Legal Market Overview
Due to extreme political instability, the business environment in Libya remains challenging. The country has experienced a power vacuum since the ouster of Colonel Gaddafi in 2011. The UN-backed government installed in Tripoli in 2016 has little authority across the country and is confronted by two opposition governments and a host of militias, which still control sizeable portions of the eastern and coastal regions. The lack of a reliable institutional counterpart, an unclear legal framework and security concerns make foreign companies wary of investing in the country.
Libyan assets, however, are rich, especially in the oil sector, which makes up over 95% of export revenues and 60% of the GDP. Yet, the economy, which rebounded in 2012 after Gaddafi’s demise but crashed again following the Second Libyan Civil War, strives to recover. Besides political unrest, other challenges to foreign investment include the country’s dependency on the oil industry, an inefficient administration that hinders the development of the private sector, lack of loans, state control of prices and exchanges, import restrictions, high unemployment, record levels of inflation and widespread corruption.
Nonetheless, the country’s huge natural resources continue to appeal to foreign companies, with security, healthcare and telecoms other fairly active sectors in an economy in need of diversification. Libya’s recent rehabilitation within the international community may give confidence to investors, which expect the internationally-recognised government to pursue liberalisation policies and favour private investment. In such a framework, several local legal firms are doing business from their offices in Tripoli, while a number of international firms work operate Libyan desks from abroad. Corporate, project development, regulatory and litigation are the main areas of activity.
A number of international firms operate in Libya from their offices outside the country. King & Spalding LLP‘s Mehdi Haroun is based in Paris and handles various commercial and corporate matters, particularly in the field of oil and gas, telecoms and infrastructure. The practice assisted Total with its acquisition of Marathon Oil Libya. General Maritime National Transport Company is another notable client. At Freshfields Bruckhaus Deringer, Dubai-based Pervez Akhtar is the regional managing partner for the Middle East and North Africa, and specialises in M&A and corporate transactions, advising regional and international financial investors, sovereign wealth funds and government investment vehicles.