of apprenticeship. It was unclear whether child labor occurred, and no information was available concerning whether the law limits working hours or sets occupational health and safety restrictions for children. It was not clear whether the government had the capacity to enforce compulsory or child labor laws, nor was it clear whether non-enforcement of these laws posed a commercial risk to investors.

Neither DFC or USEXIM operate in Libya, and there is no OPIC agreement between Libya and the United States.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount  
Host Country Gross Domestic Product (GDP) ($Million USD) 2020 N/A 2020 25,000
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country (USD Millions, stock positions) 2020 N/A 2020 341 BEA data available at
Host country’s FDI in the United States (USD Millions, stock positions) 2020 N/A 2020 Zero BEA data available at
Total inbound stock of FDI as % host GDP N/A N/A N/A N/A UNCTAD data available at

Table 3: Sources and Destination of FDI
Data not available.

Pedro Campo-Boué
Economic and Commercial Officer
U.S. Embassy to Libya, Libya External Office
Tunis, Tunisia
+216 58 539 035

On This Page

  1. Executive Summary
  2. 1. Openness To, and Restrictions Upon, Foreign Investment
    1. Policies Towards Foreign Direct Investment
    2. Limits on Foreign Control and Right to Private Ownership and Establishment
    3. Other Investment Policy Reviews
    4. Business Facilitation
    5. Outward Investment
  3. 2. Bilateral Investment and Taxation Treaties
  4. 3. Legal Regime
    1. Transparency of the Regulatory System
    2. International Regulatory Considerations
    3. Legal System and Judicial Independence
    4. Laws and Regulations on Foreign Direct Investment
    5. Competition and Antitrust Laws
    6. Expropriation and Compensation
    7. Dispute Settlement
      1. ICSID Convention and New York Convention
      2. Investor-State Dispute Settlement
      3. International Commercial Arbitration and Foreign Courts
    8. Bankruptcy Regulations
  5. 4. Industrial Policies
    1. Investment Incentives
    2. Foreign Trade Zones/Free Ports/Trade Facilitation
    3. Performance and Data Localization Requirements
  6. 5. Protection of Property Rights
    1. Real Property
    2. Intellectual Property Rights
  7. 6. Financial Sector
    1. Capital Markets and Portfolio Investment
    2. Money and Banking System
    3. Foreign Exchange and Remittances
      1. Foreign Exchange
      2. Remittance Policies
    4. Sovereign Wealth Funds
  8. 7. State-Owned Enterprises
    1. Privatization Program
  9. 8. Responsible Business Conduct
    1. Additional Resources
    2. Climate Issues
  10. 9. Corruption
    1. Resources to Report Corruption
  11. 10. Political and Security Environment
  12. 11. Labor Policies and Practices
  13. 12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs
  14. 13. Foreign Direct Investment Statistics
  15. 14. Contact for More Information
2022 Investment Climate Statements: Libya
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