Doing Business in Libya

Business and Economic Overview

The Civil War, combined with decreased oil prices, has taken its toll on the Libyan economy; mineral products, such as petroleum gas and crude petroleum, account for roughly 95% of Libya’s exports but production has drastically fallen to 25% of 2010 levels, leading to an annualised decrease of 28% in export levels since 2010. Thus, government currency reserves are rapidly being depleted.

Conflict, systemic corruption and a lack of stable judiciary and legislation provide major obstacles to doing business in Libya.

Indeed, Libya ranks 167 of 190 in the World Bank’s Starting a Business Index and 185 of 190 in their Ease of Doing Business rankings.

However, commercial opportunities do exist in Libya.

Extensive reconstruction and investment will be necessary once the security situation has stabilised.

Libya’s energy sector is likely to provide particular appeal as its oil and gas reserves are estimated at 75 and 94 years, respectively, of standard production. As such, major opportunities exist in the development of energy infrastructure, mineral transport and energy security, although the political turmoil effects current opportunities in this sector and the July Draft Constitution states that natural resources shall belong to the state, with a proportion of returns to be allocated to the state ‘for the benefit of future generations’.

Roughly 10% of GDP is spent on healthcare, with the majority of medical suppliers being European: the UK, Italians, Swiss and Germans are at the forefront of the market.

Market entry is best through a local distributor or agent, and changes to Libyan law requires a partnership with a local partner regardless. However, owing to the Libyan foreign currency liquidity crisis firms have been advised in the past to do business with the private sector and to seek payment upfront.

It should also be confirmed that Libyan persons or entities are not on sanctions list, before doing business.

 

References

http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Annual-Reports/English/DB2018-Full-Report.pdf.

http://www.business-anti-corruption.com/country-profiles/libya.

http://pubdocs.worldbank.org/en/282581475460786200/Libya-MEM-Fall-2016-ENG.pdfhttps://www.cia.gov/library/publications/the-world-factbook/geos/ly.htmlhttp://www.imf.org/external/datamapper/NGDPD@WEO/LBY, Current prices, October 2017.

http://www.ecfr.eu/mena/mapping_libya_conflict.

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