Investment in Libya
Libya is crying out for investment and business opportunities are abundant. Opportunities exist in almost every sector, from oil and gas to agriculture to telecommunications and tourism. There are vast projects to be taken by foreign companies, particularly in the areas of infrastructure and tourism. First class hotels need to be built and managed, for both business and touristic purposes. The number of tourists and business visitors is expected to increase substantially and the necessary facilities do no not exist. There is need for an extensive road building programme, as well as waste management, including an efficient drainage system, just to mention two projects. There are also plans for wide spread privatisation, in schools, hospitals and existing hotels, for example. All this is just the tip of the iceberg.
Libya is embarking on a new era of world relations and is opening up to foreign investment, but finds itself in a position where it has to undo a great deal of what was done during the "Great Revolution." Against this background Libya has embarked on a series of legal reforms. As part of this reform policy, it began enacting various laws, chief amongst these being Foreign Investment Law No. 5 for the Year 1997, concerning Encouragement of Foreign Capitals Investment. This law, together with its amendments and implementing regulations, together create the most liberal legal framework for attracting foreign direct investment ever adopted by the Libyan government.
The Foreign Investment Law attempts to cover not only pure foreign investment, but also Libyan private capital abroad. It opens up many sectors that were previously closed to the private sector and to foreign investment.
This law targets a number of projects in Libya, such as:
* Production of goods or services for export or import substitution
* Creation of new jobs and employment opportunities and provision of advanced technical training
* Transfer of know-how, modern technology and technical expertise
* Making use of local raw materials
* Contribution to the growth of the economically underdeveloped regions
The Law provides the following exemptions and benefits for investors:
* Imported machinery, tools, equipment, spare parts and raw materials are exempt from all duties and taxes for a period of five years
* The project is exempt from all income tax on its activities also for a period of five years, which period can be extended for a further three years
* Exported goods are exempt from all taxes
* No stamp duty is imposed on commercial documents in connection with the project
Rights and privileges accorded to investors include the following:
* Net profits and dividends are freely transferable
* Expatriate personnel can be freely employed in the absence of Libyan substitutes
* Long term leases for land for production facilities are available
* Bank accounts in convertible currencies can be freely opened
* Ownership of the project may be transferred in whole or in part to another investor
* The investor can freely re-export his invested capital
Law No. 5 guarantees and protects the investor against nationalisation, dispossession, seizure, expropriation or any other action of a similar nature. There is a Libyan Foreign Investment Board which promotes investment projects and provides a one-stop shop for investors, providing all the required services, including the processing of applications and the granting of licences and permits.
The Foreign Investment Law provides the opportunity for 100% foreign equity ownership of companies licensed under the law. It provides for various preferences for licensed projects such as an exemption from corporate income tax for 5 years with a possible extension of 3 years provided that the net profits are reinvested in the project. It also provides for an exemption from customs duties on imports of machinery, tools and equipment needed for the execution of the project which will continue for a period of 5 years during the operation of the project. It also provides for an exemption from excise taxes on exported goods.
Investors are permitted to open an account in convertible currency, to repatriate profits, to employ expatriates when there is no qualified local labour and to own and lease property. They are protected against expropriation and permitted access to arbitration.
The Foreign Investment Law may be clearly interpreted as a positive step towards improving the buisness environment. Its tone is encouraging. So is Libya's willingness to negotiate further Investment Protection and Double Taxation Agreements with new partners. Malta and Libya entered into a Double Taxation agreement on Taxes on Income in 1973. Libya is also making a concerted effort to clear outstanding sovereign debt issues.
الاشتراك في:
تعليقات الرسالة (Atom)
ليست هناك تعليقات:
إرسال تعليق