The New Libya Investment Law

GRTU has this
week held another successful New Libya Investment Law information session. One
of the main services offered by GRTU today is helping local enterprises explore
business opportunities outside the Maltese shores through hosting of foreign
business delegations, participation in delegations abroad, finding partners,
exploring new markets, etc…

Libya is
understandably a market of interest for local enterprises both for its
opportunities and historical relations with our country. The way of doing
business in Libya has changed drastically following the revolution and is being
accompanied by changes in the legal system, including the laws concerning
investment.  GRTU wanted local
enterprises to be prepared and protected when approaching Libya and it is to
this end that GRTU Council Member and Libya relations representative Mario
Debono invited a Libyan consultancy to explain this New Investment Law. The
consultancy's main area of specialty is the conduct of legal studies, analysis
and set-up companies, financial advisory in addition to providing corporate
solutions.  They also provide an
important strategic gate-way to doing business in Libya.

The meeting was
very insightful. It was explained that when eying Libya one has to start by
understanding the current situation. Libya is in an era of transition
politically, economically and socially and it is still recovering from the
consequences of the revolution. Libya remains a highly challenging market, and
while there are potential investment opportunities, there are corresponding
great challenges to successfully operating in Libya.

The revolution
has led to a great deal of confusion particularly among foreign investors
because the shifting of regulation and procedures and a weak regulatory
environment have not inspired confidence in the market. Following a reform
process enacted by the former regime, a slight growth in the economy took place
in the banking system and amongst SMEs.

The
main challenges of the Libyan market remain:

Lack of sufficient information on Libyan companies

Lack of transparency in the tendering process

Instability in terms of security, regulation and political environment

Underdeveloped banking system

Lack of skilled and educated labour

Corruption

Lengthy bureaucratic process

Difficulty finding reliable Libyan partners

When
considering market entry it is important that any processes are
official to guarantee security and protection of the investment. Foreign
Investors have five main options when considering market entry, each of
which have certain advantages and restricitons:

Representative Office

Branch Office

Joint Venture Company with a local firm

Registration under Investment Law No. 5 of 1997 (Openness to Foreign Investment)

Mentioned also where the Prohibited
activities for foreign investors, requirement for getting approval, privileges
and exemptions and an overview of the tax system.

Further information may be obtained by
contacting Abigail Mamo at GRTU on or 21232881.