construction project information, libya

Construction Project Information, Libya 1

CONSTRUCTION PROJECT INFORMATION (LIBYA)

Part 1: Construction Information

1. Source for seeking construction project/project owner

1.1 Reference Source: Housing & Infrastructure Board (HIB)

1.2 Contact person: Dr. Ibrahim M. Shoukrie, Director of Follow up & Information

Department

1.3 Telephone: (218) 21 3621204, Mobile: (218) 91 2189111

1.4 Fax: (218) 21 3621204

1.5 Email: [email protected]

2.

- Draft contract for construction or related work

- List of materials & prices for construct work everdone before.

- Any traditional practice in construction contract (commission, etc)

CONSTRUCTION MATERIAL COSTS:

Securing adequate resources is the key challenge in a country undersupplied with cement

and iron. There is also a need for batching plants, as commented by one of the new US-

linked construction companies. Which have just begun operations in Libya. It is

estimated that Libya requires about 8m tones of cement annually but produces merely

4.5m tones. Foreign companies with large scale construction projects might consider

getting into joint ventures in order to secure resources, thereby also helping to facilitate

the construction of their own factories and plants. A shortage of concrete is well-attested,

with estimates varying for Libya's ability to provide from 60% to 80% of demand.

At present, cement production is controlled by two main partially state-owned

companies, the Arabian Cement Company and the Libyan Cement Company. The main

production facilities are located in Benghazi, Derna, Homs and Khamis. However,

around 80% of their production capacity is currently assigned to government projects. To

mailto:[email protected]


put this into context, the Great Man-Made River project alone has thus far consumed

approximately 8m tones of clinker.

According to major cement producers, annual demand for clinker is forecast to increase

to 12m tones by 2010, with government projects alone forecasting the requirement of

some 16m tones. Thus, the focus is on creating an import market for clinker. The clinker

price is controlled by the government and has been fixed at LD65 ($53) per tonne.

Companies emphasize a need to produce their own aggregate. Steel supply is currently

believed to be sufficient, although the quality is not up to international standards and

distribution lines are patchy. The Libyan Iron and Steel Company in Misurata is the main

steel producer, but the company produces only specific-length rods, which is a feature

that needs to be considered to avoid import costs. Contractors stress the importance of

considering local availability of materials and factoring this into designs. Steel shortages

and rapid price hikes in 2007 meant the cost of importing higher-grade steel from abroad

added a considerable factor to construction costs, particularly with the evolution of tower

construction projects in the central business areas.

Construction costs have rocketed mostly due to high global prices of raw materials and a

shortage across the region, particularly with the new export restrictions on Egyptian

cement. The coastal land of Tripoli, where the majority of commercial construction is

taking place, is also a costly and difficult construction site, requiring deep piling and

imported technologies. Construction companies warn that many contractors have not

factored this into initial costs for towers constructed in sand. Non-payment has been

major obstacle, with few upfront payments offered on tenders. But according to

international contractors working on government tenders, payment of up to 30% are

made in advance, so subcontracting is accessible for foreign companies.


Project Sector Value (L.D)

2204 housing units (Aljabal Algharbi) Housing 159,871,295

Integrated Utilities (Sourman City) Infrastructure 179,593,420

Integrated utilities (Tarhouna) Infrastructure 158,978,386

Integrated utilities (Alazizia City) Infrastructure 40,078,854

Integrated utilities (Alrejban City) Infrastructure 26,000,000

992 housing units with integrated utilities Housing/Infrastructure 103,422,560

Integrated Utilities (Benghazi City) Infrastructure 104,237,978

Project Sector Value (L.D)

Integrated utilities (Zaletin City) Infrastructure 584,427,313

Integrated utilities (Alkhoms City) Infrastructure 171,886,101

Integrated utilities (Morzoug City) Infrastructure 199,046,972

Design & execution of Tripoli 3rd ring road

(Tripoli)

Infrastructure 458,000,000

Industrial Zone Design (Derna) Infrastructure 2,000,000

Design of Sebha 3rd ring road (Sebha) Infrastructure 1,669,000

AAC Plant (Sebha) Construction 1,000,000

Alamahari Hotel (Tripoli) Construction 360,000

Lake Rehabilitation Project (Benghazi) Environmental 135,000

EXAMPLES OF THE MOST PRESTIGIOUS DEVELOPMENTS IN THE

COUNTRY

Residential Complex in Southern Zawarah

Developer: Organization for Development of Administrative Centres

Cost: $525m

Expected Completion: September 2012


Built on 3,000,000 sq meters of land. the complex will consist of 5,000 apartments,

together with several shopping malls, schools and sports and leisure centers.

Al Fateh university expansion project

Developer: Organisation for Development of

Administrative Centres

Expected Completion: 2012

The university will be redesigned, upgrading infrastructure, building new faculties,

renovating existing facilities and incorporating new landscaping .

Al ghazala Tripoli intercontinental

Developer: Magna Holdings

Cost: $166 m

Expected Completion: Full opening in early 2010

Located in the heart of Tripoli the project consists of a five-star hotel with 360 rooms and

suites, plus 45 serviced apartments, 2000-person-c:apacit)'ballroom, four main food

outlets, gym and outdoor swimming pool .

Residential complex in Solog

Developer: Organization for Development of Administrative Centers

Cost: SG30m

Expected Completion: December 2009

- Solog residential is a public housing project covering 6,810,000 sq meters and

consisting of 3928 houses and 1072 apartments with all necessary amenities .

Tillil beach resort

Developer De Cameron

Cost: $ 350m

Expected Completion: First phase mid-2010/ The Panamanian developer de Cameron

will be constructing an 800-room five-star hotel surrounded with luxury bungalows and

villas, as well as an 18-hole championship golf course and other recreational facilities.


Developer: Beroko

Cost: $265m

Located on the seaside near the largest roundabout in Libya, this development consists of

a marina, two hotels wood - and possibly the new building for Congress.

Al Menchia real estate development

Developer National Union Holding Co

Cost: $100m

Expected Completion: End of 2011

In the heart of Tripoli a new mixed-use development will cover a total floor area of

65,223 sq metres with shops, a multipurpose hall. a hotel and serviced apartments. as well

as underground parking for 550 cars.

Energy City Libya

Developer: Gulf Finance House & Economic and Social

Development Fund

Cost $ 3.8bn

Energy City Libya will offer dedicated clusters for energy producers, service industries,

infrastructure or downstream industries, and shipping and trading sectors.

Palm city residences

Developer: Corinthia Group of Companies

Expected Completion: March 2009

This self-contained community consists of 408 luxury residences on a landscaped,

140,000-sq-metre water front plot near Regatta in janzour. The project features a central

piazza, shopping outlets and leisure facilities.

Benghazi hotel project

Developer United Libyan Tourist Investment Co

Cost: $170m


Expected Completion; Hand over will be in August 2009. The hotel is located on the sea

shore and will consist of 376 regular rooms, 36 suites and 6 presidential rooms. Covering

a total area of around 42,000 sq meters, it is set to become the largest hotel in the region.

Al kalaa hotel ( in the city of Sebha )

Developer; United Libyan Tourist Investment Co

Cost: $30m

This 5-star hotel will be located in the heart of Tripoli and will cover an area of 30,000 sq

meters. It will feature 180 rooms, 20 suites and 4 presidential suites as well as swimming

pools and a multi-purpose hall.

Araar beach resort ( Misurat )

Developer: Al Kahleej Tourism - Development &

Expected Completion: First phase by the end of 2011

Located in Misurata, adjacent to the free zone, the project will cover all aspects of

tourism, with various hotels, a marina, an aqua park and residential villas.

Northern alghiran complex project

Developer United Libyan Tourist Investment Co

Cost:$3.4bn

With the Brisbane Group, ULTICO will develop a housing . commercial and tourist

complex in Tripoli consisting of a 5- star hotel , a commercial centre , conference halts.a

marina, a hospital and 2500 housing units.

Ashati beach hotel ( in the city of Zwara )

Developer; United Libyan Tourist Investment Co

This 5-star hotel will cover 30,000 sq metres and will have 220 rooms, 30 suites and 4

presidential suites. It is focused on leisure and sports activities and will have tennis

courts, a diving club and several swimming pools.


Daewoo Tripoli project

Developer: Daewoo Engineering & Construction

Cost $166m

Expected Completion: End of 2010

The hotel will be located in the business centre of Tripoli with a stunning view of the sea.

It will have 370 rooms covering 36 floors and will boast a health spa, swimming pools, a

sky lounge and several restaurants.

3. List of contraction material seller/importers (concrete, iron, sanitaryware,

aluminium, glass, etc)

AL-MASAR CO. FOR CONSTRUCTON MATERIALS IMPORT

Hey Dimask, Tripoli 1. Tel.

Fax.

Email:

(218) 21 3610121, 91 2110962, 92 5298946

(218) 21 3610118

[email protected], [email protected]

TAMASOK

Al Thalata Market, St., No: 11,Tripoli

2 Tel.

Fax.

Email:

(218) 21 3601093, 91 212 5997, 92 6485161

(218) 21 4542030

[email protected]

LIBYAN STARS

P.O. Box 84510 Al-Zaway Street, Tripoli

3. Tel.

Fax.

Email:

Website

(218) 31 2660012, 91 2125266, 92 6125266

(218) 31 2660999


www.libyanstars.com






http://www.libyanstars.com/


ATTAKADUM IMORT, EXPORT & SERVICES

Misurata, Libya

4. Tel.

Fax.

Email:

Website:

(218) 51 2627387, 91 3839521, 92 5280351

(218) 51 2625575

[email protected]

www.attakadum.com

ASHAT CONSTRUCTION & ELECTRICAL MATERIALS

IMPORTATION

Misurata, Libya 5.

Tel.

Fax.

Email:

(218) 51 619867, 21 3606437, 91 2132625

(218) 21 51 617630

[email protected]

NASSER CENTER

Fllah Road, Tripoli

6. Tel.

Fax.

Email:

(218) 92 5001924

(218)

[email protected]

DIAR AL SUNDUS FOR GENERAL CONTRACTING

Tripoli

7. Tel.

Fax.

Email:

(218) 21 4834343, 91 2123555, 91 2193555, 91 3773003

(218) 21 4834341

[email protected]

GOMAA ALI SEID

Tripoli, Libya

8. Tel.

Fax.

Email:

(218) 91 2122001

(218) 21 3602119



http://www.attakadum.com/







AL MOTAHEDA PAINT

Tripoli, Libya

9. Tel.

Fax.

Email:

(218) 51 616939, 91 2114456

(218) 21 610415

[email protected]

AL HWIJ FOR CONSTRUCTION MATERIALS

El Thalata Market, St., No: 13, Tripoli

10. Tel.

Fax.

Email:

(218) 21 3605709, 912127261, 91 3203295

(218) 21 4842030

[email protected]

TASHARUKIET AL ALGAWAFFAL FOR IMPORT EXPORT

Alrashed, Canady Street, Tripoli

11. Tel.

Fax.

Email:

(218) 91 3275031, 92 5152012

(218) 21 4443507

[email protected]

ELMGHRA CO., LTD.

38 Omar Mokhtar St., Tripoli

12. Tel.

Fax.

Email:

(218) 21 4448523, 91 2200189

(218) 21 3611514

[email protected]

MAMOURA FOR ALUMINUM MANUFACTURING & TRADING

Al Thalata Market, Al Wady road, Tripoli

13. Tel.

Fax.

Email:

(218) 21 3612221

(218) 21 3615279

[email protected]







LIGHT MOON COMPANY

Tripoli, Libya

14. Tel.

Fax.

Email:

(218) 21 4775142, 91 2122084

(218) 21 4775142

[email protected]

AL AMIN COMPANY FOR GENERAL SUPPLY

Tripoli, Libya 15.

Tel.

Email:

(218) 92 617285, 92 4061653

[email protected]

4. List of contractor (for joint venture) in any construction works (with Thai

construction company)

AFRIQUIA LANDMARK FOR GENERAL CONTRACTING

Omar El Mokhtar St., Tripoli

1. Tel.

Fax.

Email:

(218) 91 2156467

(218) 21 4448104

[email protected]

Al TAKADOM OFFICE FOR ENGINEERING CONULTATIONS

Al Thahra in front of Al Jeehad St., P.O Box 2800 Tripoli

2. Tel.

Fax.

Email:

(218) 21 4447047

(218) 21 4447047

[email protected]

ENGINEERING TECHNOLOGIES COMPANY

Tripoli – Libya

3. Tel.

Fax.

Email:

(218) 91 21 4900661, 61, 722

(218) 21 4900727

[email protected]







FURSA CO.

Tripoli, Libya

4. Tel.

Fax.

Email:

(218) 91 2128620

(218) 21 3351078, 3351079

[email protected]

ALYEM HOLDING COMPANANY

Tripoli, Libya

5. Tel.

Fax.

Email:

(218) 21 489 1784, 91 3771184, 92 8606273

(218) 21 4896770

[email protected]

AL BUSTAN GROUP

Tripoli, Libya

6. Tel.

Fax.

Email:

Website:

(218) 91 3224643

(218) 21 4904440


www.ablustangroup.biz

1st ENGINEERING GROUP

P.O. Box 5821 Hay Andalus Tripoli, Libya

7. Tel.

Fax.

Email:

Website:

(218) 21 4780308, 47, 77

(218) 21 4780308

[email protected]

www.1stengineering.com

ARAB INVESTORS GROUP

El Emad Complex, Tripoli

8. Tel.

Fax.

Email:

Website:

(218) 92 7792126, 913187017

(218) 21

[email protected]

www.arabia-group.org





http://www.ablustangroup.biz/

mailto:[email protected] @yahoo.com

http://www.1stengineering.com/


http://www.arabia-group.org/


ENGINEERING TECHNOLOGIES COMPANY

Abu Salim Al Janoubi, Tripoli

9. Tel.

Fax.

Email:

(218) 4900727, 62, 4900661, 4900727

(218) 21 4900727

[email protected]

ENGINEERING OFFICE

Al Abyar road, Tripoli 10.

Tel.

Fax.

(218) 92 6855319

(218) 21 5821698

ASRICO AL-WATANIA SERVICES AND REAL ESTATE INVESTMENT

COMANY

P.O. Box 4902, Tripoli, Libya

11. Tel.

Fax.

Email:

Website:

(218) 21 4863843, 91 3134891, 92 5529356

(218) 21 4864683


www.asrico.com.ly

OMEGA COMPANY

99 El Gamhoria St., P. O. Box 810 Tripoli

12. Tel.

Fax.

Email:

(218) 21 4447829, 92 6134519

(218) 21 4447829

[email protected]

MOTALET CONSTRUCTION CO.

Jamal Abdulnaser St., P. O. Box 2950, Tripoli

13. Tel.

Fax.

Email:

Website:

(218) 21 4445840, 91 2136387

(218) 21 3341833

[email protected]

www.motalet.com

http://[email protected]/



http://www.asrico.com.ly/



http://www.motalet.com/


EMAAR LIBYA CONULTING & ENGINEERING

Islamic Call Building, Benghazi, Libya

14. Tel.

Fax.

Email:

Website:

(218) 91 3826434

(218)

[email protected]

www.emaarlibya.com

TILAL DARNA COMPANY FOR UNDERTAKING

Darna, Libya

15. Tel.

Fax.

Email:

(218) 81 623691, 91 3265374

(218) 81 622120

[email protected]

5. Any information for social background, custom practice & local important

tradition.

Libya is suffering from a shortage of decent building stock, largely as a result of the

government restrictions that permeated all industries following the revolution in 1969.

Under its model, commercial construction agencies were either abolished or merged into

larger public-sector entities, while all private property rights were eliminated, being

deemed as exploitative.

As a result, modern construction methods and competitive tenders were of secondary

importance to the provision of residential and office space. Constructed under

government tender, the quality of design and construction was relatively low and

construction materials were of secondary quality.

Most international companies were deterred by low tenders and slim profit margins,

resulting in a surfeit of low-quality building stock that is now in need of extensive

upgrading and renovation.


http://www.emaarlibya.com/



The government has changed its approach to investing in housing and infrastructure,

resulting in renewed outside interest. With the government's Housing and Infrastructure

Board, responsible for the housing development programme, tenders has been awarded

for entirely new township developments in the less urban areas, as well as for a larger

number of additions in towns and cities.

PART 2: REGISTRATION FOR ESTABLISHING LEGAL SYSTEM

1. Procedure for establishing company and company account report yearly

submit to government.

- Expenditure related to (establishing, account report and other completing

the project, expenses for clearing account)

Setting up a joint stock company:

Joint stock companies formed as per the foregoing shall be entitled to the following

incentives:

•The right to use land, construction of industries, and necessary workshops required.

•Fetch expatriate manpower to serve projects, where Libyan elements can not fill.

•Obtain financial facilities and credit from local banks.

Joint Stock Structure

Capital: LYD 1,000,000

Expatriate: 65% maximum

National: 35% minimum

JSC: 30% of the capital should be paid on set up


Procedures and Documents Required For The Approval Of Investment Projects

1. Procedures of the approval of investment project establishment

The application regarding the establishment of the investment project to be

submitted to the LFIB in a form designed for this purpose and can be obtained,

directly, from the LFIB administration, or through its website on internet .

The application-should be attached with :

A) a memorandum to specify :

Amount of the capital intended to be invested.

Local and imported raw materials to be utilized by the project.

Technical specifications of the project.

A time table determining the duration of the execution of the project.

Estimations of local and foreign manpower expected to be employed by

the project.

B) Investor’s certificate of nationality issued by competent authority of his

country for natural persons.

C) Recently -dated official abstract of the commercial register in the country of

origin for juridical persons provided that the documents stated in

paragraphs (B-C) are original with an enclosed Arabic translation.

The General People’s Committee for LFIB undertakes to consider the

applications, to prepare the related technical, administrative reports and

the required recommendations including its opinion regarding the project,

shedding light upon its profitability to the national economy and to submit

its recommendations to the Secretary of the General People’s Committee

for Economy and Trade, to take the required decision. Once the decision

of approval of such project is issued by the Secretary of the General

People’s Committee for Economy and Trade the LFIB shall notify the

investor concerned of such decision requesting his submission of the


required documents for project registration and the issue of the related

license of such project.

2. Registry in the Investment register :

Article 23 of the Law stipulates that” The project is not subjected to procedures

related to commercial, import and export registration”

The project will take one of the following legal forms:

i) Joint Stock Company.

ii) Limited Liability Company.

iii) Branch of a foreign company .

iv) Individual project .

The registration of the project in the investment register to be done with the

Libyan Foreign Investment Board and the related application to be submitted on

the form prepared by LFIB for this purpose.

3. Documents required for the registration in the investment register:

A) The memorandum and articles of association for the project that

should take the form of a joint-stock company or of a limited

liability Company.

B) Act of incorporation + articles of association of the main

company in the event that the project takes the form of a branch of

a foreign company in addition to decision of the board of directors

concerning the incorporation of such branch and that related to the

designation of the manager of such branch and its legal

representative in the Great Jamahirya.

C) Document of empowerment with authorities or of a delegation of

authority regarding the administration of such project issued in

favor of such project’s manager or in favor of his legal


representative that must include the statement of such authorities

and the duration of validity of such empowerment.

D) Specimen of project’s manager signature or that of his legal

representative in the Great Jamahirya.

E) Certificate issued by a bank stating the deposit of the equivalent

of 10 % in cash from the capital to be invested, in the name of such

project.

The registration in the investment register will have the same legal effects of the

registration in the commercial register including the establishment of the juridical person

character.

After completion of the implementation of the project and once ready to be operated,

the LFIB will issue the operating license for the project to commence its activities, fixing

in that way the effective date of the five-years tax exemption, as provided for in article

10 of the Law.

Source: Board of Privatisation & Investment

Contact Person: Dr. Gamal Al Lamushe – Board Chairman

Tel: (218) 21 3345015

Fax: (218) 21 3345024

Email: [email protected]

2. Can we establish company for project by project?

Yes, but in specific cases and under certain conditions to be stated out by the Housing

and Infrastructure Board (HIB) in coordination with the local partner through the

tendering system applicable in Libya.



3. Does it need to have local partner or not?

Expatriate entities intending to do contracting business in Libya must form a Libyan joint

stock company with a local entity: pursuant to the General People’s Committee (Cabinet)

Resolution Nos. 171 of 31 July, and 443 of 14 November 2006.

Exempting from JSC situation

In case particular or unique specialties, an exemption may be allowed: by a specific

approval of the General People’s Committee (Cabinet).

In such an instance, the expatriate entity can establish a branch in Libya: to carry on its

own business.

Joint Stock

The law fixes the capital of a JSC formed by a Libyan company and a foreign company,

or by Libyan nationals and foreigners, or by companies and individuals at LD1m

($811,662). The paid capital is LD300,000 ($243,500). Minimum Libyan participation in

the company’s capital is 35%. The company’s capital is formed, as any other JSC,

through the shareholders’ subscription to negotiable shares. The share value will be less

than LD10 (8.12) and not more than LD100 ($81.17). Shareholders are liable for

company liabilities only up to the amount of their contribution. The shareholder’s

liability toward the company’s creditors is limited by paying up the share(s) value which

he subscribed to.

Foreign investors prefer to invest their capital in a JSC because it limits their

responsibility, according to the number of shares held by each shareholder. Also, they can

transfer their shares without the consent of the other shareholders.

The advantages of a JSC include the limitation of all partners’ responsibility, which

distinguishes the JSC from a partnership company limited by shares, where the latter has

tow categories of partners: financed partners and sleeping partners. The former may be in

charge of management and personally and jointly held for payment of the company’s

debts, and the latter are under the same legal statutes as the shareholders in the JSC.

The shareholder’s contributions are in the form of negotiable shares, despite the limited

liability company. The double taxation has been settled in this type of company,


according to the general manager of tax administration instructions dated March 11,

2007.

Pursuant to theses instructions, a JSC’s profits shall be subject to the corporate tax only

and the shareholder’s profits gained from his participation in the JSC shall not be subject

to the income tax. Their rights include the right to usufruct the lands and to establish

factories and workshops, the right to recruit expatriates employees need for the project

according to the specified regulations, and getting credits and financial facilitations from

the banks.

4. In case of the project owner is foreigner, the regulations are applied the same as

locals?

In terms of regulations and laws, they’re the same for procedures and work mechanism as

well as taxes. Only paid up capital required for registration will be less 25% for local

entrepreneur.

5. Tax related to the project including corporation tax, and the refund from tax (in

case it is exempted by investment law?

Corporation Income Tax (CIT):

Annual Basis

First LYD 200,000 15%

Next LYD 300,000 20%

Next LYD 500,000 25%

Next LYD 500,000 30%

Next LYD 500,000 35%

In Case of LYD 2,000,000 40%

Jehad (Defence) Tax On Taxable Income: 4%

Stamp Duty is imposed on transaction and documents, such as, but not limited to:


- 2% of Supply & Services Contract Amount

- 0.5% Stamp duty is applied to any state transaction on payment and/or receipt

Source: Ministry of Industry, Economy & Trade

Contact Person: Mr. Dia T. Hammuda

Tel: (218) 21 4831394

Fax: (218) 21 4831394


6. Tax exemption rights applied to foreigner and locals are the same or different?

How is it different?

Tax Holiday:

- Project shall be exempted from income tax on its activities for a period of five years

from the start of production or execution depending on the nature of the project. This

period could be extended for an additional period of three years.

- Profits from the project will enjoy tax exemption if they are reinvested.

Project established within the framework of the Foreign Capital Investment

Encouragement Law shall have the following benefits:

- Equipment, machinery and other means deemed necessary for the execution of the

project are exempted from Customs duties.

- Good directed for export are exempted from the production taxes and from the

fees and taxes imposed on goods when they are exported.

- The project will be exempted from Stamp duty imposed on.



7. How is the process for closing company, how long does it take for clearing

account and bring back money & assets to Thailand?

Liquidation of investment project:

The People’s committee for the Board of Investment may submit a recommendation to

the Secretary of the General People’s committee for Economy and Trade for liquidation

of the investment project in any of the following cases:

1. Submission of application by the investor concerned, to be enclosed with approval

of the extraordinary general assembly for liquidation of the investment project

with respect to companies.

2. Loss of more than half capital of the project.

3. Expiry of the project period and non-submission of the investor for application for

extending the approval or disapproval thereof.

4. Impossible continuity of the project for performing its activity.

5. Issue of decision for cancelling the license.

In case of approval of the competent Secretary for recommendation of the People’s

Committee for the Board of Investment, he shall issue a decision for liquidation. The

investor shall appoint the liquidators of the project to prepare the Liquidation balance

sheet. If the investor doe not appoint the liquidators within a period of three months from

the date of issuing the decision for liquidators, the Secretary of People’s committee for

the Board of Investment shall appoint the liquidators by decision thereof, and the investor

shall bear the fees of the liquidators and cost of liquidation procedures.

Return of the Un-invested Capital

The investor shall be allowed to re-transfer his un-invested foreign capital to abroad on

the same manner as imported. The national investor shall be also allowed to return his

capital under the following conditions:

1. Elapse of (6) six months from the date of transfer of the capital to be invested to the

Great Jamahiriya, and not obtaining the necessary licenses and approvals for the project

or start of construction thereof.


2. Inability of the investor to invest the capital, either due to being unable to obtain the

necessary license for investment or for difficulties or circumstances beyond his control

The application shall be submitted to the Board of Investment on the relevant Form

attached with certificate from the Bank, in which the amount is deposited, indicating net

amount deposited, and the reasons and conditions preventing investment and the

supporting documents, if any. After approval of the application, the Board of Investment

will address the Bank to retransfer the amount indicated in the application, under the

procedures adopted in this respect.

Re-Transfer of Invested Capital

The investor may re-transfer his capital in the Great Jamahiriya abroad, upon an

application submitted thereby to Secretary of People’s Committee for the Board of

Investment, in any of the following cases:

- Expiry of the project period

- Liquidation of the project.

- Sale of the project wholly or partly.

- Elapse of a period not less than (5) five years from the date of issue of the license for

investment. The application shall be submitted on the Form prepared by the Board,

together with the indicative documents.

Within a maximum period of two months from the date of acceptance of the Board of

investment of the application. The Secretary of People’s Committee for the Board of

Investment shall, in Case of approval, address the Bank where the investors account is

kept for finalising the procedures for transfer of the required amount to abroad.

8. Value added tax: detail, how to calculate, the way for collecting.

No value added taxes in Libya

9. Tax deducted from the payable side:

Have No x


How to calculate? Can the contract be separated into labor cost contract and

material cost contract?

No.

10. Double Taxation: Do we have any agreement with Libya or Algeria?

There are double tax treaties between Libya and a number of countries such as:

- Arab Maghreb Union

- Egypt

- France

- India

- Malta

- Pakistan

Source: Ministry of Industry, Economy & Trade

Contact Person: Mr. Dia T. Hammuda

Tel: (218) 21 4831394

Fax: (218) 21 4831394


PART 3: FINANCING, BANKING, ACCOUNTING

1. Is there a bank in local country (Libya, Algeria) has policy to support

construction projects.

Is there a Thai Bank open a branch in this country? No

Libya’s banking system is dominated by five banks which are owned in full or in the

majority by the Libyan Central Bank (Jamahiriya Bank, Wahda Bank, Sahara Bank,

Umma Bank and the National Commercial Bank).

These five banks constitute almost ninety percent of Libya’s banking sector assets. All of

these banks have capital of at least 100 million Libyan Dinars, and two of them (Wahda

Bank and Sahara Bank), are in the process of being privatized. France's BNP Paribas

acquired 19% of Libya's Sahara Bank in July 2007, and took operational control of the



bank. The deal also includes an option allowing BNP Paribas to purchase additional

shares up to 51% of Sahara's capital over the next three to five years. In November 2007,

Five foreign banks were shortlisted for the privatization of Wahda Bank, including

French, Italian, Jordanian, Bahraini and Moroccan institutions. They are bidding on a

19% of the share of Wahda Bank, with the option to increase their ownership to 51% in

three to five years.

The Central Bank announced in October 2007 that it would merge Umma Bank and

Jamahiriya bank into a single entity; that process is still ongoing. The Central Bank also

owns the Libyan Foreign Bank, which operates as an offshore bank, with responsibility

for satisfying Libya's international banking needs (apart from foreign investment). In

addition, there are four specialized banks owned by the General People’s Committee for

Finance: the Agricultural Bank, Real Estate Investment Bank, Development Bank and

Reefi Bank. There are also four substantial private banks (Bank of Commerce and

Development, Amen Bank, Al-Jimaa al-Arabi Bank and Wafa Bank) and forty-eight

smaller regional banks.

The availability of financing on the local market is weak. Libyan banks can only offer

limited financial products, loans are often made on the basis of personal connections

(rather than business plans), and public bank managers lack clear incentives to expand

5/5/2008 their portfolios. Lack of financing acts as a brake on Libya's development,

hampering both the completion of existing projects and the start of new ones. This has

been particularly damaging in the housing sector, where particularly small-scale projects

often languish for lack of steady funding streams.

The Libyan banking system is currently undergoing a substantial modernization program

to upgrade available services/products, deal with large numbers of non-performing loans,

establish a functioning national payments system, facilitate the use of non-cash payment

instruments and institute new standards of accounting and training. While foreign banks

are technically able to enter the Libyan market under the Banking Law of 2005, the

Central Bank has sought to delay their entry until the reform process has taken hold.


Source: Central Bank of Libya

Contact Person: Dr. Mohamed Abusneina

Tel. (218) 21 4831640

Fax: (218) 21 4831642


2. Pros & Cons for using between local currency vs US dollars in the contract.

Normally it is almost compulsory using the local currency in Libya even in contracts and

practices.

3. Bank Fees

3.1 Guarantee letter: Bid bond, performance bond, maintenance bond

Bid bond: 0.5% of the contract value.

Performance bond: 2% of the contract value

Maintenance bond: 2% of the contract value.

3.2 Fee for issuing cheques

No fees for issuing cheques in Libya.

Travelers' cheque are not accepted in any bank, some shops in Tripoli may exchange

them. Regular bank cheque which is issued and payable in Libya must be presented for

payment within 8 days. The deadline is brought up to 60 days if the cheque is issued

outside the Libian territory. The starting point of these deadlines is the day mentioned on

the cheque as an issuing date.

Source: Central Bank of Libya

Contact Person: Dr. Mohamed Abusneina

Tel. (218) 21 4831640

Fax: (218) 21 4831642





3.3 Law & punishment related to wrongdoing in money transaction.

In case of wrongdoing in money transaction in Libya one of the following actions are

being taken:

- If that happed at the beginning of the project: the contract might be cancelled.

- If that happed during the operation period: the project might be halted and

properties might confiscated and in some cases foreign entrepreneurs might be

deported out of the country.

Source: General Board of Privatization & Investment

Contact person: Mr. Mohamed Meftah Noha

Tel: (218) 21 3345010

Fax: (218) 21 3345010


3.4 Is there a problem in using currency or exchange rate

No no problem in using currency or exchange rate.

3.5 Is there restriction in transferring US dollar into – out of the country.

No restrictions in transferring US dollars into or out of the country conditioned that

amount transferred should be in consistency with the contract value. Any exaggerated

amount should subject to government scrutiny and inspection. Justifications should be

disclosed to show from where such amount has been obtained. Also some transferring

destinations are subject to government inspection such as the countries in conflict with

Libya.

3.6 Interest rate for loans (borrowing): it is different from one bank to another in Libya

and conducted under strict supervision from the Central Bank of Libya.

Interest rate for deposit (1 yr.): 10%



PART 4: HIRING, VISA (WORK PERMIT)

1. Hiring rate (US dollars) for locals in the construction field.

Hiring rate for locals holding bachelor degree ranges from US$ 400 – 5000 (no specific

limit for maximum rate) for private sector.

Source: Labour and Vocational Training Authority

Contact Person: Mr. Ali Ahmed Essaleh

Tel: (218) 21 3620106

Fax: (218) 21 3620109


2. Salary for local (in general field – Bachelor degree) USD/month

Hiring rate for locals holding bachelor degree ranges from US$ 400 – 5000 (no specific

limit for maximum rate) for private sector.

Salary for special field: engineer, accountant, lawyer – local people (bachelor

degree/USD/month)

Newly graduated: 500 USD/Month

Experience 5 yr: 1500 USD/Month



3. Hiring rate for consultant (local)

Lawyer (hour basis) USD/HR. (Hourly system is no used)

Accountant/Tax USD/HR. (Hourly system is no used)

Lawyer (monthly basis) 4000 USD/Month

Accountant/Tax 6000 USD/Month

The most applicable system for hiring consultants in Libya is the contract by contract

basis, as the charge is calculated as a percentage of the total value of contract.



4. Bonus/Yearly reward

7-10%

5. Payment in Social welfare / Compensation fund or any related law.

How types of payment, how much in percentage comparing to the wage.

INAS (Social Security): Contributions are payable by all employees working Libya

whether local or foreign, based on gross income. Contributions may be made either

weekly or monthly. Gross income for a foreign national is expected to include housing

and subsistence payments. Contributions must be forwarded to the INAS fund by the 10th

day of the following month. Late payments carry a 5% fine.

Solidarity Fund Contributions: Contributions are payable by deductions from the

employee’s salary at the rate of 1% of gross salary. Libyan employees are subjected to a

further 1.5% contribution tax.

6. Process in acquiring work permit.

A work visa should be obtained after the approval from the concerned authorities in

Libya as the employee or worker should posses a certified and attested work contract

where salary and work conditions should be stated clearly. As soon as the employee

arrive Libya the employer will proceed for getting a residency permit for the employer

immediately within 3 months as maximum from the date of arrival.

Source: Labour and Vocational Training Authority

Contact Person: Mr. Ali Ahmed Essaleh

Tel: (218) 21 3620106

Fax: (218) 21 3620109




7. Tax calculation by counting working day in the country regarded as working day

for paying tax.

Is there taxation regulation like this or any related?

Libyan salaries and wages tax applied to all salaries, wages, bonuses and benefits that

arise from employment in Libya. Tax rates range from 8% to 15%.

The salaries and wages tax is calculated on the base salary plus any allowances. Salaries

and wages declaration are filed monthly and the tax deducted must be paid to the Tax

Department by the following month. The Tax Department will reconcile the monthly

statements to the company’s year-end income statement.

Tax applicable:

First LYD 4,800 8%

Next LYD 4,800 10%

In access of LYD 9,600 15%

A stamp duty of 0.50% is paid on taxable salaries. A further tax of 1.5% is deducted from

the salaries of Libyan nationals. This is called “company contribution”. Palestinian

nationals are subject to a further 7% tax on their income.

Personal Deductions: The following personal allowances are available as deductions to

taxable individuals:

Single Person: LD1200 ($974)

Married Person: LD1800 ($1461)

Married with Children LD2400 ($1948)

Married Woman LD1200 ($974)

Jihad Tax: This tax is payable under Law 44/1970 and is levied on personal incomes at

3% and corporate profits at 4%. This tax applies to monthly taxable incomes for

individuals at the following rates:


Less than LD50($40.60) 1%

Over LD50 and less than LD100 ($81.20) 2%

Over LD100 3%

Withholding Tax: The government withholds a 0.5% stamp duty from all payments. A

further 0.2% is payable on official receipts, including contract registration duties, and

corporate and personal taxes.

8. Labour laws & punishment, how is it, and the related laws.

The regulations governing labour laws are mainly contained in Labour Law No. 58 of

1970 as well as in Articles 673 to 698 of the Libyan Civil Code.

According to the Ministry of Manpower, local employees should not make up less than

50% of the branch office employees. Employment contracts may be concluded for a fixed

term or an indefinite term. The probation period may only be for one month and the

parties to the employment contract may agree on only one probation period. Wages and

salaries are only paid in Libyan Currency.

Working Hours and Holidays: Working hours may not exceed eight hours a day, six

days a week. Employees are entitled to 16 vacation days per year and employees working

for the same employer for more than five consecutive years are entitled to 24 days paid

leave per year.

Sick Leave: The maximum sick leave according to Article 42 of the Libyan Law is 180

days, with the first 60 days at half pay and the next 120 days at 60% pay. The leave shall

be granted upon presentation of a medical certificate from the concerned doctor in the

National Institution of Social Security at the work zone, if it does not exist in the area or

the employee is not insured, the medical certificate should be issued by a government

doctor, the establishment doctor or the doctor who treated the employee.


Pilgrimage Leave: Pursuant to Article 41 of the Libyan Labour the employee is entitled

to paid pilgrimage leave not exceeding 25 days and under the following conditions:

- The employee has served the employer continuously for three years.

- The leave shall not exceed 25 days.

- The employee shall have this leave only once in a lifetime.

- The employee should forward to the employer the documents that prove his

performance of pilgrimage during the leave whenever required to do so.

Maternity Leave: Pursuant to Article 46 of the Libyan labour law an employee is

normally entitled to 50 days of maternity leave half day.

Termination and Compensation: Article 46 of the Libyan labour law differentiated

between the fixed period contract and indefinite period contract as follows: “The contract

of a fixed period expires by the end of its period and without a need for a notice or

warning.” Accordingly, regarding employment contracts for indefinite terms, each party

may terminate the contract by registered mail. The notice is 30 days for employees paid

per month. Employers do not have to comply with the one month notice period in cases

of termination for reasons enumerated in Article 51 of Law No. 58/1970, such as if the

employee commits a gross mistake or if the employee was still under probation. As for

employees, they may terminate the employment contract before its term and without a

prior notice in cases defined by the labour law as in cases in which the employer fails to

fulfil his obligations towards the employee. If the employee is subject to an abusive

termination of his employment contract, he may ask through the geographically relevant

Labour Office, by means of registered mail, to continue his employment relation. Should

the Labour Office fail to reach a final settlement of the case, it is then referred to the

relevant court.

9. Labor – profession, what types of them that are needed to import from Thailand.

Thai technicians and high calibre architects could be in demand in Libya.


PART 5: OTHERS

1. Price of renting office in business area and that outside within 10 Km from

center/downtown (In USD / 100 sqm)

Renting office in business area (USD/100 sqm): 2400

Renting office outside the center (USD/100 sqm): 1500

Source: Alyem

Contact person: Eng. Sulaiman Engia

Tel: (218) 21 4891784

Fax: (218) 21 4896770


2. Price of renting house (2 bed room, 2 toilet) within 10 Km from downtown.

US$ 800-1200

Source: Alyem

Contact person: Eng. Sulaiman Engia

Tel: (218) 21 4891784

Fax: (218) 21 4896770


3. Process in importing machines (and exporting)

Project established within the framework of the Foreign Capital Investment

Encouragement Law shall have the following benefits:

- Equipment, machinery and other means deemed necessary for the execution of the

project are exempted from Customs duties.

- Good directed for export are exempted from the production taxes and from the

fees and taxes imposed on goods when they are exported.

- The project will be exempted from Stamp duty imposed on.




Source: General Board of Privatization & Investment

Contact person: Mr. Mohamed Meftah Noha

Tel: (218) 21 3345010

Fax: (218) 21 3345010


4. Others:

Construction is a high-priority sector for the Libyan government, as it is now flush with

oil revenues and keen to address the latent demand for modern building stock. Since

Libya entered the investment sphere, real estate and construction has stimulated

significant investor interest, becoming one of the country's most buoyant sectors in its

early attempts at diversification away from hydrocarbons.

Owing to the fact that construction market has been largely inactive since the late 1970s,

there is a now ample opportunity for early investors to reap substantial benefits, as well

as high government liquidity, the market has several key demand drivers.

GOVERNMENT SUPPORT

Libya's fairly recent and confident entrance into the global marketplace has presented a

country that is eager to catch up with its neighbors. Also, with its favorable current

account balance, a government that is able and willing to inject petrodollars into

encouraging the development of a healthy construction sector show signs of promise. The

government's pledge in 2006 to invest $40bn in housing and infrastructure was not

surprising, considering that the country has experienced successive real GDP growth of

over 5.0% since 2004, and 6.8% in 2007 alone.

However, a number of factors have slowed down the process of international companies

tapping into this latent demand , with the level of infrastructure and ignorance of how

best to navigate government bureaucracy warding off many potential investors at first. In



order to counteract this, new measures has been taken by the government to expedite the

registration of foreign companies. For example, the inauguration of several new agencies

and boards designed to monitor and offer support to the various investment projects have

ensured that easier and faster mechanisms are now in place.

The result has been obvious, with several projects rapidly progressing beyond planning

stages. International construction giants from countries such as Turkey, Malaysia, France,

Lebanon, and some Gulf States, are undertaking significant projects, often in joint

ventures with government departments.