Libya is a country that currently has great economic potential. This is thanks to the abundance of natural resources, young population, and strategic location. For what it is, a rather striking location for the businessmen of the world. If you want to be part of this group of investors who want to operate their business operations in the country, it is important to know everything about business law in Libya. This law regulates the requirements and conditions for companies in the country, therein lies its importance.
In this article, we offer you a guide that shows you everything about business law in Libya. The idea is to provide information on the main aspects that are of interest to new investors and businessmen interested in the market. In addition, we will give you a brief introduction to the types of businesses that exist in Libya according to the law. Finally, you will see some tips and recommendations for doing business in this country safely and successfully.
What is the Business Expansion Law in Libya?
In order to understand the Libya business expansion law, you have to understand certain important aspects. The first of these is that Libya has a complex legal system. In addition, Islamic law, civil law, and customary law all influence this. On the other hand, we find a legal framework for companies with complex laws and regulations that govern the activities of companies.
Law number 23 of 2010 on commercial activity: The law regulates all regulations that are related to commercial transactions and contractual agreements. In addition, it provides the guidelines for doing business and establishes the corresponding sanctions for infractions.
Law number 12 of 2010 on work: Stipulates the rules and regulations related to labor relations, contracts, salaries, safety at work, etc.
Law number 10 of 2010 on customs: It is in charge of regulating all the rules and procedures that are related to import and export activities. In addition, you will be able to find customs duties, regulations, and documents for merchandise that have restrictions or prohibitions.
Law number 7 of 2010 on income taxes: The entire framework of income tax for legal and natural persons in Libya, you can find it in detail. It also includes the provisions to be able to calculate the taxable income, exemptions, and reductions
Investment Law No. 9 of 2010: This establishes the legal framework for all foreign and local investments in Libya. In addition, you will see the incentives, rights, and obligations of investors.
Law number 11 of 2010 on companies: This law regulates the constitution of companies, their restructuring, their government, and their liquidation. In addition, it determines the type of commercial entities that exists in Libya, legal personality, rights, and obligations of shareholders and directors.
Importance of Business Law in Libya
Knowing what is business expansion law, now you will see what is the importance of business law in Libya. The business consultant in Libya is fundamental because it is in charge of regulating the commercial activities of high-level users in the country. Also, this business law has a wide scope in fields like business law, corporate law, company law, etc.
In business law, you can also observe all the forms of establishments that have authorization to do business in the country. Among these, you find joint ventures, branches, and licenses. In addition, this law is of the utmost importance so that legal security can be guaranteed, the protection of all investors, and support economic development in Libya.
Libyan business law states that companies that have been formed in Libya must be managed by Libyans. On the other hand, foreign companies that are operating in Libya often do this through a branch or subsidiary branch. However, it is extremely important to note that there are restrictions on activities in Libya unless you have a Libyan partner.
If a foreign company wants to establish its presence in Libya, it must opt for some of the ways. Among them, you find the joint venture, which is a public limited company with a minimum of 35% ownership by Libya. On the other hand, you found a license, which is the Ministry of Economy and Industry that is in charge of granting this permit. Finally, the branch is an extension of the foreign company in Libya.
Types of Business Management in Libya
You find that business law management in Libya is a set of rules. These norms are in charge of regulating the different forms of organization and administration of companies that are within the country. In this way, business management law is based on Islamic, civil, and commercial law, and covers a large number of aspects.
Among these aspects, you find the constitution, responsibility, structure, accounting, financing, auditing, and dissolution of companies in the country. Due to the great scope of this law, it can seem very extensive and confusing to people. For this reason, it is important to know in detail everything that this law covers and what you can find in it.
Due to the importance of this law for those people who want to do business in Libya. Next, you will see the types of business management law in Libya so that you can better understand everything that this law encompasses. In addition, each of these types will be explained in detail so that you can easily understand these laws.
Worker Rights and Safety
Currently, Libya is making great strides in everything that concerns the protection of workers’ rights. These new regulations cover different issues. For instance, remuneration, working hours, contractual guidelines, and safety regulations in the workplace. The labor safety law, in particular, has the purpose of mitigating labor accidents. In turn, it improves general measures on the subject.
The contractual guidelines in Libya are all those norms that regulate labor relations, between employers and employees. In addition, they control the obligations and rights of both parties. The Libyan labor code establishes that the employment contract must be in writing. In it, they have to contain the personal data of both parties. For instance, the nature of the work, the termination conditions, the duration, and more.
On the other hand, within this new regulation, the hours of work in Libya are established. This will depend on the type of contract, the sector of activity, and the specific conditions of each employer and employee. However, according to the labor code in Libya, an ordinary working day cannot exceed 48 hours per week. Which must be distributed in 6 days of work and 1 day of rest.
Finally, the issue of safety standards in workplaces for workers in Libya will be taken into account. These rules and measures aim to reduce and prevent all risks of accidents, illnesses, and injuries at work. The most important thing is that all companies must provide workplaces with ideal conditions. That is good lighting, ventilation, hygiene, temperature, and more. This is in order to guarantee the health and safety of workers. In addition, you must provide employees with the necessary information and training.
The tax laws of the country establish the guidelines for collecting taxes. The rules on taxes on production and income are of the utmost importance for companies. The reason is that they provide specific regulations on taxable income, exemptions, deductions, and the calculation of these taxes.
Among the most important guidelines on business taxes in Libya were created to bring order to tax matters. In other words, these are the principles and regulations that guide the taxation of companies’ economic activities. This is for all companies, both those that operate in Libya or have ties to it.
All tax regulations are updated periodically to adapt to changes in the country. This is for all areas, social, economic, and technological. Especially, those changes that affect commercial activities and tax collection.
One of the most important tax rules is those provided by the Organization for Economic Cooperation and Development (OECD). These establish international standards and good practice recommendations in business tax matters. For instance, the global minimum tax for multinational companies is 15%.
The national guidelines are those that regulate specific aspects of the crew of companies in Libya. Among the most important is the tax rate of 20% for the income tax of legal entities. In addition, exemptions and reductions for certain activities or sectors are also included. All these companies must know all the declaration and payment requirements, sanction and inspection procedures, and tax and accounting obligations.
Finally, there are the multilateral or bilateral guidelines. These establish the conventions or agreements between Libya and other countries or entities, in order to avoid double taxation. Not only that, they also help prevent tax evasion, facilitate trade and investment, encourage information cooperation, and more.
Intellectual Property Protection
In order to promote innovation and creativity, it is essential to protect intellectual property rights. Libya’s intellectual property law allows artists, companies, and inventors to safeguard their unique ideas and creations. As a result, a culture of innovation and healthy competition is promoted in the country.
Libya’s copyright law is a set of principles and rules, which protect intellectual creations. For instance, artistic, literary, scientific works, inventions, brands, designs, computer programs, and more.
One of the aspects of intellectual property law is Libya’s adherence to international conventions on intellectual property. For example, the Paris Convention for the Protection of Industrial Property and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). In addition, the Berne Convention for the Protection of Literary and Artistic Works.
There are also national laws on intellectual property. Among them are related rights, Law No. 40 of 1956 on the protection of invention patents and Law No. 9 of 1968 on the protection of copyright and related rights. Another important law is Law No. 57 of 1970 on the protection of trademarks and trade names.
All these aspects bring many benefits for people interested in innovating or designing. Among the most important are:
- Protect the rights of creators and owners of their works and creations. That is, recognize their authorship and grant them moral and economic benefits.
- Stimulate innovation, development, and cultural exchange between creators and users of intellectual works.
- Protects business research and development activities.
- Blocks competitive products, deterring potential entrants. What allows to clear a technological way for the next participation in the labor market.
- Contribute to compliance with the principles of transparency and access to registry information by citizens. Which facilitates the respect and knowledge of your intellectual property rights.
Libya has a great interest in attracting foreign investment, which is why it implemented the business development law. It establishes a comprehensive law, which provides a specific path for local and foreign investors; thus, stipulating their obligations, rights, and the incentives they can take advantage of. Thanks to this transparency, investor confidence can be increased and has the potential to boost economic growth.
Foreign direct investment (FDI) is the investment made by an entity resident in a country or an entity resident in another nation. This is in order to establish a long relationship and exercise significant influence in the management of the receiving entity. In addition, FDI can contribute to economic growth, innovation, technological development, and job creation.
To promote foreign investment, countries can adopt different measures that are interesting for investors. In the case of Libya, different rights are granted to any businessman with the intention of investing. The rights of foreign investors in Libya will depend on the agreements and regulations that regulate the country. Among the rights for foreign investors in Libya usually include.
- Right to equitable and fair treatment, by international law, by the country receiving the investment.
- Right to full security and constant protection for your investments. This includes protection against nationalization or expropriation without ideal compensation.
- There is also the right to resort to international arbitration in the event of a dispute with the country receiving the investment.
- Finally, there is the right to freely transfer dividends, interest, profits, and other income derived from investments.
The objectives of the law
The objective of labor law in Libya is to regulate the relations between employers and employees. In addition, you want to protect the interests and rights of both parties. All this, by the principles of social justice and economic development. Business law in Libya covers several important topics, including:
- Everything related to the employment contract. That is the duration, its modalities, termination, and suspension.
- The working conditions. Workdays, vacations, salary, security, licenses, and occupational health are included.
- The rights and duties of employees and employers. Among the most important, are collective bargaining, the right to strike, freedom of association, the duty of loyalty, and more.
- Social benefits. In other words, unemployment insurance, social security, compensation for occupational diseases or accidents, pensions, and others.
- Finally, labor inspection, claim channels, solutions to labor conflicts, and administrative sanctions.
It is important to mention that there is also a legal framework for companies in Libya. Its main objective is to establish the norms and procedures that regulate the operation, supervision, and constitution. Thus, with the dissolution of companies in this nation, the obligations and rights concerning the State, customers, workers, and society in general. The legal framework for companies in Libya covers different topics. For instance, types and forms of company, conditions, and restrictions for the development of commercial activities, taxes, and more.