Business in Libya – Are you sure? Isn’t Libya a risky, war torn nation? What about security? The reality is that Libya is ripe for business investment. Libya offers a number of strategic opportunities for those looking for an emerging market.
Yes, Libya does have its challenges! Over the past few years there have been exchange rate fluctuations, electricity outages & political unrest, but it things seem to be improving. Whether or not the country is perfectly stable does not negate the fact that Libya does offer some fantastic business opportunities.
As you begin to plan to do business in Libya, you will want to consider a few things
Business Registration: Planning for business in Libya.
Here are the options for business registration in Libya.
There are a couple of options for foreigners who want to establish a presence in Libya. Firstly, the easiest way USED TO BE to register a company is in the capacity of a representative of a foreign company. The paperwork for this option is minimal as is the investment of a minimum of 50,000 Libyan Dinar. However, as of the new investment law, the price has risen to 150,000 Libyan Dinar. You are able to legally represent your company with regards to marketing but you are not permitted to make money in Libya. You will also not have to pay taxes in the country. At the writing of this article (Sept 2021), approval for representative offices is not being offered by the Libya government. You will need to look at one of the other options.
The most popular method for registration seems to be the Branch Office. For those looking to conduct business as a foreign entity, you will find the Branch Office to be the easiest registration option. There are still a number of hoops to jump through, but the process is not too difficult. You will need documents from the foreign “mother company” translated into Arabic and validated at the Libyan embassy. For more information on this process, please contact us.
For investors wishing to establish a joint venture company which is only foreign owned in part, the Mushtaraka Company is a good option. The foreign company is allowed to own up to 49% of the business and the minimum investment required is 1 Million Libyan Dinar. The company will be fully licensed under Libyan law and liable for taxes in the country. The only problem is that these new businesses must fall under 10 different business sectors. You may want to contact a lawyer to see your options.
The final option is an investment law company which is great for totally foreign owned businesses who will fall under investment laws. The minimum investment needed is 5 Million Libyan Dinar and investment is applicable in certain Libyan sectors.
For those of you looking for a simpler way to develop a presence in Libya, you might consider starting a Libyan Company. The only issue with this method is that you MUST find a trust worthy partner who will register the company and hire you as the president of the board.
Business Partner: Do you need one?
One of the most important decisions that you will have to make is whether or not you will need a Libyan business partner. For some of the options mentioned above, it is mandatory to have a local partner.
You will need to ask yourself:
- What am I looking for in a business partner?
- Am I looking for a working partner, financial partner or just a “figure head”?
- What qualifications or experience does my partner need?
- What types of connections does my potential partner need to have?
- Am I looking for an individual or a company to be my partner?
- How can I find the right business partner?
Financial / Tax Planning: Business in Libya
Before jumping into any business venture, you will want to make sure you clearly understand the financial & tax implications. At Libya Business, we are not tax experts so we would encourage you to connect with a local Libyan tax expert.
If you need connections to high caliber tax accountants, please contact us.
Property Requirements: Planning where to do business in Libya
Another decision you will need to make in Libya is where do you plan to your business from. Are you looking to find an office for rent in Libya? You will want to consider the different options for office spaces as well as the different locations.
We all know the saying “Location Location Location!” Make sure that you clearly think through the location for your business premise in Libya.
Safety & Security
One final thing to consider in your planning is safety and security. Keeping your team & employees safe should be a major priority for your business. You will need to decide:
- Do I need a local security company to assist?
- Do I need to install extra security measures?
- Which locations will be the most secure?
- How can I best keep my team safe & secure while not paralyzing them in fear?
Do you need help planning for your business in Libya?
If you are ready to take the next step in planning your business in Libya, please reach out to our team at Libya Business and we can assist you in the process. Make sure that you start your business off well.