Libya is located in the middle of North Africa bordering the Mediterranean Sea and is situated 356 kilometres south of Malta. Libya has a population of just over 5 million. Apart from its natural beauty, beautiful stretches of beaches and archaeological remains, Libya enjoys large quantities of valuable natural resources particularly oil, gas, iron, steel, marble, clay and other raw materials as well as an abundance of agricultural produce and fish stocks.
Libya has a considerable expatriate workforce of over 400,000. The percentage of gainfully employed locals is low standing at around 40%. However, this is changing rapidly with universities and technical institutes churning out over 20,000 graduates annually.
There are a number of areas, such as infrastructure, tourism, waste management, health and education where a number of large scale projects need to be undertaken in order for the country to spear itself ahead. To this end, Law No. 5 of 1997 relating to Foreign Investment concentrates on a number of key areas including the production of goods or provision of services to substitute imports; the provision of advanced technical training; knowledge transfer and the utilisation of local raw materials.
The incentives provided by Law No. 5 include the following:
- imported machinery, tools, equipment, spare parts and raw materials are exempt from all duties and taxes for a 5 year period;
- the project is exempt from all income tax on its activities for a period of 5 years, which period can be extended by a further 3 years;
- exported goods are tax exempt;
- no duty is imposed on commercial documents relating to the project;
- net profits and dividends are freely transferable;
- expatriate personnel can be freely employed should no local substitutes be available;
- possibility of long term leases for land to be utilised for production facilities;
- ownership of the project may be freely transferred;
- investors can freely re-export the capital invested.
Furthermore, Law No. 5 safeguards the investor against nationalisation, dispossession, seizure, expropriation or other action having a similar effect. A Libyan Foreign Investment Board has been set up to promote investment projects.
Malta has proven to be an ideal location as a base for business in Libya. In this regard, one should note that there are excellent relations between the two countries and Malta is a mere half an hour flight away from Libya, with flights being available on a daily basis.
In addition, the culture of doing business in Libya differs to a large extent from that which businessmen from northern Europe and other continents are accustomed to. Maltese businessmen are very familiar with the Mediterranean culture of doing business and feel at ease in doing business with Libyan counterparts. In fact, Maltese businessmen can make ideal partners for businessmen from outside the Mediterranean to team up with in conducting business in Libya.
Foreign businessmen can conduct their business in Libya through a Malta company and benefit from the fiscal incentives Malta has to offer. The international trading company and holding company have proven to be particularly appropriate in this regard. Malta is in a position to provide all the necessary professional and administrative services. Malta has a state-of-the-art telecommunications system; the use of computers, internet and cellular phone technology is widespread and there are flights to Europe’s major cities on a daily basis. The Malta Freeport also offers the possibility of storage of supplies and equipment.
Both in the past and at present, a multitude of expatriate executives working in Libya found it convenient to establish their family’s residence in Malta, renting an apartment or house in Malta and sending their children to school over here. Malta boasts a health system which has been classified by the World Health Organisation as one of the best in the world and an excellent education system with one of the oldest universities around.