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Law No 9 For 2010 Encouraging Investment

 

 

 

People’s Congress Law No. 9 for 2010 encouraging investment

 

Article (1)

 

In applying legislations of this law, the following terms and expressions have the meanings against each:

 

  1. State - G. S. P. L. A. G. (Libya).
  2. Administrative authority – concerned administrative authority for executing legislations of this law.
  3. Secretary – sector's secretary of the administrative authority.
  4. Executive rules – rules issued for execution of legislations of this law.
  5. Foreign capital – the financial cash value or physical or moral in one of the foreign currencies which enter the state whether owned by Libyans or foreigners for executing investment activity.
  6. National capital – cash or physical or moral value in foreign currency for forming capital of investment project for Libyan citizens or corporate bodies whose capital is fully owned by normal or corporate Libyan persons.
  7. Investment project – any investment project in which the stipulated conditions of this law are available regardless of its legal form.
  8. Privatization – means ownership transfer of companies, productive and services units totally or partially owned by the state or public corporate bodies of the private sector.
  9. Investor – any normal or corporate person, national or foreigner who invests according legislations of this law.

 

Article (2)

 

Validity of the law

This law is applied on capital of national or foreign or joint between investor in the aimed fields in this law.

 

Article (3)

 

Law Objects

The aim of this law [s to encourage investment of national and foreign capitals for establishing investment projects within the state's policy, economic and social growth aims to guarantee particularly achievement of the following aims:

 

1- To habilitate and develop the Libyan elements technically, upgrade qualifications, to gain advanced skills and to avail employment chances.

2- To transfer knowledge and technology in Libyan economy.

3- To participate in establishing or developing or rehabilitating the economic services and productive units for assistance in competency and entry in the international markets.

4- To achieve spatial development.

5- To increase and diversify income resources.

6- To rationalize energy consumption.

7- To exploit local available raw materials.

 

Article (4)

 

Forms of Investment

This law regularizes investment of national or foreign capital in forming project's capital by one of the following forms:

  1. Local currency, foreign convertible currencies or official banking methods in its place.

2- Machinery, equipments, instruments, transport means, spare parts and primary materials required in executing investment projects.

3- Moral rights such as patents, licenses, marks and necessary trade names for establishing or operating investment projects.

4- The part to be re invested from profits and incomes of projects whether in the same project or another project.

 

The executive rules will organize the method for evaluating the physical or moral assets and re investment of profits.

 

Article (5)

 

Law executing authority

A specialized administrative authority will be established for execution of legislations of this law.  A decision from GPC will be issued for its nomination and organization upon secretaries

Submission.

 

Article (6)

 

Duties of the authority executing the law

The administrative authority will encourage investment of national and foreign capitals and marketing of investment projects by different means, particularly the following:

  1. To study and propose plans organizing investment and privatization including preparing investment map for all investment fields, available and permitted investment chances according investment fields in this law.
  1. To receive investment applications and determine the extent of achievement of the aims of this law and its compliance with conditions, controls, economic feasibility study of the investment project and ascertaining the continuation of the necessary conditions in the national and foreign investments which are subject to this law.
  2. To collect and publish the information contributing in the preparation of economic studies concerning investment possibility in the projects which contribute in state’s economic development.
  3. To take measures for attracting national and foreign capitals and marketing investment opportunities by different means.
  4. To provide the service of the unified window to enable investor to obtain license, approval and necessary service for the investment project easily.
  5. To study and check investment regulations from time to time and to submit its proposals for development to the secretary.
  6. To make the necessary arrangements for execution of the general policy to extend ownership base and ownership transfer of public economic companies and units.
  7. Any other assigned duties by GPC.

Article (7)

 

Conditions which should be available in investment projects.

The project should achieve all or part of the following:

  1. To transfer knowledge and modern technology or technical experience or intellectual property right.
  1. To support links and integration between activities and existing economic projects or to reduce production costs or to contribute in the provision of materials and operational requirements.
  2. To exploit or assist in exploiting local raw materials.
  3. To contribute in growth and development of remote areas.
  4. To produce commodities for export or to contribute in increasing its exports or as its result a commodity will be totally or partially dispensable for import.
  5. To submit service which the national economy require or to contribute in its improvement or development or re habilitation.
  6. To provide work opportunities for Libyan laborers at least 30%; to be trained to gain skills and technical experience.  The executive rules will specify conditions and status for employment of national and foreign laborers.

Article (8)

 

Investment field

Investment will be in all productive and service fields.  The executive rules will determine the productive and service fields which are not applicable to this law or which are applicable for Libyans only or jointly between Libyans and foreigners as well as percentage of shares of each side in the project and the project’s legal status and minimum capital in accordance with activity’s nature.

 

 

 

Article (9)

 

Permission for investment

Decision for establishment or development or re habilitation or management and operation of investment project is issued by the secretary upon presentation by the administrative authority.  This authority will issue all licenses and necessary approvals of the investment project.  These licenses and permits will replace any other licenses or permits decided according the prevailing regulations. The executive rules will specify conditions and controls for granting permits and licenses.

 

 

Article (10)

 

Benefits and exemptions

The benefits of the investment project which is subject to legislations of this law are as follows:

  1. Machinery, equipments and necessary instruments for execution of the project will be exempted from all taxes, customs fees, import services fees and other similar fees and taxes and exemptions will not include port expenses, storage and handling
  1. To exempt equipments, spare parts, transport means, furniture, requirements, primary materials, advertising and announcement materials related to the operation and management of the project for 5 years from all fees and taxes whichever is its type and source.
  2. To exempt produced commodities for export purpose from production tax and from customs fees and taxes on export.
  3. To exempt the investment project from income tax on its activity for 5 years starting from permission date for resuming activity.
  4. Income of shares resulting from distribution of profits of the investment project during the exemption period and profits resulting from amalgamation of the project or sale or division or changing its legal shape will be exempted from all taxes and due fees during exemption period.
  5. To exempt profits resulting from project’s activity if re invested.
  6. To exempt all correspondence, actions, dealings and documents which are issued or signed or used for the investment project from stamp duty decided as per legislations of the prevailing regulations.  The investor transfers losses in his project during exemption years to the subsequent years.  The executive rules of this law demonstrates the necessary conditions for executing this article.

Article (11)

 

Disposal of machinery and equipments

Machinery, equipments, furniture, transport means, instruments, spare parts, primary materials and imported operational requirements for the purpose of the project should not be sold or abandoned without approval from the administrative authority and after payment of all decided customs fees and taxes for its import

 

Article (12)

 

Investor’s rights

The investor has right in the following:

  1. To open accounts for his project in local and foreign currencies with one of the banks working in Libya.
  2. Lending from local and foreign banks and financing corporations according the prevailing regulations.
  3. Re transfer of foreign capital invested in case the period of the project is completed or project is liquidated or sold totally or partially.
  4. Re transfer of foreign capital abroad with the same method of entry after completion of 6 months from date of entry if its investment faced obstacles or circumstances beyond the control of the investor.
  5. To transfer the distributed net profit and income of the invested foreign capital which is achieved in the project .
  6. To employ foreign labor when national labor is not available.
  7. Stay permit is granted for 5 years subject to extension during the project’s period and also exit and entry visas for several trips are granted.

Article (13)

 

Foreign employees

The foreign employees from abroad have the right to transfer abroad their salaries, wages and other awards granted to them and will be exempted from customs duty on their personal effects according the executive rules.

 

Article (14)

 

Investment record

Without prejudice to legislations organizing the trade register, a special record named (Investment Record) will be established in the administrative authority, for registry of all investment projects, its legal status, investment’s volume, kind of activity, names and nationalities of owners and share holders and percentage of foreigners.

The executive rules limit controls and registration arrangements in the investment record.

 

Article (15)

 

Additional benefits and exemptions

GPC may issue decision upon secretary’s proposal to grant benefits and tax exemptions for a period not exceeding 3 years or other additional benefits for investment projects which prove that it:

  1. Contributes in achieving food security.
  2. Using equipments which achieve saving in energy or water or contributes in environment protection.
  3. Contributes in spatial development.

The executive rules will limit the controls and organizing legislations to consider that the project is achieving these considerations.

 

 

Article (16)

 

Ownership transfer of economic units

The economic units which are targeted to ownership transfer and which achieve the targets and conditions stipulated in this law entertain the benefits and exemptions stipulated in it in case it is developed or re habilitated or managed and operated.  GPC will issue decision concerning it.

 

Article (17)

 

Real estate use

With the exception of prevailing regulations concerning ownership, the investor has right to use the necessary real estate or operate the project whether public or private according the status and conditions of the executive rules.

 

Article (18)

 

Conducting the project

The project’s ownership may be transferred totally or partially to another investor by approval of the administrative authority and the new owner will replace the previous owner in the rights, duties and obligations according legislations of this law and other regulations.  The executive rules will limit the conditions and status for transfer of ownership.

 

Article (19)

 

Violations

If it is proved that investor violates any legislations of this law, he will be warned by the executive authority to correct the violation during a suitable period stated in the warning; otherwise the administrative authority will deprive the project from some decided benefits and exemptions in this law or withdraw the licenses granted to it or to submit the case to the specialized judiciary authorities to oblige the investor to settle the proverbial exemption.

This is according the conditions and arrangements of the executive rules for this law.

 

Article (20)

 

License withdrawal

Approvals and licenses for the project may be withdrawn or the project may be finally liquidated in the following cases:

  1. On starting execution of the project or non completion of execution on the fixed date without justification.
  2. Infraction of legislations stipulated in this law.

 

 

Article (21)

 

Grievance

The investor submits his grievance in writing on any decision issued for violation of legislations of this law within 30 days from date of notification by letter with acknowledgement of receipt.  The executive rules will determine the authority for appeal and grievance procedures.

 

Article (22)

 

Project’s accountancy documents

Project’s owner should keep legal books and project’s necessary final accounts according the prevailing regulations and to prepare the annual balance sheet and final accounts approved by legal accountant according the conditions stipulated in the commercial activity law and professional measures.

 

Article (23)

 

Project’s guarantee

 Project may not be nationalized or expropriated or taken over by force or confiscated or sequestrated or reserved or frozen or subjected to measures having the same effect  without legal or judicial legislation and should be with fair compensation on condition that procedures will be on non discrepancy way.  The compensation will be calculated on the basis of fair market value of the project on taking procedures.  Compensation value will be transferred in convertible currencies during a period not exceeding one year from date of issuing the law or legislation with the exchange rates which are valid on transfer date.

 

Article (24)

 

Settlement of disputes

Any dispute between the investor and the state whether by investor’s deeds or as a result of procedures taken by the state against him will be submitted to state’s specialized courts.  If there are bilateral agreements between the state and the state of which the investor or multilateral conventions to which the state belongs to the investor are parties containing provisions relating to conciliations or arbitration or special agreements between the investor and the state stipulating arbitration condition.

 

Article (25)

 

Fees for services

A decision will be issued by the secretary upon offer from the administrative authority fixing the fees to be collected from the investor for rendering services.

 

 

 

 

Article (26)

 

Magistrate

Administrative authority’s officials who are nominated by decision from the concerned secretary will have the powers of magistrate control for supervising execution of legislations of this law as well as controlling and proving violations for submission to the concerned authority and they will inspect the investment projects and view the books and documents concerning its activity.  Control authorities and other concerned authorities will inform the administrative authority and coordinate with it before any inspection and control works in investment projects which are licensed for investment in accordance with the legislations of this law.

 

Article (27)

 

Exclusion from the scope of this law

Legislations of this law will not be applied on national and foreign capitals invested or will be invested in oil and gas projects.

 

Article (28)

 

Validity of regulations organizing the economic activity

Legislations of regulations organizing the economic activity will be applied on those subjected to legislations of this law if no special stipulation is stated.

 

Article (29)

 

Executive rules

The executive rules will be issued by GPC decision upon submission from the secretary.

 

Article (30)

 

Cancellation of previous laws

To cancel Law No. 5 for 1997 encouraging investment of foreign capitals and its amendments, Law No. 6 for 2007 encouraging investment of national capitals and Article (10) of Law No. 7 for 2004 concerning tourism.  Also any legislation contradicting with the legislations of this law is cancelled.

The legislations of this law will apply on all investment projects, documents and acts in accordance with the previously mentioned laws in this article at the time of issuing this law without affecting the benefits and exemptions granted before its issuance.

Work will continue with the executive rules and decisions which are issued according the legislations of the mentioned laws without contradicting with its legislations until the executive rules of this law are issued.

 

 

 

 

Article (31)

 

Publication of Law

This law to be applied from date of publication

 

People’s Congress

Issued 28.01.2010 

 

 

 

   

 

 

 

 

 
 

 

 

 


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