Business entities in Libya

LLC setup in Libya Since 2003, Healy Consultants provides our Clients with the optimum corporate structures for doing business in Libya. Wholly foreign owned companies in Libya are limited to certain sectors only. So, our Clients will be better served by setting up joint ventures entities in the form of LLCs or Joint Stock companies. Alternatively, our Clients may choose to setup branch offices or representative offices in Libya.

The Libyan limited liability company (LLC)

A foreign investor may choose to establish a wholly foreign owned LLC in Libya if the initial share capital deposited is higher than US$3.7 million. Such an entity can operate in certain sectors of the Libyan economy, including i) industry ii) heath care iii) tourism iv) services and v) agriculture. If the company corporate structure includes a Libyan partner holding 50% shares, the capital requirement will be reduced to US$1.5 million;
An LLC can be setup with 1 director and 1 shareholder. While the company can be 100% foreign owned, the director must be a Libyan national. Furthermore, our Client will be required to lease office space in Libya before company incorporation.

The Libyan joint stock company (JSC)

This Libya business setup allows non-Libyan residents to only own up to 49% stake in the entity. However, it is possible for our Clients to obtain the approval from the Ministry of Economy to own up to 60% of stake in the company;
A JSC must have at least 10 shareholders, each of whom can not hold more than 10% of the shares. The minimum capital required to setup this entity is US$730,000. Furthermore, our Client will be required to appoint at least 1 Libyan national as the chairman of the company’s board of directors.

The Libya branch

Foreign companies looking to do business in Libya may seek to setup a branch office in Libya. For this purpose, the branch office must appoint a Libyan resident manager and deposit a minimum capital of US$184,000 in a local bank prior to commencing operations;
A branch office may only engage in the following activities: i) oil and gas activities ii) telecommunication and information technology iii) contracting and civil works iv) electricity works v) industrial activities vi) environmental protection vii) planning and surveying and viii) contracting and civil works.

The Libya representative office

Foreign entities also have the option of setting up a representative office in Libya. This entity is not permitted to engage in any commercial or profit making activities in the country. Consequently, its activities are limited to i)market research and data collection and ii) facilitating contracts between parent companies and third parties;
This Libya business setup must be registered with the Ministry of Economy. Furthermore, this entity must also have a bank account with Libyan bank.

Comparison table between Libya business entities

	LLC	JSC	Branch office	Rep office
How long to set the company up?	12 weeks	16 weeks	35 weeks	35 weeks
How long to open company bank account?	4 weeks	4 weeks	4 weeks	4 weeks
Legal liability?	Limited	Limited	Unlimited	Unlimited
Wholly foreign owned?	Yes	No	NA	NA
Minimum capital required?	US$3.7 million	US$730,000	US$184,000	0
File annual tax return?	Yes	Yes	Yes	No
Tax registration certificate required?	Yes	Yes	Yes	No
Recommended corporate bank account?	Libyan Foreign Bank	Bank of Commerce & Development	National Commercial Bank	Aman Bank Libya
Does our Client need to travel?	No	No	No	No
Resident manager required?	Yes	Yes	Yes	No
Resident shareholder required?	No	Yes	NA	NA
Minimum directors allowed?	1	2	NA	NA
Minimum shareholders?	1	10	NA	NA
Tax identification code (TIN) needed?	Yes	Yes	Yes	No
Libya resident company secretary required?	No	No	No	No
Corporate shareholders allowed?	Yes	Yes	Yes	Yes
Libya corporate tax rate?	20%	20%	20%	0%
Annual financial statements required?	Yes	Yes	Yes	No
Statutory audit required?	Yes	Yes	Yes	Yes
Regulated by?	Ministry of Economy	Ministry of Economy	Ministry of Economy	Ministry of Economy
Allowed to issue sales invoices?	Yes	Yes	Yes	No
Allowed to sign contracts?	Yes	Yes	Yes	No
Allowed to import and export goods?	Yes	Yes	Yes	No
Can rent an office space in Libya?	Yes	Yes	Yes	Yes
Can buy Libya property?	Yes	Yes	Yes	No
Can own equity in other Libya companies?	Yes	Yes	Yes	No
Total Libya business setup costs in Yr. 1	US$20,370	US$30,370	US$24,650	US$19,550
Subsequent annual costs (incl. accounting and tax fee)	US$8,150	US$10,150	US$8,150	US$5,400
Sample engagement invoice	View invoice PDF	View invoice PDF	View invoice PDF	View invoice PDF