Libya

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Operating a Business in Libya

Setting up a company | Working conditions | Cost of labor | Social partners

Setting up a company

Legal business entities

Types of companies and capital (max/min)	Number of partners/shareholders and liability	Registration fees
Joint stock company. The law defines 4 thresholds. - 1st threshold: maximum capital of 1 million LYD, - 2nd threshold: capital of between 1 and 2 million LYD, - 3rd threshold: capital of between 2 and 4 million LYD, - 4th threshold: capital above 4 million LYD.	Minimum number of shareholders according to the 4 thresholds: - 13 shareholders, - 25 shareholders, - 50 shareholders, - 100 shareholders. Maximum share of capital available per shareholder according to the 4 thresholds: - 4% of capital, - 2% - 1%, - 0.5%.	The Joint Stock Company is subject to law number 21/1369 dated 21st December 2001.
The foreign company The capital must be between a minimum of 5 000 LYD and a maximum of 30 000 LYD.	Minimum of 2 partners. One of them must be of Libyan nationality. The Libyan partner must hold at least 51% of the capital.	Foreign companies are regulated by the clauses of law number 65 dated 20th May 1970.
The office of representation The office of representation must open a non-resident bank account with funds supplied by the parent company. The deposit must be at least equal to 50 000 LYD.	A minimum of 2 partners, one of whom must be of Libyan nationality.	The office of representation is subject to decree number 8 dated 9th January 2005. It provides for the deposit of a request that includes the name, the profession and the postal address of the representative responsible for filing the request. The company has to pay a registration tax of 25,000 euros.
The foreign subsidiary The subsidiary must set aside a sum reserved for setup and operating that must be at least 150 000 LYD.	A minimum of 2 partners, one of whom must be of Libyan nationality.	The subsidiary is regulated by decree number 3 dated 3rd January 2005. The request must be filed with the General Popular Committee's Bureau of the investment Register and Commercial Register.

Business setup procedures: The company must be registered with the Bureau of the investment Register and Commercial Register. There is a registration tax of 2% of the contract for foreign suppliers contracting with public organizations.
The competent organization: Decree n°8 of 9 January 2005 modifying some provisions of law 65/1970 stipulates that depositing a request with the Bureau of the investment Register and Commercial Register is compulsory for any foreign company wishing to open an office of representation in Libya. In the request the following must be mentioned: the name, profession and postal address of the representative responsible for filing the request.

Working conditions

Legal weekly duration: 48 hours
Retirement age: Retirement age is fixed at 65 for men, 60 for women and 62 for civil servants.
Working contracts: Employment law is regulated by law number 15 of 1981.
Foreign employees cannot expect a work contract in Libya unless they have a work permit and a residence permit issued by the competent Libyan authorities. The contract is in the form of a written undertaking that must include:
- the duration of the undertaking,
- the rights and obligations of the employee,
- the number of hours worked daily and weekly,
- holidays,
- length of leave periods,
- the salary as well as overtime payments,
- accommodation,
- insurance.

Cost of labor

Minimum wage: 150 LYD per month
Average wage: LYD 190 per month in 2001.
Social contributions: Social security contributions paid by employers: 11.25%
Social security contributions paid by employees: 3.75%

Social partners

Social dialogue and involvement of social partners: There is only one trade union in Libya that employees are allowed to join. This is the National Federation Of Unions, formed in 1972. Foreign workers are not allowed to form unions.
Labor regulation bodies: The Revolutionary Command Council (RCC)

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