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Decision No. 207 of 2012 Concerning the participation of foreigners in the joint-venture companies, branches and representative offices for the foreign companies in Libya

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Decision No. 207 of 2012 Concerning the participation of foreigners in the joint-venture companies, branches and representative offices for the foreign companies in Libya

Minister of Economy: 

After perusal of: 

  • Constitutional Proclamation issued on 03/08/2011. 
  • Resolution of the National Transitional Council no. 174/2011 concerning the determination of the government structure. 
  • Resolution of the National Transitional Council no. 184/2011 concerning the accreditation of the transitional government. 
  • Law no. 7/2004 concerning tourism and executive regulation thereof. 
  • Law no. 9/2010 concerning the furtherance of investment and executive regulation thereof − Law no. 11/2010 concerning the stock market. 
  • Law no. 12/2010 concerning the passing of Labor Relation Law and executive regulation thereof − Law no. 15/2010 concerning the lease financing and executive regulation thereof − Law no. 23/2010 concerning the commercial activity. 
  • The statute of the National Transitional Council. 
  • Decision of the General People’s Committee no. 544/2010 for issuing the regulation for the registration and classification of the executive tools. 
  • The resolution of the minister of economy no. 103/2012 Concerning the participation of foreigners in the joint-venture companies and branches and representative offices for the foreign companies in Libya. 
  • Meeting of the legal committee and advisory committee of the Ministry of Economy held on 20/06/2012.

It was resolved that: 

Chapter 1 Joint-venture companies 

Article 1 

With observance of the unity of objective and specialty, the incorporation of joint-venture companies between the Libyan natural persons and body corporate and foreign natural persons and body corporate shall be according to their specializations entered in the official circles in the country where are located their headquarters provided that the joint-venture company is not a holding company. 

And the chairman of the board of directors of the Joint Venture Joint stock company, or the general manager of the Joint Venture Limited liability company, must be a Libyan national. 

Article 2 

The joint-venture companies shall take the form of the joint-stock company according to the provisions of commercial activity Law no. 23/2010 provided that its subscribed capital is not less than one million Dinar and one third of the cash capital shall be paid up during incorporation, and these companies shall have the ability to undertake economic activities in all fields in Libya according to the preceding jurisdictions in Libya, except the activities specified in article 6 of this resolution. 

The joint-venture company may also take the form of a limited liability company, from natural persons Libyans or foreigners and provided that the capital in this case shall not be less than fifty thousand Dinars., These companies may exercise the economical activities stipulated in the annexed list to this resolution. 

Article 3 

The participation of foreigners in the joint-venture company shall not exceed 49% forty-nine percent throughout its whole duration. However, the participation of the foreign partner may, by virtue of a causative decision by the Ministry of Economy, for special consideration related to the nature of the activity or its location, artistic or technical requirements, exceed the mentioned share, provided that it shall not exceed 60% sixty percent. 

Article 4 

When concluding memorandums of incorporation of joint-venture companies, the following documents have to be made available: 

Firstly: Regarding to the legal person:

  1. Decision of the Board of Directors of the national and foreign company that approves participation in the incorporation of the joint-venture company and the value of their participation therein. 
  2. Copy of the memorandum and articles of association of the national and foreign company. 
  3. Recently dated extract of the entry of the national and foreign company in the commercial register or a substitute. 
  4. Statement issued by one of the banks operating in Libya that indicates the full settlement of what has to be paid up from the company’s cash capital in such a way that it shall not be less than three tenth of the cash capital and indicating herein the financing, by the foreign partner of the due part from his cash share in the company’s capital, to Libya. 
  5. A statement for submitting and evaluating the share in kind in accordance with the provisions of Article 104 of Law no. 23/2010 whether this share is advanced by the national or foreign partner. 

The documents mentioned in items 1-2-3 of this Article shall be certified by the competent official circles in the headquarters’ state regarding the foreign partner and by the Libyan embassy or its substitute in such state, provided that the legal translation of the documents shall be done in Arabic inside Libya. 

Secondly: Regarding natural persons:

In case the foreign partner is a natural person, the following condition shall be met in his concern:

  1. Evidence of identity by virtue of valid passport. 
  2. Evidence of legal age necessary for the practice of the commercial activity in accordance with the Personal Status Law. 
  3. He had not been judged for a felony or honor or trust breaching offense unless he was rehabilitated. 
  4. He had not declared his bankruptcy unless rehabilitated. 
  5. He shall present a statement to be issued by one of the banks operating in Libya testifying full payment of his whole share in the cash capital.
  6. In case of the share in kind, the share in kind has to be submitted and evaluated in accordance with the provisions of Article 104 of Law no. 23/2010, on the condition that the equipment object of the share shall be new. 

The provisions related to the joint-stock companies shall be applied on the joint-venture companies for other than provided for in this resolution and they shall comply, in practicing their activities, with the following rules and conditions: 

  1. Transfer and settlement of knowledge and technology. 
  2. Employing the national labor according to the specified percentage in the preceding statutes.
  3. Lay out annual programs to train the national labor and qualify them for the professions occupied by foreign elements. 
  4. Lay out annual programs to replace the foreign labor by the national labor. 
  5. Utilization of equipment, machines, raw materials and production requirements available in the local market. 

Article 6 

It is prohibited to incorporate joint-venture companies to practice the activities mentioned in the following items and these activities are confined to none other than the Libyan individuals: 

  1. Retail and wholesale trade. 
  2. Importation activities. 
  3. Catering services. 
  4. All types and fields of commercial agencies’ activities. 
  5. Land transport services. 
  6. Inspection activity on all the imported and exported commodities and goods unless by virtue of a prior permission of the Minister. 
  7. Activity of handling, shipment and discharge in the airports. 
  8. Legal and financial audit works. 
  9. Packing and packaging activity. 
  10. Stone crushing breakers. 
  11. Contracting and civil works including the activity of construction and building with regards to the contract whose value is less than 30,000,000 thirty million Dinars. 
  12. Any other fields whose exercise is limited to the Libyans by virtue of special laws. 

Chapter 2 Branches of foreign companies 

Article 7 

After taking permission from the Minister of Economy, the foreign companies shall be entitled to open branches for them in Libya in the fields specified in Article 9 of this decision, provided that the participation shall not be in a joint-venture company that operates in the same field or activity and work duration of the branch shall be five 5 renewable years. 

Article 8 

Permit request provided for in the previous article shall be enclosed with the submission of the following documents: 

  1. Decision of the Board of Directors of the company involving the approval to open a branch for the company in Libya while indicating herein the following: 
  • A. Determination of the branch’s activity, provided that it is included in the activities allowed by the permit for the foreign companies’ branches to be exercised in Libya. 
  • B. Amount allocated for the establishment of the branch and its management on condition that it shall not be less than 250,000 two hundred fifty thousand Dinars. 
  • C. Nomination of the branch’s manager and his deputy, provided that one of both must be a Libyan national. 
  1. A copy of the memorandum and articles of association of the company and the last ratified annual balance sheet. 
  2. A statement of the company’s experience and its classification. 
  3. Recently dated extract of the foreign company’s entry in the commercial register or a substitute.
  4. Undertaking by the foreign company to draft an annual balance sheet for the branch to be ratified by a Libyan legal auditor and the account of its profits and losses so that its financial position in Libya is indicated. 
  5. A certificate to be issued by one of the banks operating in Libya, indicating herein the transfer by the company of the due financial amount to Libya and refer to a bank statement to be approved by the competent bank.

The documents mentioned in items 1-2-3-4 of this Article shall be certified by the competent official circles in the state of the company’s headquarters and by the Libyan embassy or its substitute in such state, provided that the legal translation of the documents shall be done in Arabic inside Libya. 

Article 9 

The fields and activities for which foreign companies are permitted to open their branches in Libya are determined as per the following: 

Firstly: Contracting and civil works sector: 

  1. Construction and building. 
  2. Roads extension and erection of bridges and dams. 
  3. Maritime constructions as maritime quays, wave’s barriers, construction of shipyards and stoking and deepening of harbors. 
  4. Construction of airports and runways. 
  5. Extension of railways and the construction of their stations. 
  6. Construction of transferring and distributing networks for gas by using different types and sizes of carbonic steel and poly-ethylene pipelines. 
  7. Installation and maintenance of gas networks for homes, and calibration of different types of gas measuring counters. 

For undertaking the activities stated in points 1-5, the contract’s aggregate value must not be less than 50.000.000 Libyan Dinars fifty million Libyan Dinars. 

Secondly: Field of Electricity: 

  1. Set up and maintenance of power plants including the plants depending on renewal energies and reducing and increasing tension stations of all types. 
  2. Establishment and maintenance of cables networks for electricity transmission.
  3. Establishment of desalination stations that rely on the thermal, cloudiness and renewal energies ways. 

Thirdly: Oil sector: 

  1. Oil exploration including geological survey works of the earth layers by different geological, geophysical and geochemical means and others. 
  2. Testing and analysis of data and presentation of geological and reservoir studies.
  3. Drilling of oil wells and maintenance thereof, installation and maintenance services for oil wells drilling equipment as well as the submerged and immersed pumps. 
  4. Cementing works and mud services and drilling liquids. 
  5. Construction of tanks and extension of pipes and pipelines stations for the transport and pumping of oil and gas and maintenance thereof and protection works necessary for their destination site. 
  6. Construction of floating maritime platforms for oil and gas drilling. 
  7. Installation and maintenance of oil refineries and petrochemical plants. 
  8. Offering maritime transport services for the products, equipment and machines related to the drilling operations in the maritime areas. 
  9. Removal of mines from oil fields and from other sites. 

Fourthly: Communication sector: 

  1. Installation and maintenance of telecommunication systems and stations. 
  2. Construction of stations, towers and aerials related to wireless communications and air navigation stations and maintenance thereof.

Fifthly: Industry sector: 

  1. Electrical, mechanical, electromechanical and technical works necessary in installation of plants machines and their maintenance. 
  2. Mining works, minerals exploration and their extraction, excluding oil and gas materials there from. 
  3. Construction, erection and maintenance of thermal furnaces necessary for the different plants. 
  4. Installation and maintenance of safety and industrial security system. 

Sixthly: Survey and planning: 

  1. Survey and air mapping by different means and for various objectives. 
  2. Offering necessary engineering services in the planning of cities and architectural and urban areas. 
  3. Preparation of studies and designs for engineering projects. 

Seventhly: Environment protection sector: 

  1. Establishment of stations for the purpose of environment correction. 
  2. Treatment of wastes and their recycling. 
  3. Environment pollution treatment and installation and maintenance of the relevant equipment. 
  4. Treatment of seawater and groundwater interpenetration, maintenance of transport and water sewage and lifting stations. 

Eighthly: Computer sector: 

Installation of computer control systems, manufacture and drafting of software and maintenance thereof. 

Ninthly: Technical consulting, studies, training and supervising: 

  1. Preparation of studies in the field of information technology and wireless communications, control devices and the offering of necessary consulting in this concern and supervision of execution thereupon. 
  2. Training and building capabilities and skills as needed by the labor market, complying with the law no. 18 for 2010 concerning education. 
  3. Preparation of technical studies, and engineering designs required for the execution of major industrial and construction projects. 
  4. Supervising the execution of engineering projects. 

Tenthly: Health sector: 

Installation and maintenance of medical machines and equipment and standardization thereof. Management of hospitals and medical units. 

Eleventh: Air transport sector: 

According to the legally determined rules and conditions. 

Article 10 

The decision to permit the opening of a branch is not allowed for more than one of the fields provided for in Article 9, and a permit is granted for each field, individually. 

The fields and activities permitted to branches of foreign companies shall be reconsidered by addition or abolition through official correspondences between the concerned ministries. 

Article 11 

It is prohibited to all the national and foreign authorities operating in Libya to enter into contracting with foreign companies for the execution of works inside Libya if they are not in possession of the permit stipulated in Article 7 of this resolution.

Article 12 

The branches of foreign companies operating in Libya during the issuance of this resolution, that undertake the execution of projects, are excluded from the provisions of this resolution, until the expiration of the contract’s period. Nevertheless, it is obligated to settle its situation prior to the expiration of the said contracts. 

Chapter 3 Representative offices of foreign companies 

Article 13 

The foreign company not in possession of a branch or a joint-venture company in the required field shall after taking permission from the Minister of Economy open a representative office for it in Libya for the purpose of studying the market, collect information, prepare the studies and facilitate the procedures of exercising its activity in the future without having the power to conclude contract under its name. The work duration of the office shall be two years, renewable once for the same period. 

Article 14 

The permit application provided for in the previous article shall be enclosed with the submission of the following documents: 

  1. Decision of the Company’s Board of Directors involving the approval to open the representative office in Libya. 
  2. A copy of the Memorandum and articles of association of the company. 
  3. A recently dated extract of the company’s entry in the commercial register or a substitute.
  4. Nomination of the manager of the representative office whether within the decision of the Board of Directors for the opening of the representative office in Libya or by a separate decision. 
  5. Open an account in Libyan Dinar or foreign exchange in one of the banks operating in Libya and cover its balance with transfers from the company it represents in such a way that it shall remain sufficient to cover the minimum limit of the incorporation expenses and its current disbursements and in all cases, the balance in the account shall not be less than LYD 150,000 one hundred fifty thousand Dinars. 

The documents mentioned in items 1-2-3-4 of this Article shall be certified by the competent official circles in the state of the company’s headquarters and by the Libyan embassy or its substitute in such state, provided that the legal translation of the documents shall be done in Arabic inside Libya. 

Article 15 

The permit granted to the representative office shall be cancelled and it shall be closed in case it exercises any commercial activity inside Libya. 

Chapter 4 Joint and conclusive provisions 

Article 16 

The foreign company that intends to open a branch or representative office for it in Libya shall submit a request thereby to the Administration of Companies and Commercial Registrations in the Ministry of Economy. 

The application shall include a statement of the name of the person who is authorized to complete the application requirements, his profession and the address where letters related thereby shall be sent. 

Article 17

The Administration of Companies and Commercial Registrations shall examine and study the submitted applications and refer them, accompanied with the point of view of the Minister, within fifteen working days from the date of receiving the application or from the date of fulfilling the missing. 

The applications must be decided within thirty days from its referral date. 

The Administration shall notify the concerned person of the decision taken concerning the application whether by rejection or approval within fifteen working days from the date of issue of the decision. 

Article 18 

In addition to the data provided for in Article 491 of Law no. 23/2010, the following documents have to be enclosed in the application for registration in the competent commercial register regarding the joint venture companies or the branch of a foreign company or representative office: 

  1. Memorandum of association of the joint-venture company and the authorization decision with regards to the opening of a branch or representative office of the foreign company in Libya according to cases. 
  2. A statement to be issued by one of the banks operating in Libya by indicating herein the transfer by the foreign partner or the foreign company of the necessary amount to Libya in order to open the branch or the office or pay the participation in the joint-venture company and be confirmed by a ratified bank account statement. 

The legal representatives of the joint-venture company, the branch manager and the manager of the representative office shall deposit the forms of their linear signatures in the commercial register. 

Article 19 

This resolution is effective and applicable from the date of issuance, and to be published in the official gazette, and it shall abolish any contradicting provisions, and the addressees by its provisions must settle their situations within six months from its effectiveness, and the competent authorities must execute the same. 

  • Minister of Economy
  • Ahmed Salem Alkoshli
  • Issued in: Tripoli
  • Date: 05 July 2012