November 3, 2010 / 2:38 PM / in 8 years

Libya imposes new rules on foreign investors: report

RABAT (Reuters) - Foreign investors will only be allowed to do business in oil exporter Libya if they form a joint venture with a local partner, local media quoted the Libyan Prime Minister as saying on Wednesday.

Libyan President Muammar Gaddafi arrives for the inauguration of President Jacob Zuma in Pretoria, May 9, 2009. REUTERS/Themba Hadebe/Pool

Foreign firms rushed into Libya after international sanctions were lifted six years ago, seeking a share of lucrative markets and contracts, but the government has said it wants to develop local business and create jobs for Libyans.

Two Libyan publications quoted Prime Minister Al-Baghdadi Ali al-Mahmoudi as announcing the new rules at a meeting with businesspeople in Tripoli. No officials were immediately available to confirm the report.

“A foreign company will enter into business in Libya only via association with Libyan partners,” the prime minister was quoted as saying by Libya Press news agency and the Quryna newspaper.

The prime minister did not mention if the new measure would apply to the oil sector, the mainstay of the economy where investors include ENI and BP. Most foreign oil firms in Libya are already in partnership with local firms.

Al-Mahmoudi also said red tape would be cut and access to credit would be eased for local businesses, addressing concerns often cited by Libyan businesspeople.

“Access to credit and sources of finance will be opened for up to 50 percent of the value of the project for Libyans launching ventures in manufacturing, education, healthcare, tourism and other productive activities,” he was quoted as saying.

The publications quoted Mahmoudi as saying the government will ease visa and residence rules for foreigners involved in joint ventures with Libyans to help local businesspeople gain access to foreign expertise.

In the past few years Libya has undergone a dramatic shift towards a market approach after four decades of Soviet-style central command economy.

The country has a plan to invest up to $150 billion between 2007 and 2020 to upgrade its infrastructure and diversify its economy, and foreign firms have been keen to win infrastructre and engineering contracts.

Both the publications which reported the prime minister’s comments are part of the Al Ghad media group founded by Saif al-Islam Gaddafi, a son of Libyan leader Muammar Gaddafi.

The reform-minded Saif al-Islam has an open rivalry with the Libyan prime minister, who analysts say belongs to a more conservative camp.

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