by Sami Zaptia.
Tripoli, 19 May:
Last week a new decree by the Minister of Economy (No (103) 2012) setting out the conditions . . .[restrict]and percentages that non-Libyans can own in Libyan companies was released.
The decree is entitled ‘The participation of foreigners in partnership companies and the opening of branch and representative offices for foreign companies in Libya’.
The decree allows for both foreign individuals and companies to partner with Libyan individuals and Libyan companies.
The partnership companies can either be shareholding (musahama) companies or limited (mahduda) companies.
For the larger shareholding companies, the capital must be a minimum of one million dinars of which 300,000 must be paid up at the stage of establishment.
The smaller limited companies must have a minimum capital of 50,000 dinars.
The maximum shareholding allowed for non-Libyans is 65 percent, but in exceptional situations the Ministry of Economy can raise this limit to a maximum of 80 percent.
There are 12 areas of activity where foreign partnerships are prohibited from operating, including retail and wholesaling, importation, catering, agencies/distributorships, auditing and legal firms, quarrying and contracting and construction for contracts less than 30 million Libyan dinars.
This decree excludes companies which already have legally set up branches in Libya at the time of the passing of this decree and which are contracted to implement projects – until the expiry of their contracts .These companies must thereafter renew their documentation upon expiry.
Companies with no branches or partnership agreements can apply for representative offices for market research etc (article 14), without the right to sign contracts. Representative offices can be opened for 2 years and are renewable for another 2 years only once. Representative offices discovered to be transacting commercial activities would be closed.
Article 18 of the decree stipulates that applicants to form Libyan-foreign companies shall receive a reply regarding their application, either way, within 30 working days.
Companies wishing to renew their presence in Libya should do so 3 months before the expiry of their licence.
Finally the decree in its ultimate article No.(21), stipulates that this decree is in force as of its date of publication (13 May 2012), and that Libyan-foreign partnership companies must legalise their status within one year of the passing of this decree.
(This was a summary of the decree. Libya Herald advises readers to seek the advice of a reputable legal firm in Libya for a more accurate, comprehensive and value-added interpretation of this decree) [/restrict]