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Despite the high potential for domestic and foreign investment in Libya due to its reconstruction needs, unmet consumer demand, and rich natural resources, the country still faces a difficult investment environment. The Government of National Unity (GNU), which came to power in March 2021, has shown an interest in attracting more foreign investment and collaborating with foreign companies. However, the country’s foreign investment prospects remain hindered by threats from non-state militias, foreign mercenaries, and extremist and terrorist groups. Investment is also constrained by an unclear bureaucracy, complications resulting from the division of state institutions, burdensome regulations, and widespread corruption in public administration. In addition, as seen/claimed in/by X, the Libyan government has a long track record of not complying with contractual obligations and timely payments. The sectors that have historically received the most significant investment in Libya are oil and gas, electricity, and infrastructure.

Following years of civil unrest and armed 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. Following the postponement of elections originally scheduled for December 2021, the Government of National Unity (GNU) continued to govern the country on an interim basis, although its influence was limited outside of Tripoli and certain areas in the northwest. In February 2023, UN Special Representative for the Secretary General (SRSG) Abdoulaye Bathily announced the launching of a new initiative to finalize a legal basis for elections, with the goal of holding elections by the end of 2023.

Libya holds Africa’s largest (and the world’s ninth largest) proven oil reserves and Africa’s fifth largest gas reserves.  Hydrocarbon exports contribute approximately 97 percent of government revenue.  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, a nine-month forced shutdown in 2020, and a fourth-month partial shutdown in 2022. Production has reached 1.2 million barrels per day (bpd) as of March 2023.  The National Oil Corporation (NOC), an independent, apolitical institution, continues 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 main legal framework for promoting foreign investment is the Investment Law of 2010. This law was passed before the 2011 revolution that overthrew the Gaddafi regime Yand removed many FDI restrictions and offered various incentives to stimulate private investment. No significant laws related to investment have been enacted since. There are no measures related to the pandemic or green issues that have an impact on the investment climate.

According to Transparency International and numerous well-informed local contacts, corruption is deeply rooted in Libya and is prevalent at all levels of public administration. The lack of clear and accountable mechanisms for managing oil reserves and revenues, awarding government contracts, and implementing often vague regulations continue to give government officials ample opportunities for rent-seeking and corrupt activities.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2022 171 of 180
Global Innovation Index N/A N/A
U.S. FDI in partner country (USD Millions, historical stock positions) 2021 254
World Bank GNI per capita (in USD PPP) 2021 8,700

Policies Towards Foreign Direct Investment (FDI)

The Privatization and Investment Board (PIB) and National Oil Corporation (NOC) are the main avenues via which the Libyan government has recently attempted to entice FDI. Up until the 1990s, only sovereign agreements to which the state was a party allowed FDI in the oil sector. In order to promote and control FDI, Law No. 9 of 2010, commonly known as the Investment Law, was passed and remains in force. The law is still in force even though it was passed before the 2011 revolution in Libya. This law lifted many FDI restrictions and offered incentives to qualifying investments, including tax and customs exemptions on equipment, a five-year income tax exemption, a tax exemption on reinvested profits, and exemptions from production tax export fees for goods produced for export markets. It also enabled investors to transfer net profits overseas, postpone losses to future years, import necessary goods, and hire foreign labor if local labor was unavailable. For five years, foreign workers can obtain residency permits and reentry visas, as well as transfer earnings overseas.

The Investment Law sets the rules for the creation of foreign-owned companies and the opening of branches and representative offices. Branches can be opened in many sectors, such as construction for contracts above 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 limits full foreign ownership of investment projects to projects worth more than LYD 5 million, except for limited liability companies, and requires 30 percent of workers to be Libyan nationals and to receive training. Foreign investors are not allowed to own land or property in Libya and can only lease real estate temporarily. Investment in “strategic industries” – especially Libya’s upstream oil and gas sector, which is controlled by the NOC – requires a foreign entity to form a joint venture with a Libyan firm that will hold a majority stake in the enterprise. It is not clear which industries other than upstream oil and gas may be considered strategic.

The PIB, established in 2009, is the main institution for promoting investment in Libya. It oversees the Libyan privatization program and supervises and regulates FDI activities. The PIB’s screening process for incoming FDI to Libya is not, however, clear. The criteria and process for investment bidding are not published or transparent, and it is therefore unknown whether foreign investors face, or have faced, discriminatory treatment. The PIB says that it evaluates bids or proposals for their compatibility with Libya’s national security, sovereignty, and economic interests. The Ministry of Economy and Trade (MET) has the final say on all FDI projects, based on the PIB’s recommendation. There is no information available on how long the approval process takes or what possible outcomes of the process are other than a positive or negative decision by the PIB or MET. The PIB claims that it keeps all company information confidential. U.S. firms have repeatedly complained about the slow speed by which the Libyan government makes business-related decisions. Despite these complaints, some U.S. firms have successfully invested in Libya, especially in the country’s oil and gas and power generation sectors.

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 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 to lease property from public holdings and private Libyan citizens, according to Article 17 of the 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. Please refer to Section 6: Financial Sector – Money and Banking System for more details. 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 MET is the main institution for processing business registration requests. 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 $205 million, compared to $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 facilitated international investment flows to a certain degree. However, existing banking products limit access to hard currency only via letters of credit or credit cards, while SWIFT transfers are restricted by the Central Bank. These limitations make investment abroad for citizens through official channels practically impossible.

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 Union (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

Libya has a very unclear and non-transparent regulatory system, and the roles and duties of its government institutions are not well defined. Libya ranked very low in the 2022 Corruption Perceptions Index by Transparency International (171 out of 180 countries, where “1” means least corrupt) and in the most recent ‘Ease of Doing Business’ Index by the World Bank (186 out of 190 countries, where “1” means great ease). Libya’s bureaucracy is among the most obscure and difficult to navigate in the Middle East and North Africa region, and its legal and policy frameworks are equally difficult to understand. The process of granting licenses and permits is often subject to long and unexplained delays, and the decisions are usually based on subjective and non-transparent criteria. This has created a situation where corruption and exploitation are widespread.

There is no public consultation or publication of draft regulations before they are enacted. It is difficult to find reliable and updated information about key commercial regulations. These factors have tended to discourage foreign investment.

Libya does not encourage or mandate companies to report on their environmental, social, and governance practices to enhance transparency. Libya scores zero out of five (with five being the best) in the Global Indicators of Regulatory Governance by the World Bank.

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, and the Working Party has yet to officially meet.

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 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 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 numerous 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.

Full foreign ownership rights were further reinforced by the Libyan High Court’s Department of Law, per an opinion issued on January 23, 2023, confirming the right to invest whether in the form of a branch or otherwise. The opinion also includes the right to invest without local partnership.

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. The Competition Committee is inactive at present, 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.
Furthermore, the Libyan Board for International Commercial Arbitration prepared a draft law on arbitration in 2016, as had been done by an expert panel commissioned by the Ministry of Economy for international arbitration in 2010. Neither of these drafts are in force yet, but many major contracts, such as those related to exports, production-sharing, or engineering, procurement, and construction, usually include clauses that refer disputes to arbitration in Paris under the International Chamber of Commerce.

Bankruptcy Regulations

Libya does not have a separate bankruptcy law and 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 export 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. However, the devaluation of the Libyan Dinar has increased the attractiveness of the 2010 Investment Law given that minimum investment required to attain the incentives listed above in now approximately $1 million, as opposed to the approximately $4 million before the currency unification and devaluation.

Foreign Trade Zones/Free Ports/Trade Facilitation

Free Trade Zones (FTZ) are established by law; each FTZ enjoys a unique law applicable to it. Libyan Law No. 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 No. 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 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.

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 through the enactment of Law No. 4 of 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, in addition to the destruction of some official files at the property registrar in 1986, has served to greatly complicate any subsequent effort to prove clear title to property throughout Libya. In 2015, in the aftermath of the revolution, the parliament passed Law No. 20 of 2015, which effectively reversed all legal implications of the 1978 Law. The property rights scene is today further complicated by the freezing of the national property registrar since 2011. The GNU took steps in 2022 to reopen certain functions of the registrar, including foreclosure. As a consequence of the ambiguity of property ownership, banks are reluctant to take residential property as collateral for loans. With the property registrar being frozen, 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

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).

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.

The IMF has asked Libya to bring its IPR regime in line with international best practice.

Resources for Intellectual Property Rights Holders:

Aisha Y. Salem-Howey, LLM
Intellectual Property Attaché for the Middle East & North Africa
U.S. Patent & Trademark Office, U.S. Department of Commerce

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 the privatization of small- and medium-sized enterprises (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. However, Islamic finance and product financing products are in place that tend to mirror interest bearing products. The bottleneck with financing is, as has always been the case, the need to provide property as collateral. The banking modernization program has also been seeking, among other components, to establish electronic payment systems and expand private foreign exchange facilities.

The CBL receives all of Libya’s hydrocarbon export revenues via the Libyan Foreign Bank and is responsible for Libya’s monetary policy, management of foreign exchange reserves, and supervision of the commercial banking sector. The CBL has been effectively divided since 2014 between its eastern and western branches as a result of the civil conflict. In 2021, an UN-facilitated financial review identified a roadmap for CBL reunification, though progress quickly stalled. In late 2022, CBL’s Tripoli leadership and the eastern branch began engaging in regular meetings to resolve key issues affecting the commercial banking sector and to standardize operations.

The CBL 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), which has increased importers’ access to hard currency at stable levels. However, the slow and non-transparent process for LC approval remains a significant concern for international companies operating in Libya and Libyan private businesses.

The availability of financing on the local market is extremely limited. Libyan banks can only offer limited financial products, loans are often made based on 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 has 19 commercial banks, the largest of which are majority-owned by the CBL, and four specialized banks. The six largest banks hold approximately 90 percent of the system’s assets and loans, whereas it is estimated that 30 percent of all cash in Libya is outside the formal banking system. In total, the banking system employs roughly 20,000 persons. An emerging source of funding includes Islamic bonds (Sukuk), which from a legal standpoint have existed for years, but in practice never materialized until 2022. The Libyan Internal Development Fund, a state investment vehicle, champions this mode of finance.

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.

On January 3, 2021, the CBL established a single, unified official exchange rate of 1 LYD to 0.15 SDR (Special Drawing Rights), effectively pricing the Libyan Dinar at 4.5 to the dollar, with slight volatility occurring as the currencies within the SDR basket float against each other. Previously, the official rate was 1.4 LYD/dollar for the purposes of government procurement, while private entities were charged roughly 3.7 LYD/dollar. Entities engaging in foreign exchange must be licensed by the Central Bank. Due to strengthening of the dollar against global currencies, the LYD/dollar exchange rate increased slightly through 2022. The parallel market has tracked this slight increase, with the spread between it and the official rate stable at approximately five percent.

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 the time of entry. CBL 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 and products in Libya operate using LCs 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 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 of 2011 froze many of the LIA’s assets outside of 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 $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 Corporation (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, none of Libya’s state-owned enterprises are considered efficient. The state is deeply involved in utilities, oil and gas, agriculture, construction, real estate development, manufacturing, and the corporate economy.

Between 2003 and 2008, Libya underwent its third phase of privatization, in which 360 SOEs of various sizes and sectors were either sold off completely, partially, or partnered with private entities through public-private partnerships. However, the privatization program faced limited interest due to restrictions on individual and foreign ownership – no more than 15 percent of the capital could be owned by an individual investor and at least 30 percent had to be locally owned. Fraud allegations also deterred potential investors. Since 2011, further privatization efforts have been hindered by unstable governments and security issues. However, despite these challenges, some sectors such as food, healthcare, construction materials, downstream oil and gas, and education have been partially or fully privatized organically with the state’s assets decaying and the private sector filling the void. The banking sector also has a similar story, with the failed privatization attempts of the state-owned banks, culminating with the exit of BNP Paribas from its investment in one of the banks, the private owned banks since 2011 have grown significantly to compete with state-owned banks, especially in their corporate offerings.

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 remains 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 near the bottom of the 148 countries as to efficient and sustainable resource use according to the Global Green Growth Institute.
Libya is a signatory to the Paris Climate Accords, which it ratified in August 2021. Libya also signed the Global Methane Pledge during the COP26 in the United Kingdom. Under NOC stewardship, Libya has expressed interest in methane flaring reduction. Libya recently reactivated the Renewable Energy Authority of Libya (REAL), which aims to achieve 10 percent renewable energy contribution to the power generation mix by 2025 and reach 22 percent by 2030. However, renewable energy has yet to significantly impact the power generation mix, despite a flurry of activity in the nascent renewable energy sector.

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 to the furthest extent. 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, however, made progress to improve transparency and accountability, including international certification for a number of its auditors.

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
No update  

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.  Forces allied with Libyan National Army (LNA) commander Khalifa Haftar forced the near-total shutdown of Libya’s energy sector from January to September 2020.  The October 2020 ceasefire and the establishment of the Government of National Unity (GNU) in March 2021 markedly reduced the civil disturbances that had been a daily occurrence.  However, there have been periodic partial shutdowns since then.  Following the postponement of elections (scheduled for December 2021), the House of Representatives sought to install a new interim “Government of National Stability” (GNS) in a vote the UN deemed not-fully transparent, but the GNS failed to take power in Tripoli. The GNU remains the internationally recognized government.  Rival armed groups continue to jockey for control over the country’s political institutions and economic resources, which means that insecurity and instability remain 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.

Current legislation 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 earlier 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.

However, a new bill which would introduce greater freedoms to labor unions is currently under review by the Libyan House of Representatives. The bill is expected to pass into law during 2023.

The current 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) 2021 N/A 2021 42,820
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) 2021 N/A 2021 219 BEA data available at
Host country’s FDI in the United States (USD Millions, stock positions) 2021 N/A 2021 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.

U.S. citizens traveling to Libya on business visas require an invitation from or 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.

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

On This Page

  2. 1. Openness To, and Restrictions Upon, Foreign Investment
    1. Policies Towards Foreign Direct Investment (FDI)
    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. Visa-related Information
  16. 15. Contact for More Information
2023 Investment Climate Statements: Libya
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