General Information

Introduction

Capital(s): Tripoli
Population: 5,765,563 (2007)
Area: 1,759,540 Km²
Currency: 1 Libyan dinar = 1000 dirhams
Language(s): Arabic
Time Zone: GMT+0h00
ISO Code: LY
Dialing Code: +218

This profile of Libya and doing business there is an overview. From the drop-down menus at the top of this page, you can access a wide range of additional business information on Libya provided both by and by our clients and partners.

The first drop-down menu provides access to more detailed pages on the country’s economy, as well as to profiles of Libya’s major industry sectors, particularly mining and oil and gas.

The third drop-down menu allows you to search our various databases of Libyan business information. This includes companies, organisations including government departments, personalities, projects and facilities.

Finally, the fourth drop-down menu allows you to access a range of Internet applications aimed at assisting you to conduct business more effectively.

The news headlines on this page are updated on a daily basis. You can click on Other News at the end of the headlines in order to get the country’s business news stretching back over several years. Because this overview is only updated every few months, you should use recent news items to build an up to date picture of Libya’s business environment.

Geography

Libya is located in North Africa and lies between latitudes 33°N and approximately 20°N and longitudes 8°E and 25°E. It is bordered by Egypt to the east, Sudan to the south-east, Chad and Niger to the south with Algeria and Tunisia to the west and north-west respectively.

The capital city is Tripoli while other important cities include Sabha and the ports of Benghazi, Tubruq, Mersa rega and Misrata.

Politics

Mu’ammar al-Qadhafi came into power in 1969 as a result of his leadership of a military coup. He became the de facto head of state, not occupying any official position, a position he still occupies. He retains control of the country by virtue of his influence over the masses as well as the fact that he controls a large security apparatus. He has used these tactics to exercise absolute power with a small group of trusted advisors.

Although Mr Qadhafi has a dictatorial control over the government, he was initially able to increase public participation in the political process. This satisfied the population for a while but the government was later forced to take other measures to quell popular dissatisfaction. This mainly arose as a result of the shortage of consumer goods as well as the fact that the country was losing a war with Chad. Responding to the dissatisfaction, Mr Qadhafi decided to allow private businesses to operate in the country as well as the institution of other reforms.

Although various reforms have been instituted within the economic and to a certain extent, the political structures, there is still political dissent. The result has often been gross violations of human rights with summary executions as well as many accounts of torture.

The country’s standing in the international community is mostly unfavourable due to Libya’s former support of terrorism. With the implementation of sanctions by the US as well as temporary sanctions by the UN, the country has been isolated. The situation has begun to ease slightly as oil companies started to compete to tap the country’s oil and gas resources, followed by other companies providing support services. In order to compete with European oil companies, the US government is slowly allowing US companies to participate in Libya.

Economy

Despite Libya’s government still exercising a firm hold on its socialist-oriented economy , Libya’s economy has undergone a gradual process of liberalisation by the government since 2004, This came in the form of the issuance of regulations for the privatisation of certain government-owned enterprises and private businesses are allowed to operate in the country.

Despite the fact that it is a relatively wealthy country, Libya is still faced with many economic problems. Being an oil producer, it is especially vulnerable to the fluctuations in the international oil prices. Import restrictions have often resulted in shortages of basic foodstuffs.

The lifting of U.S. sanctions on Libya (2004) saw a flurry of interest by oil companies looking to expand production in the country. Libya currently produces less than half its 1970 high of 3.3 million barrels a day. The country’s proven reserves of oil are estimated at a modest 30 billion barrels, compared with 113 billion barrels in Iraq, but some analysts indicate that its actual reserves could be much larger. Libya planned in June 2004 to boost its crude oil output on a short-term, or “surge,” basis to 1.62 million barrels a day, an 8%, or 112,000 b/d, rise from the May 2004 level. The country expects to increase its oil production capacity to two million barrels a day in four or five years. Shell, Talisman, Statoil, ENI and Pioneer, amongst others, have begun, or have expressed an interest in production in the country. ConocoPhillips, Marathon and Amerada Hess, which make up the Oasis Group, are seeking an extension of their expiring leases that were left dormant since 1986 when expanded U.S. sanctions forced them to pull out of Libya. In December 2003, the National Oil Company (NOC) said it had awarded a US $102.2-million oil and gas exploration contract to a consortium which includes Australian, Greek and Spanish firms. The consortium will search for oil and gas in the block M15 in the Marzouk area and blocks 515, 542, 550 and 564 in the region of Syrte.

Libya has promoted the formation of a regional economic union with its neighbours. The proposed union would ultimately result in an integration of national economies as well as common monetary and fiscal policies. The short term goal of the union would be an encouragement of investment in sectors such as agriculture and fishing. The Libyan government is also involved in efforts to promote its tourism sector.

Industry Sectors

The oil sector of Libya is by far the most important in terms of revenue, it has resulted in the upliftment of the quality of life of the Libyan people. Agriculture is the second largest sector in the country’s economy.

Investment

Since the UN sanctions were lifted in 1999, the government of Libya has tried to make the country attractive to foreign investors, though the US maintains an embargo. The US government allowed selected oil companies to renegotiate contracts in the country. It is however important to bear in mind the US Treasury sanctions which prevent any unauthorized transactions between US citizens and those of Libyan origin. It is advisable for Us companies to consult the relevant US authorities before attempting investment in the country.

Libya has an undeveloped infrastructure and a bloated public sector.

But there are some encouraging signs for investors.

Advantages of investment in Libya: 1 – A unified system. 2 – Availability of many commercial seaports & international airports as well as a massive network of paved roads covering all of the Jamahiriya. 3 – Taking advantages of the regional agreements concluded with African & Arab countries, especially the Arab tariff agreements. 4 – An abundant and cheap workforce and skilled young people. 5 – Availability of raw material and energy sources, traditional and alternative, such as natural gas. 6 – Strategic placement of external markets, particularly in the African regions. Industrial section strategy: The strategy of the government consists in the reconstitution of internal markets in order to replace imports by an internal but growing, profitable, sustainable and competitive production that generates expanding tax revenues in a global market, as per the following strategic objectives: 1 – Increase the participation of the private sector in manufacturing industry. 2 – Modernize the productive sector with the purchase of new technologies and training of human resources. 3 – Create new jobs in the sector. 4 – Concentrate industries in industrial development zones. 5 – Increase productivity, quality and capacity of industrial enterprises. 6 – Attract direct foreign investment. 7 – Increase industrial inputs of national origins. 8 – Promote exports. 9 – Active participation of the government in the creation of a good environment for private business.

Trade

Libya has been the target of US trade sanctions since 1986 as a result of the country’s support of terrorism. This trade ban has had a stifling effect on the Libyan economy. Then the situation was made worse by the Lockerbie incident.

The UN then imposed sanctions on the country that resulted in the temporary freezing of assets abroad as well as certain oil assets. These sanctions were finally suspended in 1999 and the country has tried to attract more trade partners as a result.

The countrys main export partners include Italy, Germany, Spain, France, Turkey and Tunisia. Crude oil and refined petroleum products are exported to these countries.

Imported products include machinery, transport equipment, food and manufactured goods. Countries such as Italy, Germany, Tunisia, the UK and France provide Libya with these products.

Business Travel

There are various flights to the country. Libya has recently begun a process initiated by Mr Qadhafi in which the aim is to resume as many flights as possible with a variety of European cities. The first of these was with Paris, France and the inaugural flight took off on February 25 2002. There are now regular weekly flights from on a Thursday.

In order to enter the country it is necessary to be in possession of a visa. There are only certain Arab and African countries where this is not required. Visas are usually valid for 3 months from the date of issue and are valid for one month in Libya. One is also required to fill in Immigration and Currency forms upon arrival in the country. The Libyan economy works mainly on a cash-only basis and credit cards are not widely accepted in the country.

While in the country, some of the cities are serviced by the national air carrier while it is also possible to travel in taxis. Buses are also available as well as rental car facilities.

US citizens are prohibited from entering the country unless they have obtained special permission from the State Department. This is as a result of the US sanctions imposed against Libya.

Travel regulations in all countries can change from day to day so it is important to check the information with the embassy or consulate at the time of making travel bookings.

Communications and Infrastructure

Libya first started with a cellular network in 1996. The telecommunications network is currently being modernised. There is Internet access available although there is only one service provider. However, the number of Internet users is gradually increasing, with Internet access becoming more popular, with the emergence of internet cafes around town.

The rail infrastructure in the country is non-existent, there has not been a railroad in operation since 1965 when existing services were disestablished. There have been various plans to construct a new rail system but these continue to be delayed.

But the government has identified the area of infrastructure as one that needs immediate attention has allocated a sizeable amount of the budget to the upgrading of this sector.

Risk

There are various elements of risk to investing in Libya. The transport infrastructure is poor. The legal system in the country is also very uncertain. This, coupled with a government known for its arbitrary decision-making, means that investors rights may not be as well protected as they are in other countries. These risks are however, offset by the fact that by establishing the various free zones in the country, the government has taken significant steps to providing a safer environment for investors.

Business Assistance

Libya has a number of chambers of commerce and industry and details of these can be found via our Organisation Search, as can details of relevant government departments. MBendi’s < Company Search allows interested parties to find details of many Libyan companies

Memberships (4)

International Finance Corporation, Multilateral Investment Guarantee Agency, Common Market for Eastern and Southern Africa, Arab Maghreb Union

Event Venues (2)

Al-Mahari Hotel, Tripoli International Fair :

Facilities (84)

Abu-Kammash, Academy of Graduate Studies, Ain, Al wafa, Al-Arab Medical University, al-Burayqah, Al-Fatah University, Amal – Libya, Amal-Ras Lanuf, Arshad, Assamad, Assumud Field, Attahaddy Field, Attahady Field, Az Zawiya, Azzawiya, Bahi, Beghazi North, Beida, Brega Field

Travel Facilities

Accommodation (29): Ai-kabir Hotel, Al-Mahari Hotel, Anouzha hotel, Atlas Hotel – Benghazi, Bab Al Bahr Hotel, Beach Annex, Benghazi Hostel, Corinthia Bab Africa Hotel, Cyrene Hostel, Funduq Ayyussar, Funduq Gasr al-Bayda, Gezira Palace Hotel, Gezira Palace Hotel, Ghadames Winzrik Motel, Grand Hotel – Funduq Al – Kebir
Attractions (18): Acacus Mountain Rock Paintings, Acacus Mountains, Apollonia, Arch of Marcus Aurelius, Assai al-Hamra, Benghazi Souk, Cyrene, Garabulli Protected Area, Ghadames, Ghat Mosque, Gurgi Mosque, Jamahiriya Museum, Karamanli Mosque, Kouf National Park, Leptis Magna
Transport related (19): Abu Kamaash Port, Alkhoms Port, As Sidr, Benghazi Port, Benghazi Benina International, Darnah, Marsa Al Barayqah, Marsa Al Hilal, Marsa Sabratal, Port Misratah, Port Tripoli, Sebha International, Tarabullis, Tripoli International Airport, Tripoli Port